Everything from Olympic medals to wedding bands tells us that gold is more valuable than silver. It’s just a fact that we seem to accept. Of course, things could change. Is it possible that we could one day — without being laughed at — say that silver is worth more than gold?
This seems like a far-fetched idea, and if someone were taking bets, smart money would be on gold persevering. But if there’s one thing that history has taught us, it’s that nothing is certain. In fact, there are several factors that point toward silver becoming more highly valued.
To fully understand this possibility and its likelihood, though, there are many issues to consider. From ancient history to modern times, it’s easy to see how silver could be more valuable than gold. And even if it never reaches that level, it might still make you more money.
There’s an adage that goes like this: “If you want to know the future, look to the past.” This is a brilliant piece of advice. And if we apply this wisdom to the history of precious metals, we may conclude that silver will surpass gold in value at some point. It hasn’t happened recently, but it has happened.
The most popular example dates back to Ancient Egypt. All the evidence currently available points to a culture that valued silver more than gold.
Still, several clues point toward a level of importance and rarity that made silver more valuable than gold:
Many historians believe a similar situation unfolded in Japan in the not-so-distant past. In the early 1800s when the country was first opening up to European trade, its citizens reveled at the sight of jewelry. Japan had no native silver, so they exchanged gold for silver at a rate of one to three.
Books about the history of precious metals also paint a picture in which silver is frequently worth more than gold throughout the ancient world. This excerpt from The Origin of Metallic Currency and Weight Standards makes that clear:
“It is therefore reasonable to suppose that towards the end of the Second Millennium B.C., gold and silver were almost of equal value, not alone in Egypt, but in other parts likewise of the ancient world. The great supply of silver had not yet been obtained which in the 10th century B.C. made silver at Jerusalem like stones.”
If anyone claims silver is worth more than gold, someone would likely think they were joking. Of course, experts once said the same thing about platinum. It also wasn’t long ago that the same theory held true for palladium. As history has shown us, both assumptions were wrong.
From 1997 to 2011, platinum’s price exceeded that of gold more often than not. An entire decade went by between those years where the yellow metal didn’t surpass platinum even once. The price has cooled down since then, but those who invested in platinum saw big returns.
More recently — in January 2019 — palladium took the precious metal top spot from gold. If you need one example of what could happen if/when silver is worth more than gold, just look at palladium’s performance recently. It went from $138 per ounce in 1997 to nearly $3,000 in 2021.
Who knows? Maybe buying silver today will pay off like buying palladium bullion in the ‘90s has.
Of course, silver’s value will not surpass gold’s based solely on hopes and dreams. When platinum flew by gold for so long, production problems that reduced supply were a likely culprit. With palladium, the demand skyrocketed due to its use in cleaner automobiles.
So, what could the catalyst be to make silver worth more than gold? A few potential situations exist in which this might occur. Here are the most likely:
Silver serves a variety of purposes in the industrial world. Besides being a popular bullion investment, it’s also commonly used in jewelry, silverware, photography, and medical devices. The overwhelming majority of the metal, however, gets used for industrial purposes.
Forms of silver go into solar energy, soldering, automobiles, and even chemical production. If some event occurred that suddenly spiked industrial production — particularly within certain industries — the price of silver could start climbing quickly.
About one-third of silver produced is used in consumer electronics. Of course, many of these items also feature gold. How, then, is it possible for silver to be worth more than gold if they’re both used for the same products? In this situation, it’s all about quantity.
If you look inside a modern cell phone, for example, you’ll find about 0.034 grams of gold. The silver in the device, however, weighs in at a whopping 0.35 grams. While this may not seem like a tremendous amount, it’s 10 times the weight of gold in the same device.
Other consumer products also use silver — with no gold content — so a large spike in electronics demand could theoretically take silver “to the moon.”
If some situation suddenly causes industrial or electronics demand to increase exponentially, the responsibility of providing silver may fall to the government. Unfortunately, nations around the globe have decreased their silver supplies over the years.
This reality is more clear in the U.S. than anywhere else. When the country stopped making silver coins for circulation, it had no need for massive reserves. However, if a sudden need arose, it would be necessary to purchase large amounts of the precious metal.
If there’s one thing that could make silver worth more than gold, it’s the federal government driving up demand. If these reserves suddenly revert to historic levels, the increased demand could cause a massive price spike.
Platinum occasionally spikes due to supply concerns. As it turns out, many are equally concerned about the prospect of a silver supply shortage. Even if we ignore the recent shortage at the U.S. Mint and the recent silver “raids,” science shows problems on the horizon.
By using a model created to predict global supply, a recent study posited that peak silver production could occur as early as 2027. Production would steadily decrease after that — with massive mines around the world eventually becoming depleted.
And while most experts agree there’s less gold than silver in the world, this might not always be the case. Gold is rarely “used up” since it mostly goes into jewelry and investment. On the other hand, the many uses of silver can deplete the resource beyond recovery.
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