At today's market closing, the asking price of gold was $1,476.40/oz, while silver stood at $41.00/oz. This means that one can exchange 36 American Silver Eagle coins for an American Gold Eagle on the open market.
American Gold Eagle and Silver Eagle coins have face values of $50 and $1, respectively, which implies that the ratio of silver to gold is fixed at 50:1. However, face values have nothing to do with market value, which is based on consumer demand. The silver to gold ratio since 1973 has averaged approximately 55:1, which is much wider than the current 36:1 ratio between the precious metals.
The current 36:1 ratio between silver and gold is the narrowest we have seen since the mid-1980's. This narrowing ratio between silver and gold prices shows that silver's value relative to gold has increased, which is an historical indication that the metals' rally may be reaching its peak. In the mean time, we could see silver prices rise even more given the eratic growth of today's global economy.