Gold and silver have been used as money for millennia until relatively recently.  But, even though they have a historical connection, the current fundamentals of each are very different.  Following are some facts:



There is an estimated 6 billion ounces of above ground gold.

There is an estimated 2 – 2.5 billion ounces of above ground silver bullion in 1000 oz. bars which is the main form used for silver users and investors. About 25 Boz. total in all forms.

Gold has a market value of about $11.6 trillion (at $1940/oz) or about 200 times the market value of silver.

This stockpile of silver has a value of $54 – $68 billion (at $27.10/oz.).

A small percentage of gold gets consumed each year for fabrication/jewelry

Silver is consumed in industry. About 75% of the silver mined for the last 9 years has been consumed with only about 18% of the supply being recycled.

Recently (09/20), the gold/silver ratio has been running around 70:1 and was over 120:1 in March 2020.

Historically, the gold/silver ratio has been much less. Think of the $20 gold piece and the silver dollar- about 16:1 due to the metal weight differences. This is also one of the only disadvantages of silver is that it is heavier per value by that same ratio.

I think that gold will do well in the foreseeable future, but I think silver will do even better.  I see commentators saying that gold is going to $5000 per ounce and higher and they may be right.  But, historically when gold goes up the gold:silver ratio goes down.  In 2011 when silver hit almost $50/oz. the Au:Ag ratio was at 31.5:1.  So, if gold goes up to $5000/oz and the ratio is 31.5:1 then silver will be $158/oz.  

Supply & Demand

The following table shows the average silver supply and demand (use) averaged for the last 9 years according to the Silver Institute 2020 Supply & Demand report.

Silver Institute 2020 Averages 2011 -2019 Moz.
Mine Production 845
Net Government Sales 2
Recycling 184
Total Supply 1030
Jewelry 188
Photovoltaics 74
Photography 43
Silverware 52
Other Industrial 410
Total Demand 767
Surplus 263