gold/silver ratio

Here's the key bit that was written in 2007, with emphasis added:

There is one relationship in particular that, when applied to today's market, tells me that the gold price could more than double from its current levels.

The gold/silver ratio is what I'm talking about it. Last time both gold and silver rode a boom in commodities, the gold/silver ratio was 15. That means it took you 15 ounces of silver to buy an ounce of gold. In 1980, that put the gold price at $728.40 and the silver price at $48.00. Do you see what I'm getting at here?

If the gold/silver ratio goes back to where it was in 1980, it's a virtual certainty that BOTH gold and silver prices will soar. For example, if gold stayed exactly where it is as I write today (about $648), a return to the historic gold/silver ratio I'm talking about would mean - get this - a silver price of about of US$46 (it's currently trading at just above $13.00).

Does that sound unlikely to you? It does to me. Here's why.

It is highly unlikely the gold/silver ratio will return to its historic low through a flat gold price and a rising silver price. No. For at least three reasons I'll show you in just a moment, BOTH gold and silver will rise in the coming sixteen months. And even if the ratio does not return to its historic low, gold prices may more than double.

--Gold has more than doubled since then, although sliver is not quite at $46. But the gold/silver ratio has continued to trend down to its 1980 high, while both gold and silver have moved higher. What it means is silver has been doing a lot of catching up, even though gold hasn't exactly slowed down. Take a look.
--With gold's big overnight move the ratio is at about 37. That's as low as it's been since 1983. And that is a pretty interesting technical point. If the ratio keeps declining, it means silver prices are headed much higher very soon.

--However, bull markets are rarely so easy to analyse. On the day the Gold Symposium began in Sydney last year gold made a similar move and silver bolted. Both then corrected, although the correction was modest.

--There is strong investment demand for both metals now. And there is a fair whiff of inflation fears in the market. If those were to go away-interest rate rises from central bankers might do the trick-you'd expect to see a pretty hefty correction in gold and silver.