Over the past year, Gary Tanashian, founder of Notes From the Rabbit Hole (NFTRH), has described the Gold-Silver Ratio (GSR) as an important indicator for understanding broader economic conditions and risk appetites.

The GSR shows how many ounces of silver it takes to buy one ounce of gold. The ratio shows market risk, liquidity conditions, and investor sentiment through its fluctuating values.

The GSR rises when investors show increased caution, but declines when they become more willing to take risks, which leads to improved silver market performance relative to gold.

When GSR Rises: Defensive Tone, Liquidity Stress

Throughout 2024, NFTRH observed that the GSR was generally increasing, meaning gold prices were holding up better than silver. This was interpreted as:

• The market displayed a risk-off signal because investors chose to hold gold because of its stability, rather than silver's price fluctuations.
• The market shows reduced liquidity through this phenomenon, which emerges when the US dollar gains strength while inflation-linked assets decline in value.
• A warning that silver investors should be cautious, since silver tends to underperform when markets are uncertain or when deflation risks rise.

Tanashian compared the GSR to a ?metallic credit spread,? meaning it reflects stress in the financial system. A rising GSR supports the US dollar and weakens assets linked to inflation, such as silver and commodities.

When GSR Falls: Risk-On, Silver Opportunity

NFTRH documented two brief GSR reductions that occurred during late 2024 and early 2025. This suggested:

• The market indicates that it will adopt less strict monetary policies and reflationary strategies.
• The GSR needs to drop below particular technical thresholds, which include the 200-day simple moving average (SMA) of silver for the metal to outperform gold.
• The technical confirmation of a potential silver stock rally remains essential, according to Tanashian.

He explained that a falling GSR is not enough by itself. The market will display positive indicators through better sentiment, increasing inflation expectations, and silver chart patterns that confirm the upward trend.

FIGURE 1: Gold Price, Silver Price, and the GSR

Tactical Implications for Traders

NFTRH bases its analysis on careful examination of available data. Tanashian warned against assuming that changes in the GSR automatically lead to profitable trades. Instead, he advised:

• Multiple indicators, such as the HUI gold miner index and US dollar trends, and investor sentiment, need to confirm each other.
• Using the GSR as one tool among others, not a single deciding factor.
• Recognizing that silver is more speculative and tends to outperform only in specific periods of reflation or late in the economic cycle.

As an example, in October 2022, he wrote: ?For relief to come to the precious metals, and perhaps the wider ?inflation trades' and general markets, it would be best for gold to start to fail vs. silver? but that is not yet indicated by the technicals.?

The Macro Filter: The 30-Year Treasury Yield Continuum

Tanashian uses the 30-year US Treasury yield, which he calls ?The Continuum,? to establish if a GSR move represents a long-term pattern or a brief market fluctuation.

The Continuum shows the general state of the monetary system's health in the secular context. The current inflation pattern indicates that monetary authorities have not succeeded in managing inflation, which results in continuous price increases.

Validation: The most powerful setup occurs when the GSR is falling while the 30-year yield is rising. This combination shows that gold is responding to systemic risk and silver is beginning to confirm an inflationary trend. The GSR shows a downward trend because short-term policy actions that cause market prices to rise result in decreasing market yields.

Bottom Line for Investors

During times of GSR growth and using a defensive investment strategy, the market should purchase gold instead of silver.

When GSR values decline, the market should purchase silver, but other indicators must validate this trend.

Never analyze GSR in isolation. Use it together with sentiment data, U.S. dollar trends, and technical chart patterns.

Tanashian's approach is systematic, counterintuitive, and based on macro nuance. He does not follow silver rallies blindly, but he waits until GSR indicates a larger change in market psychology.

FIGURE 2: GSR Versus the 30-year US Treasury Yield

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