Gold to silver ratio set to decline

India may be the world's top consumer of gold, with 66% increase in demand in 2010 to 963.1 tonnes, but analysts are urging investors to shore up on the white metal, expecting the gold to silver ratio to further drop. It is a buying opportunity for silver. The white metal, which rose at more than twice the rate of gold last year, continues to outperform its more lustrous peer, say analysts. In the process, it has narrowed its gap with gold, or the gold-silver ratio. Walia noted that during the year, silver prices increased sharply and had tested a high close to $50 per ounce. "The gold to silver ratio has been witnessing a decline since the end of January 2011 from an average of 47.80 witnessed in January 2011, to 41.72, witnessed in June 2011, even touching a low of 35.25, averaging in April 2011,'' she added. They added that out of 55% of global jewellery demand, India accounted for 32%, while China contributed 23% for global bar and coin investment. India is presently the world's top consumer of gold, with a 66% increase in demand in 2010 to 963.1 tonnes.

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