1 gram of silver is included in every 12.5 tonnes of earth (27,600 lbs).
Because of this ratio, combined with silver’s extremely low market price, mining the precious metal is less profitable and enticing than mining many other metals.
Is silver really rarer than gold?
Surprisingly, above-ground silver is more valuable than gold.
In fact, practically all of the gold ever mined is still on the planet, and its uses are primarily limited to cash, movable wealth, and jewelry.
The demand for silver has risen dramatically in recent years for a variety of reasons, resulting in the near-complete elimination of the precious metal’s above-ground hoard. In fact, if things continue as they are, there’s a good probability that a silver scarcity will emerge in the following years.
There are supply constraints in addition to growing demand for silver. The cost of mining silver is significantly more than the price at which it is sold. In fact, the bulk of silver is mined as a byproduct of other metals, with only one gram of silver for every 27,000 pounds of earth. This, combined with silver’s extremely low market price, makes mining it less viable than mining other precious metals.
Silver, on the other hand, is currently regarded as an extremely rare and undervalued above-ground precious metal. Although there is now a supply shortage, many believe it will only be a matter of time before the price of silver reflects its full value.
Furthermore, there are likely a variety of explanations behind silver’s low spot price. Some assume that the industry is responsible for the low prices. The supply costs will remain low and profits will remain high due to the undervaluation of this precious metal. Furthermore, there is an issue with the way silver is sold. Silver would be completely sold out if people properly grasped its value and the investment opportunity it offers.
Whether you’re looking for expert silver price information or the finest location to purchase gold in Scottsdale, consult with reputable precious metal dealers who provide excellent service and have years of experience.
For more than 13th year in a row, the silver market has been in deficit.
The worldwide supply of silver has been continuously expanding since 2004, according to the Thomson Reuters 2014 Silver Survey. The same analysis also demonstrates that global demand for silver has been persistently higher than supply for at least 13 years, resulting in physical silver market shortages.
The gold market, on the other hand, has had a supply surplus every year since 2013. There were seven years in the same 13-year span when compared to silver when gold was in surplus.
The supply of silver does not appear to be keeping up with demand. It doesn’t help that when silver is utilized, the supply of silver is depleted.
According to studies, 98 percent of all gold mined throughout history is still held in coins, bars, jewelry, and artifacts.
Silver, on the other hand, is a different story.
Because silver is the best conductor of heat and electricity, it remains a preferred option in industrial applications. Silver has a wide range of applications as a result of this.
Silver is present in a wide range of devices, including printed circuit boards in computers and mobile phones, batteries, electrical switches, solar panels, television displays, RFID chips, and so on.
In medical applications, silver is also employed as an antibacterial agent. Silver is employed in wound dressings, the treatment of mercury toxicity, and as a cauterizing agent, among other things.
Unfortunately, when these industrial and medicinal applications of silver in items are used and destroyed, a substantial amount of silver is discarded as well. They end up in landfills because recycling them is too expensive.
It’s no surprise, then, that today there is less silver than gold above ground.
Only gold and silver have been used as money on a big scale over lengthy periods of time in history, out of gold, silver, and platinum. Platinum was regarded unworkable because it resembled numerous less expensive metals and was less malleable than gold or silver, making it harder to deal with.
Throughout history, silver has been used as money more frequently than gold. This can still be seen in the names of today’s currencies, which all refer to their silver origins.
Given that the gold-to-silver ratio is now hovering around 1:70, silver remains undervalued and unloved.
Consider that for a moment. When you buy silver, you’re getting a metal that has been used as money, has a wide range of industrial and medical applications, is in short supply, and is now undervalued!
It is certainly a once-in-a-lifetime opportunity to witness such a convergence of these forces.
Since the beginning of time, approximately 1.5 million tons of silver have been mined.
It would fit into a cube of 52 meters.
Because it is too difficult to recycle, a large portion of it ends up in landfills.
In 2013, 80% of new silver was mined, with the remaining 20% coming from scrap.
We generate roughly 1 billion ounces of gold per year, which amounts to about $16 billion.
In our global economy, this isn’t a tremendous sum of money.
A quarter of all silver is used in jewelry, 30% in coins and bars, and the balance in industrial applications.
Solar panels need almost 100 million ounces of gold.
Did you know that a mint julep’s cup is made of silver?
Frost might build on the outside of the cup because of the silver.
This article from Gold Silver does an excellent job of expressing the precious metal’s supply and demand.
The author claims that during the next few years, miners will extract less silver from the ground, which should bode well for the metal. I’m not convinced.
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The gold-to-silver ratio is a contentious topic. Since there is a long-term average of how many ounces of silver it takes to buy one ounce of gold, the theory goes.
The ratio has fluctuated from 15 to one in the 1980s and nearly 100 to one in the 1990s.
I recall Warren Buffett purchasing silver in the late 1990s at a price of around $3 per ounce.
Now that the ratio is in the 80s, silver bears believe it is time to purchase.
Over the previous few years, we’ve seen enough wild financial markets to know that things change.
What made us less enthusiastic about silver was the fact that more silver was mined between 2000 and 2017 than between 1900 and 1999. It’s logical.
In the 1930s, a miniature Caterpillar (CAT) was compared to a modern-day D-12.
New technology has the ability to move mountains.
It’s a lot easier to find silver now.
You enlarge the hole and extract a core sample.
Then there’s a computer model that tries to guess where the ore is.
With 196.4 million ounces of silver produced, Mexico is by far the world’s largest silver producer.
Peru comes in second with 147.5 million people.
They began mining in Mexico barely a few years after Christopher Columbus set foot on the continent.
Gold accounts for about half of their output.
At these locations, there would have to be a lot of protection. Steel, iron ore, and diesel gangs.
Silver mines used to generate 15 ounces of silver every ton of rock.
It’s now closer to four.
The simple silver has been discovered.
Pickax and mule would have taken out a lot of this easy silver in the 1800s.
There isn’t any more of that to be found.
In 2005, the largest mine in Fresnillo produced 33.4 million ounces at a grade of 15.2 ounces per ton.
By 2017, the mine has produced 15.2 million ounces at a grade of 6.5 ounces per ton.
That’s a significant decrease.
Given the lower production and deteriorating grades, it appears that the industry could discover more silver if it so desired.
This is one of the world’s largest mines.
Hecla owns Greens Creek, which is located off the shore of Juneau, Alaska (HL).
It produces around 8 million ounces and has been decreasing in recent years.
In Wallace, Idaho, You also can go to their Lucky Friday mine.
The point is that many of these silver-mining locations are quite secure.
Although Mexico is not the safest country, the government supports the industry, and the bad guys do not appear to be a major issue at this time. Canada, Peru, the United States, and China are all safe places to mine.
Africa is a difficult continent to mine. You have power outages, the government is constantly changing the laws, and employees are on strike. Alaska is where I’d rather be.
In investment, it took me a long time to realize this, but many times an entire industry gets the narrative incorrect.
Some used to be a strong proponent of Peak Oil until fracking demolished that thesis.
Offshore drillers and oil services have both been slain.
New technology arrived, and the United States, of all places, became a major player in the energy sector.
As you can expect, there will be news of new sites being discovered and money being invested in silver. Keep in mind that this is a small industry.
Silver is indeed cheap, and it could be a good time to buy.
It only appears that if the price rises, miners will be encouraged to expand production.
Then supply rises again, prices fall, and the cycle begins all over again. I believe the price of silver will continue to fall.
The price was $3 only a few years ago, and so much more has been mined since then.
We think now how rare is silver and the importance of investing in it now.
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