Almost no serious investor or analyst would argue that gold is overvalued today – or even that it has been in recent years, despite record peaks. Some argue that price manipulation on the part of central banks, interested in propping up and legitimizing their currencies, has kept the value of gold far below where it should be today. Whether those theories are true or not, experts peg the price of gold in Canada and the world between undervalued and accurately valued.
On the other hand, silver has reached historic levels of undervaluation; you only have to compare the historic gold-to-silver ratio with today’s. For thousands of years, gold and silver had a remarkably stable relationship with a ratio of about 1:16. That means that it cost sixteen ounces of silver to buy one ounce of gold, while today, it’s roughly around 1:60 or even higher, depending on price fluctuations. For gold and silver investors, watching the gold-to-silver ratio is an important way of understanding how precious metals can be undervalued, and how that means there’s an opportunity for growth. Now is a great time to own gold, but silver could be on the cusp of explosive growth if the gold-to-silver ratio goes back to historic levels, and there are some compelling reasons why it might.
Silver is frequently cited as gold’s more common cousin, and it’s one reason that historically, it’s been less valuable than gold. Underground, silver is more common than gold, but above, silver is actually less widely available than gold, thanks to two factors:
a) Silver is more frequently used in medical, industrial, and consumer products than gold, exhausting silver supplies.
b) Its present-day low price means it’s not being mined as extensively as it could be, and fewer mining companies are locating new sources.
At Silver Gold Bull, we’ve seen it – more and more investors want to buy silver coins and bars. Mints are struggling to keep up with the increased demand, especially with nearly half of all silver produced going to industrial uses. Along with gold, silver is used to preserve wealth against inflation and bear markets, also known as a safe haven asset. This is Economics 101 – when demand outpaces supply, the price goes up.
Industrial use has put a huge strain on global silver supplies, as it’s using silver faster than it can be mined. You can find silver used in:
-And more than there is room to list
Not only is industrial demand for silver strong, much of the silver used in these consumer goods is unrecoverable and there is no substitute for many of its applications. As long as industrial demand remains strong for silver, there will be upward pressure on its price.
If you’re convinced, it may be time to look into Silver Gold Bull investment options in gold and silver. At Silver Gold Bull, we have an extensive inventory of gold and silver products, including collectibles, bullion, and bullion jewelry. Bullion silver coins and bars are the most practical purchase for investors, and it’s easy to learn about buying silver coins with us. Silver is also affordable – you can buy the real thing and have it shipped to your home, while high net worth investors can store large quantities of silver bars in our allocated storage facilities. Invest in silver if you want a precious metal that’s primed for major growth potential.