Gold/Silver ratio drops to lowest since November 2017

• Gold/Silver ratio slides as silver outshines gold by a big margin. 
• Silver is still down 45% from record highs and looks relatively undervalued.

The gold/silver ratio, which measures the amount of silver it takes to buy the yellow metal, declined to a 33-month low of 75.27 early Thursday.

The ratio topped out at 126.56 in March and has declined by 40% ever since. This is because silver has rallied by 131% from $11.64 to $27 during the same time period, outperforming gold’s gain of 40.6%. 

Silver being a semi-precious/semi-industrial metal looks to be drawing bid on haven appeal and optimism stemming from signs of revival in China, the world’s second-largest economy. 

Both metals could continue to rally as central banks and governments are likely to continue pumping unprecedented amounts of liquidity into the global economy to counter the coronavirus-induced slowdown. 

Silver, however, looks undervalued compared to gold and could continue to outshine gold, pushing the gold/silver ratio lower. Silver is still down 45% from the record high of $49.83 reached in April 2011. 

Technical levels