The Gold/Silver Ratio - Gold, Silver, and their Relationship
by Dan Popescu - Goldbroker
Published : January 31st, 2014
A somewhat long essay using a lot of graphs on the historical perspective of the gold/silver relationship.
Interesting facts:
"If we study the gold and silver supply, we observe that the total silver supply in relation to gold is 7/1, and the mining supply ratio is 9/1. 60% of the gold market and 75% of the silver market are fed by mining production."
"…known silver reserves have shrunk 95% since the end of World War II. This is due to a persistent deficit between supply and demand that is continuing today. This known deficit is remarkable, since there has been steady growth of silver world production in the last 50 years, but not enough to satisfy growing industrial demand."
"Silver’s price never moves independently from gold, despite its fundamentals. Silver’s monetary aspect dictates its price at this moment. Silver investors are much the same as gold investors, in that they focus mainly on the monetary aspect of silver, instead of its industrial aspect. If gold ever makes a return in the international monetary system, silver will be traded as a currency, though it will not, I believe, become actual currency."
After 17 graphs, the conclusion:
"I think there is no reason why the gold/silver ratio should come back to 15/1 or any other level. Both gold and silver have their own stock, supply and demand characteristics, but there remains a very strong correlation between them. The crisis in the international monetary system is going to push both precious metals to much higher prices within five years. The gold/silver ratio will perhaps decline in the coming years, but not by much (maybe 50/1), and certainly not all the way to 15/1 or even 20/1."
24hGOLD:
https://www.24hgold.com/english/news-gold-silver-the-gold-silver-ratio--gold-silver-and-their-relationship.aspx?article=5153063890H11690&redirect=false&contributor=Dan+Popescu&mk=1