January 16: Silver Hits Records in Canada; Gold/Silver Ratio Squeezes
The bmo gold silver ratio is in focus as silver hits records in Canada and U.S. futures hold near US$92. Spot silver is up about 27% year to date, outpacing gold and squeezing the gold-to-silver ratio. Canadian buyers are seeing higher CAD quotes and strong retail demand. We break down what this means for allocations, how ratio compression can guide rebalancing, and practical steps for exposure to bullion, ETFs, and silver mining stocks without taking on undue risk.
Why silver is outpacing gold now
Silver’s dual role supports demand. Softer rate expectations, a weaker U.S. dollar at times, and steady industrial use in solar and electronics lift prices. With a 27% year-to-date gain, silver is outrunning gold and pressing the bmo gold silver ratio lower. A tighter ratio often signals momentum in silver, but it can also increase short-term volatility, so risk controls matter.
In Canada, local quotes are at records, supported by CAD pricing, dealer premiums, and brisk retail interest in coins and bars. An Ontario bullion dealer noted strong selling and buying interest as prices surged, underscoring tight supply conditions source. For Canadian investors, that means wider bid-ask spreads on physical items and the need to compare all-in costs versus ETFs and miners before adding exposure.
What the ratio signals for Canadian portfolios
The gold-to-silver ratio tracks how many ounces of silver equal one ounce of gold. When the bmo gold silver ratio compresses, silver is outperforming. That trend often favours adding or keeping silver over gold tactically. We prefer waiting for pullbacks before leaning in, then reassessing if momentum holds and macro data on inflation, growth, and rates continue to support industrial demand.
We start with clear ranges. If the bmo gold silver ratio keeps tightening, we tilt modestly toward silver until position sizes reach preset limits. If the ratio widens again, we rotate back to gold. Use limit orders, keep cash for dips, and size positions small. This keeps decisions rule-based instead of emotional during fast price moves.
Silver mining stocks vs bullion and ETFs
Silver mining stocks often move more than the metal, both up and down. This month, miners jumped as silver held above the US$90 milestone, according to reporting from CNBC source. Miners carry operating, cost, and geopolitical risks. Bullion and ETFs reduce company risks but will not capture the same upside if the bmo gold silver ratio keeps compressing.
We like a core-satellite plan. Keep a core in bullion or a low-cost silver ETF for stability, then add a smaller satellite in silver mining stocks for upside potential. For Canadian accounts, consider CAD-listed vehicles for simpler currency handling. Check expense ratios, trading spreads, and daily volume. Revisit weights monthly if the bmo gold silver ratio shifts quickly.
Practical steps for the next quarter
Average in over weeks, not days. Use pullback buys rather than chasing breakouts. For physical buyers, compare CAD premiums and delivery times. For ETFs and miners, set stop levels and maximum position sizes. If silver rallies further and the bmo gold silver ratio tightens, trail stops to protect gains and rebalance if any sleeve exceeds your target.
Track the bmo gold silver ratio weekly, watch silver futures support and resistance, and follow central bank commentary on rates. For silver mining stocks, note quarterly results, cost guidance, and capex updates. In Canada, keep an eye on CAD strength, since currency shifts can change returns. Document each change to maintain a clear investment record.
Final Thoughts
Silver’s record highs in Canada, a 27% year-to-date surge, and U.S. futures near US$92 have pushed the bmo gold silver ratio lower. That compression points to continued relative strength in silver. We suggest a core in bullion or a low-cost ETF, with a smaller satellite in silver mining stocks for upside. Average in on pullbacks, use preset ranges to rebalance between silver and gold, and protect gains with stop rules. Watch the ratio weekly, check Canadian premiums, and review miner earnings and costs. Keep sizing modest, and let rules, not headlines, drive your next moves.
FAQs
What is the bmo gold silver ratio and why does it matter now?
It tracks how many ounces of silver equal one ounce of gold. A falling bmo gold silver ratio means silver is outperforming. With silver at Canadian records and U.S. futures near US$92, the ratio has compressed, supporting a tactical tilt toward silver over gold while using clear risk controls and rebalancing rules.
How can Canadian investors get exposure to silver?
You can buy physical coins and bars, CAD-listed silver ETFs, or silver mining stocks on the TSX. Physical adds storage and premiums. ETFs are liquid and simple for RRSPs and TFSAs. Miners can amplify gains but carry company and cost risks. Start with a core ETF, then add miners as a satellite.
Are silver mining stocks better than bullion during ratio compression?
They can outperform when silver rises because operations add upside, but they also fall harder on pullbacks. Bullion and ETFs reduce company risk. We usually keep a core in bullion or ETFs, then add a smaller sleeve in miners if the bmo gold silver ratio keeps tightening and risk controls are in place.
Should I wait for a pullback before buying?
We prefer averaging in over several buys. Use pullbacks to add rather than chasing new highs. Compare all-in CAD costs for physical, and check spreads for ETFs and miners. Set stop levels, position limits, and rebalancing rules tied to the bmo gold silver ratio to keep risk in check.
Disclaimer:
The content shared by Meyka AI PTY LTD is solely for research and informational purposes.
Meyka is not a financial advisory service, and the information provided should not be considered investment or trading advice.
