Silver Hits 27-Year Low in Gold Ratio, Sparking Undervaluation Debate

On Monday, September 8, 2025, silver traded at $40.93 per troy ounce, marking an increase of $0.35, or 0.85%, compared to the previous trading day. This price reflects the latest movement in the global precious metals market, with the COMEX—the primary exchange for determining silver's spot price—playing a central role in setting the benchmark. The bid price for silver stood at $40.93, while the ask price was recorded at $41.05, with the price range for the day spanning from $40.46 to $41.47. The uptick in silver prices aligns with broader trends in the precious metals sector, particularly in light of gold’s recent record highs. Gold traded at $3,585.30 per troy ounce, reflecting a $40.70 increase, or 1.15%, underscoring a significant shift in investor sentiment toward safe-haven assets.

The gold-to-silver ratio, a key technical indicator in the precious metals market, reached a level of 85, the highest in 27 years. This ratio is calculated by dividing the price of gold by the price of silver and serves as a barometer of relative value between the two metals. A ratio above 80 typically signals that silver is undervalued compared to gold and may be poised for a corrective rally. The current ratio is nearly 60% above the 20-year average of 60:1, suggesting that silver is trading at a substantial discount relative to its historical relationship with gold. Market analysts and investors have historically used this ratio as a guide for identifying potential buying opportunities in the silver market.

The recent divergence in investor behavior between gold and silver has raised questions about the underlying drivers of this trend. While gold has seen robust demand amid a backdrop of weak U.S. economic data and expectations of interest rate cuts, silver has experienced slower price appreciation despite strong industrial demand, particularly in the renewable energy sector. Silver’s extensive use in photovoltaic cells has supported its demand in recent years, with the metal reaching a 13-year high in June 2025. However, the recent performance of silver has lagged behind that of gold, prompting speculation that macroeconomic and geopolitical factors are influencing the allocation of capital within the precious metals sector.

Physical demand for silver has also shown signs of strength. The U.S. Mint reported a record sale of 1.53 million American Silver Eagles in August 2025, the highest monthly volume since 2015. This surge in demand highlights the enduring appeal of silver as both an investment and a store of value. In contrast, silver ETFs and paper-based instruments have seen mixed performance, with prices diverging from the physical market due to factors such as liquidity and dealer markups. Investors seeking to capitalize on the potential for a silver price correction may find opportunities in physical bullion, particularly in the form of cost-efficient bullion bars and coins.

As the precious metals market continues to evolve, the interplay between economic fundamentals, geopolitical developments, and investor sentiment will likely remain a key determinant of silver’s price trajectory. While the current environment suggests silver may be undervalued, market participants should remain cautious, as the precious metals sector is inherently volatile and subject to rapid shifts in demand and supply dynamics. Investors are advised to monitor developments in the gold-to-silver ratio and broader macroeconomic indicators to better position their portfolios in response to changing market conditions.

Source: [1] Silver Price Today - Live Silver Spot Price Charts (https://www.jmbullion.com/charts/silver-prices/) [2] An insider is warning that a silver price shock is incoming ... (https://www.kitco.com/news/article/2025-09-04/insider-warning-silver-price-shock-incoming-insatiable-physical-demand) [3] Gold Silver Ratio Chart (https://goldprice.org/gold-silver-ratio.html) [4] Precious Metals - Gold Spot Prices (https://www.kitco.com/price/precious-metals) [5] Alert: Gold-to-silver ratio spikes to highest level in 27 years! (https://www.mining.com/web/alert-gold-silver-ratio-spikes-highest-level-27-years/) [6] Silver Spot Price & Charts in Euros (https://www.jmbullion.com/charts/silver-prices-eur/)