Both of them are considered precious metals, along with platinum and palladium.
But Gold and Silver are more mainstream cos... well... historically, people know them as currency.
It's real money. Real physical money, only a couple of hundred years back, people actually paid others with physical lumps of these precious metals.
As I did my research, I came down to a conclusion...
Gold has retained it's status as a "reserve" store of value, however, silver has lost it's place.
Gold and silver used to be used as currency cos it's pretty to look at, and it's rare.
Throughout the whole world, gold and silver were used as currency.
However, silver is no longer rare. Gold on the other hand has gotten rarer.
Industry trade group The World Gold Council estimates that since that first gold bead was smelted, humans have mined roughly 190,000 metric tons of gold -- roughly 77% of global recoverable reserves.
The World Gold Council estimates that remaining reserves worldwide amount to just 30% of what's been mined already -- 54,000 metric tons of gold in sufficient concentrations, and buried at sufficiently accessible depths, to be mined at reasonable cost.
-https://www.fool.com/investing/2018/05/12/how-much-gold-is-left-in-the-world.aspx
So basically, there's more gold that has already been mined compared to gold still underground.
Estimated 190,000 metric tons already mined with 54,000 metric tons still left buried and it's harder to mine them, cos the easier places to mine them have already been mined.
HOWEVER...
.... there is roughy 7.5 trillion kg of silver throughout the earth’s crust.
To date, some 1.4 billion kg of silver have been mined throughout human history. However, silver corrodes, and just under half of that silver no longer exists as a metal. Of what has been mined, only 777 million kg still exists.
-https://articles.royalmintbullion.com/how-rare-are-precious-metals/#:~:text=Using%20the%20same%20estimates%2C%20there,been%20mined%20throughout%20human%20history.
Anyway... There's a lot of silver still left available for mining.
Whereas for gold, there's not much left in the earth.
So when prices of silver increase, then companies will just go and mine more silver, driving the price of silver down again due to increased supply.
It's cheap to mine silver, cos it's easier to find.
It's not like gold, where it gets harder to mine cos there's so little of it left and at tough to mine areas.
So silver has become like any common industrial metal.
If there is more demand due to the economy, then companies will mine more and thus, push the price of silver down again. If demand drops, then they stop mining and the prices rise.
Just like copper or iron.
However, silver is consumed when used. There are medical uses, silver is used for photography, stuff like that... and silver is more reactive than gold. So there are chemical uses for silver.
Ok, it's noted that there are more and more new uses being discovered for silver but the fact is, there is still a lot left unmined in the Earth's crust, and usage isn't that much every year.
This is very different from gold.
Gold, has no real use, well... there are uses for electronics and computers but not much is used. Also, it's expensive. It makes more sense to hoard gold than to use it.
Countries hoard gold as a financial backing. Like China, US, Germany, etc...
So if you want to invest in precious metals as a store of value, gold is probably going to be better than silver. But do note, gold isn't a get rich quick asset. It's known as a store of value. Keyword... STORE... it doesn't grow. It stores. So it probably only counters inflation in the long run.
I read somewhere...
In the old days, a 1 oz gold coin could buy you a nice suit...
Now, a 1 oz gold coin could also buy you a nice suit...
Considering that gold is around $1700 at this time, yes, I'd say that's true.
But that's all you get. A nice suit. Nothing more. I'm talking about a really nice suit.
Whereas if you invest in a growth asset, you could probably get more than just a nice suit as time passes.
But of course in that case then you'll need to invest in the right asset.
Ok so bottom line...
In my opinion, gold is still considered a precious metal for store of value.
However, silver is no longer such an asset. It has become like any other industrial metal used for production of other things, BUT with a speculative characteristic, cos there are still a few people who believe silver to be a precious metal for storage of value.
There's just too much silver left in the ground for it to be considered precious. Maybe donkey years ago silver was still rare... but not anymore.
The number of uses of silver is increasing but not significantly.
Even rare earths are depleting faster than silver.
So... those Tiffany or Pandora jewelry... yea. Probably not worth much. Just paying for the brand.
1 troy ounce of silver (US$18) is actually quite heavy when you feel it in your hands. 31 grams.
A ring is typically around 5 grams.
So the value of the silver in the ring is just US$3... Anything more you pay for that is just design and brand.
Yea... nope silver isn't a store of value.
That's it...
Once again...
These thoughts are my own analysis and thoughts, please do not use it as an indication to buy or sell. Please do your own research before making any decisions.
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