Best of the Week
Most Popular
1. Crude Oil and Water: How Climate Change is Threatening our Two Most Precious Commodities - Richard_Mills
2.The Potential $54 Trillion Cost Of The Fed's Planned Interest Rate Increases - Dan_Amerman
3.Best Cash ISA Savings for Rising UK Interest Rates and High Inflation - March 2018 - Nadeem_Walayat
4.Fed Interest Hikes, US Dollar, and Gold - Zeal_LLC
5.What Happens Next after February’s Stock Market Selloff - Troy_Bombardia
6.The 'Beast from the East' UK Extreme Snow Weather - Sheffield Day 2 - N_Walayat
7.Currencies Will Be ‘Flushed Down the Toilet’ Triggering a ‘Mad Rush into Gold’ - MoneyMetals
8.Significant Decline In Stocks On The Cards! -Enda_Glynn
9.Land Rover Discovery Sport Extreme Driving "Beast from the East" Snow Weather Test - N_Walayat
10.SILVER Large Specualtors Net Short Position 15 Year Anniversary - Clive_Maund
Last 7 days
Watch This Group Signal Stock Market Trend Changes - 22nd Mar 18
Stocks are Gapping Beneath the Trendline Support - 22nd Mar 18
Fed Action Casts Shadow on Bullish Case for Stocks - 22nd Mar 18
A Strong Economy and Weak Stock Market is Bullish for Stocks - 22nd Mar 18
Fed Raises US Interest Rates 25bp – Where Are We In The Stock Market Cycle? - 22nd Mar 18
Why Spotify Will Likely Surge During Its IPO - 22nd Mar 18
SY Police Arrest Woman for Blowing Trumpet at Sheffield Tree Felling Protest - 22nd Mar 18
Facebook: The Anti-Social Network Covert Data Gathering - 21st Mar 18
Additional Signs for Gold and Silver Amid Increasing FOMC Tension - 21st Mar 18
Credit Concerns In U.S. Growing As LIBOR OIS Surges to 2009 High - 21st Mar 18
Stock Markets Are Flat-to-lower Before the FOMC - 21st Mar 18
Will Powell’s Actions Pop Stock Market Perfection - 21st Mar 18
Economic Moral Hazards of the International Criminal Court - and Philippines Withdrawal - 21st Mar 18
Larry Kudlow vs. Vladimir Putin on Gold - 21st Mar 18
Trump Builds Economy and War Machine - 21st Mar 18
This Stock Market "Illusion" Can Destroy Once-Vibrant Portfolios - 21st Mar 18
Gold Short-term Pull Back in Progress - 20th Mar 18
Stocks Appear to be Under Pressure - 20th Mar 18
Time To Eliminate Your Wall Street Tax? - 20th Mar 18
The Beast from the East Snow, UK Roads Driving Car Accidents - 20th Mar 18
Can Bitcoin Price Rally Continue After Paypal Fake FUD Attack? - 19th Mar 18
2018 Reversal Dates for Gold, Silver and Gold Stocks - 19th Mar 18
This Tech Breakthrough Could Save The Electric Car Market - 19th Mar 18
Stocks Set to Open Lower, Should You Buy? - 19th Mar 18
The Wealth Machine That Rising Interest Rates Create Conflict With The National Debt - 19th Mar 18
Affiliate Marketing Tips and Network Recommendations - 19th Mar 18
Do Stocks Bull Market Tops Need Breadth Divergences? - 19th Mar 18
Doritos Instant £500 Win! Why Super Market Shelves are Empty - 19th Mar 18
Bonds, Inflation & the Market Amigos - 19th Mar 18
US Housing Real Estate Market and Banking Pressures Are Building - 19th Mar 18
Stock Market Bulls Last Stand? - 18th Mar 18
Putin Flip-Flops Like A Drunken Whore On Bitcoin Cryptocurrency Legalization - 18th Mar 18
How to Legally Manipulate Interest Rates - 18th Mar 18
Return of Stock Market Volatility Amidst Political Chaos and Uncertain Economy - 18th Mar 18
Bitcoin Price Trend Forecast, Paypal FUD Fake Cryptocurrency Warning - 17th Mar 18
Strong Earnings Growth is Bullish for Stocks - 17th Mar 18
The War on the Post Office - 17th Mar 18
GDX Gold Mining Stocks Fundamentals - 16th Mar 18
Nationalism, Not the Russians, got Trump Elected - 16th Mar 18
Has Bitcoin Bought It? - 16th Mar 18
Crude Oil Price – Who Wants the Triangle? - 16th Mar 18
PayPal Cease Trading Crypto Currency Bitcoin Warning Email Sophisticated Fake Scam? - 16th Mar 18
EUR/USD – Something Old, Something New and… Something Blue - 16th Mar 18

Market Oracle FREE Newsletter

Urgent Stock Market Message

Gold and Silver Supply - Will the Real Ratio Please Step Forward?

Commodities / Gold and Silver 2012 Nov 16, 2012 - 08:05 AM GMT

By: Dr_Jeff_Lewis


Best Financial Markets Analysis ArticleThose attracted to the precious metals markets are often curious about the various ratios existing between gold and silver, as well as what these ratios might reveal about the relative fair values of these key investment metals. 

Various Gold and Silver Ratios

The following bullet points provide some facts you can use in your silver/gold ratio analysis.

Above ground:

  • Investment grade: The ratio of investment grade gold existing in bullion form is as much as five times that available for silver.
  • Everything else: All the gold ever mined has been estimated at 160,000- 170,000 tons of gold or roughly 5 billion Troy Ounces. A reasonable estimate for the total amount of silver mined is 56 billion Troy Ounces.  This makes the “ever mined” ratio roughly 11.2 to 1.

Below ground:

  • Potential: The below ground ratio of silver to gold has been estimated at 17 to 1.
  • Actually Mined: Typically, 10 ounces of silver are actually mined for every 1 ounce of gold mined. On an annual basis, roughly 900 million ounces of silver are mined overall compared with just 90 million ounces of gold.

The Paper Markets:

  • The ratio of the price of silver to gold as recently determined by the paper futures market is roughly 53 ounces of silver to one ounce of gold. 
  • As of today, spot silver is trading at $32.65 per ounce, while spot gold is priced at $1724.00 per ounce, making the price ratio a remarkably high 52.80. 

Other Factors to Take Into Account:

  • Sequestration: Both precious metals are highly sequestered and accumulated by individuals for strong psychological reasons, and so they are typically held by strong hands.
  • Industrial Demand: Silver is typically consumed by its industrial applications, such as in medicines, photography and solar cells. Gold is used much more sparingly by industry and is more likely to be used in readily recyclable applications like jewelry.
  • Coin Investment Demand: According to the U.S. Mint, roughly 50 times as much silver is being bought compared to gold for coin investment purposes.

The Ratio on The Street

Given the various ratios mentioned in the previous section, which are typically much lower than those observed in the paper markets, one must be left wondering just how such a high silver to gold price ratio can be sustained over time in the commodity markets and on The Street. 

Although peak silver may never come in our lifetimes, this supply and demand situation indicates that silver’s price is very likely to rise relative to gold over the longer term, thereby reducing the silver/gold ratio substantially.

More Reasons Why Silver Should Rise Relative to Gold

Need some more reasons that the price of silver will soon be playing catch up to gold’s price?

Although gold may be easier to hide or carry than silver due to it being more valuable per ounce, and both silver and gold can be purchased in investment grade forms, consider the following benefits of owning silver:

  • You get more physical silver for the fiat money you spend.
  • Silver investors stand to gain more as the silver/gold ratio falls.
  • Silver is more suitable for people with smaller amounts to invest.
  • The average person buying silver has a store of value and a backup hard currency in smaller denominations that are more easily spent for necessities.

Of course, you can always easily trade your silver for gold, and vice versa, while other commodities are not nearly as easy to barter with.

For more articles like this, and to stay updated on the most important economic, financial, political and market events related to silver and precious metals, visit

By Dr. Jeff Lewis

    Dr. Jeffrey Lewis, in addition to running a busy medical practice, is the editor of and

    Copyright © 2012 Dr. Jeff Lewis- All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

© 2005-2018 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules