On July 29, 2026, an important signal emerged in the international precious metals market - the gold/silver ratio (the ratio of gold to silver prices) officially broke below the 80 mark, hitting a low of 78.5, the lowest since August 2023. This key technical breakthrough indicates that silver has been consistently outperforming gold over the past few months, and the "rotation effect" in the precious metals market is accelerating.
Market Review: Why is the Gold/Silver Ratio Continuously Declining?
As of 5:00 p.m. Taipei time on the 29th, spot gold was quoted at $2,218.3 per ounce, down 0.4% from the previous trading day; spot silver rose 0.8% against the trend to $28.25 per ounce, once touching $28.42 during the session, just a step away from historical highs. The gold/silver ratio dropped sharply from 81.2 to 78.5, showing a significant strengthening of silver's relative strength.
Analysts point out that the recent decline in the gold/silver ratio is mainly driven by the following factors:
- Industrial demand recovery: The global manufacturing PMI has rebounded for three consecutive months, and the industrial consumption of silver in the solar photovoltaic, new energy vehicle, and electronics industries has increased significantly. According to the latest report from the Silver Institute, global industrial demand for silver is expected to grow by 8% in 2026, reaching a record 650 million ounces.
- Safe-haven capital rotation: Against the backdrop of gold prices already at historical highs, some safe-haven funds are shifting to relatively undervalued silver, seeking higher elasticity. Silver's upside potential is considered greater, attracting speculative long positions.
- Fed rate cut expectations: The market is betting that the Federal Reserve will start cutting rates in September. Expectations of a decline in real interest rates support overall precious metal prices, and silver, being more sensitive to interest rate changes, leads in gains.
Historical Range of Gold/Silver Ratio and Investment Significance
The gold/silver ratio is an important tool for measuring the relative value of gold and silver. Historical data shows that the gold/silver ratio typically fluctuates between 60 and 90, with extreme cases above 100 (such as the early stage of the 2020 pandemic) or below 40 (such as the peak of the silver bull market in 2011). The current level of 78.5, while still above the long-term average (about 65), has moved away from the high range of the past two years (80-95).
Investment institutions generally believe that a decline in the gold/silver ratio from a high level is often a confirmation signal of a silver catch-up rally. When the ratio is above 80, silver is relatively undervalued compared to gold, suitable for a long silver/short gold arbitrage strategy; after the ratio breaks below 80, it may enter an accelerated upward phase in the short term, but at the same time, the risk of overbought pullbacks needs to be watched.
Vietnam Market: Domestic Gold Prices Follow the Fluctuation, SJC Premium Narrows
In the Vietnamese domestic market, SJC gold bars are quoted at 72.5 million Vietnamese dong per tael, equivalent to about $2,180/ounce based on international gold prices, with the premium narrowing from 8% last month to around 5%. Industry insiders say that with the State Bank of Vietnam relaxing gold import quotas, the domestic supply tightness has eased, and it is expected that SJC gold prices will maintain a closer linkage with international gold prices in the short term.
For silver, the Vietnamese silver price is quoted at 1.05 million Vietnamese dong per tael, with a year-to-date gain of 32%, attracting much retail investor attention. A manager of a precious metals trading firm in Hanoi said: "Recently, the number of clients consulting about silver investments has increased by 30%, and many people hope to diversify their gold holdings by buying silver bars or coins."
Future Outlook and Trading Strategies
Regarding the outlook, market views are divided. The bulls believe that silver's industrial attributes will continue to benefit from the green energy transition, and the gold/silver ratio still has room to decline, with a target of 70. The bears warn that silver is far more volatile than gold, and if Fed rate cut expectations disappoint or recession fears intensify, silver could face a larger correction.
In terms of specific strategies, short-term traders can watch for a rebound in the gold/silver ratio to around 80 to short silver, or use options to build spread strategies. Medium- to long-term investors can gradually establish long silver positions on dips, while pairing with gold as a safe-haven base position to achieve risk balance.
Overall, the key break of the gold/silver ratio heralds a new round of structural changes in the precious metals market. Investors should closely monitor this week's Fed interest rate decision and US GDP data, which will provide further directional guidance for gold and silver prices.
