Gold and silver have been around for thousands of years, but today their uses are somewhat different than they were in ancient times. Silver and gold are universal; they are accepted across all countries and all cultures. You can always convert gold and silver into any good, service or currency. The amount of protection they offer you as a storage of wealth is unparalleled.
Today, silver has heavy industrial demand and roughly a third of it is used in electronics as a conductor or a contact in electrical switches. Silver is used in computers, keyboards, televisions, batteries, cell phones, calculators, cameras, watches, clocks, and microwave ovens. Silver is also used in coins, medals, jewelry, silverware, photography and even solar panels. Considering the wide range of applications, silver will always have value. Gold is unique as it conducts electricity and does not tarnish. It is used in most electronic devices, including computers and cell phones. Gold contained in connectors, switches and relay contacts allows electronic based devices to remain free of corrosion. Gold can also be used in Jewelry, aerospace and the medical world.
The gold to silver ratio is how many ounces of silver it takes to buy one ounce of gold. In ancient times from 1000 B.C to the 1800’s the gold to silver ratio was in most parts of the world, between 10-15. Alexander the Great set the relationship of gold to silver at 10 to 1 and in 1792, Congress under President George Washington fixed the U.S. gold-to-silver ratio at 15 to 1. Today, the gold to silver ratio is nearly 75 to 1.
According to GFMS, Thomson Reuters and the Silver institute, 885.8 million ounces of silver was mined in 2016 which is equivalent to approximately 25,112 Metric Tons. According to Statista 3,100 metric tons of Gold was mined in 2016. This shows that roughly 8.1 ounces of silver is being mined for every one ounce of gold. According to GFMS, Thomson Reuters and the Silver institute from the years 2000 to 2015 we have experienced 12 years of deficit in the silver market and 4 years of surplus. In the last 10 years we have had a deficit of more than 600 million ounces of silver, which is equivalent to almost one complete year of global mining production. There is virtually no correlation between the price of silver and physical surpluses and deficits over the last 16 years, which shows that the paper price of silver does not actually represent its actual demand. In other words, the price of silver is artificially too low. It is mathematically impossible that the gold to silver ratio stays at 75 to 1 with the lack of production, continued deficits, and increasing demand. Based on this information it is most likely that the price of silver reaches a ratio of between 10 and 20 to that of gold making the price of silver between roughly $60-$125 per ounce within the next few years.