What do price ratios tell us about the value of gold?

The lack of an income stream makes it notoriously hard to value gold objectively. And while the price of gold relative to other assets – such as silver, oil and equities – is often used to assess the fair value of gold, structural changes over time can limit the usefulness of gold price ratios. Regardless, our forecasts imply that gold/silver and gold/oil price ratios will remain well above their historical averages.

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