What is the gold:silver ratio?
It is simply a ratio which consists of the price of gold: price of silver. The main value of this ratio is to look at the historical value of this ratio and see whether gold is undervalued/overvalued versus silver prices.
If you think gold is undervalued, how do you trade on this idea without buying physical gold?
If you do not want the hassle of storing your gold in a secure vault when you take delivery of your gold, another easier way to make money from this idea is to buy companies who mine gold/are involved in the gold industry. If you wish to focus, you may buy shares in only one gold company. However, if you wish to diversify and buy a basket of companies in the gold industry, it is easier to invest in a Gold ETF (Exchange Traded Fund)
What is gold used for?
There are many industrial purpose uses for gold. It is used for the CPUs inside your computer. The main reason gold is used inside electronics is its high resistance to corrosion, and it conducts electricity very well. The main use of gold nowadays is for jewellry and accessories in the consumer market. People mainly buy gold as an hedge against economic downturn/uncertainty as gold prices go up when there is an economic downturn.