Bloomberg Analyst: Gold-Silver Price Ratio Hits High, Signaling Risk Assets May Face Double Whammy

BlockBeats News, May 21st, Bloomberg's Senior Commodity Strategist Mike McGlone said that the gold-silver ratio typically peaks when the Federal Reserve ends its loose policy. On May 20th, the 100-to-1 gold-silver ratio was approaching its historical high quarterly closing price (reaching 113-to-1 in the first quarter of 2020). Unlike previous peak periods, the current situation lacks the key element of Fed accommodation, which may signal a double whammy for risk assets.

McGlone explained that the current gold-silver ratio (around 100-to-1) has limited predictive power for economic trends. If the May 20th 100-to-1 gold-silver ratio remains above 91.5-to-1 at the close of 2025, it will mark the highest year-end ratio in history, typically signaling an unfavorable global economic outlook. Peak values of this ratio were seen during the U.S. economic recessions of 1990-91 and 2020, but this time lacks a key precondition—the Fed's loose policy has not yet bottomed out.