Gold and Silver: Comparing Earth’s Treasure Reserves

The gold-silver ratio is skewed, indicating silver’s undervaluation compared to gold, despite silver being rarer than commonly perceived.

Geological Insights: Silver and Gold

Geological estimates suggest there are approximately 19 ounces of silver for every ounce of gold in the earth’s crust. Historically, this ratio drops to around 11.2 ounces of silver per ounce of gold once mining records are factored in.

The Undervaluation of Silver

Despite its rarity, silver is often considered less valuable than gold, earning it the moniker of “poor man’s gold.” This perception overlooks silver’s numerous advantages, including its abundance, versatility, conductivity, antibacterial properties, and affordability.

The current gold-silver ratio exceeds 80, well above the historical average of 50–60, suggesting that either gold is overpriced, or the other is underpriced, or both.

Abundance of Silver in Earth’s Crust

While the exact quantity remains uncertain, silver is more abundant in the Earth’s crust than gold, with an estimated concentration of approximately 0.08 parts per million compared to gold’s 0.004 parts per million. However, gold’s resilience to weathering and erosion and its higher value contribute to its more concentrated mining and extraction.

Gold and Silver Above-Ground Reserves

According to the World Gold Council, approximately 205,238 metric tons of gold have been mined to date, while the US Geological Survey indicates around 1,740,000 metric tons of silver have been mined. This translates to roughly 750% more than gold above ground.

As of January 2022, silver’s total reserves were approximately 530,000 metric tons, compared to around 54,000 metric tons of unmined gold reserves. This suggests there is at least ten times as much unmined compared to the other globally.

Conclusion

Despite silver’s greater abundance in the Earth’s crust, market dynamics and historical perceptions often undervalue it compared to gold. However, current ratios indicate the potential for silver’s value to rise relative to gold, making it an intriguing prospect for investors attentive to market trends and geological realities.

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