The ratio has spent most of the modern era between 50 and 80, spiking above 120 in the March 2020 panic and falling toward 30 in the 1980 and 2011 silver manias. High readings are read as silver being cheap relative to gold, low readings the reverse.
Trading it requires balancing notional, not contract count: one gold contract is 100 ounces and one silver contract is 5,000. Traders also use it as a risk-appetite indicator, since silver's industrial demand makes it the more cyclical of the two.
Example: gold $2,400, silver $30, ratio 80. A balanced spread needs $240,000 of each side: 1 gold contract against $240,000 / $150,000 = 1.6 silver contracts, so 5 gold against 8 silver is the practical ratio.
Related: gc, silver-futures, intercommodity-spread, hedge-ratio, troy-ounce