Hope at least a few of you are old enough to get that lone ranger reference. $19.37 for silver as of this writing, and $1225 for gold (2 more dollars till we break a record). All things being equal as far as demand is concerned, Silver should be $70 per ounce right now. According to the American Geological Institute Data Sheets for Geology in the Field, Laboratory, & Office, Data Sheet 57.1, "Abundance of Elements," on average silver occurs at 0.07 parts per million, and gold at 0.004 parts per million in the earth's crust. That means a natural silver to gold ratio of 17.5 to 1. Personally I think silver should go even higher than $70 when you factor in that the US supply of silver was down to 300 million oz as of about a year ago. Right now you have HSBC and some other banks shorting the hell out of silver trying to keep it down. Miners of silver are not keeping up with demand which is why we have a shrinking supply. (I believe we had 2.2 billion oz of supply about 20 years ago if i remember right.) Delivery will be forced one day and HSBC and the other banks shorting silver will have no choice but to buy at higher prices thereby pushing silver up even higher. I would not be surprised to see a 10-1 ratio of silver to gold one day in the next 1-5 years.
Brass sells for 1.65 per pound. If you could find a recycler that would buy such a small amount, I'm sure you could get 1 mexican centavo(for both of them together)
What about other supply sources like recycling scrap? Or large institutions flooding the market with their physical or paper holdings? What about demand? Is it truly valid to assume that "all things [are] equal as far as demand is concerned" here? If I were you, I would not be so quick to decide what the price ratio of silver-to-gold "should" be. In the investing sense *or* in the trading sense. ... But for what's it's worth, I too am delighted about silver's recent run up since I was long.
Silver is mostly an industrial metal that is consumed upon use. There are so many uses for silver, you would not believe. Photography, medicinal uses, mirrors & optics, electronics, dentistry,ect. Companies use silver for things you could not even imagine. Samsung makes washing machines that inject silver ions into the wash and rinse cycle to kill 99.9% of oder causing bacteria. Foodtouch uses silver based food packaging liners preserve food quality. Silver is capable of rendering stored drinking water potable for a long period of time. Water tanks on ships and airplanes are often "silvered". 100 years ago, people used to put a silver dollar into their milk bottles and that would keep the milk fresher for a longer period of time. But mostly we are consuming silver & its not worth the time or effort to recycle. We use up more silver than we produce worldwide. Sooner or later, its going to catch up. Their are many things we could stop using silver in, but there really is too many things that we use in medicine with silver and with more and more people getting sicker in the US, and 3rd world countries getting richer and having more and more access to medicines, I think silver is going to start getting used up faster and faster.
I have been advising friends and relatives to buy gold and silver for about a year now but only one person has taken my advice. A couple of days ago, without me even mentioning it, another relative said that they are now considering purchasing gold due to the economic problems in Europe and in the US. I would not be surprised to see the average person starting to invest in gold now that it is hitting new record highs. The influx of new gold and silver buyers could be the impetus for the next leg up.
Why does gold out perform silver to the degree that it does? Can be it as simple as it's a popularity contest? Seems absurd. Silver would seem like a better buy at this point.