In antiquity gold fluctuated between 5 and 15 times the value of silver. It is currently worth 80x more than silver. This despite silver having greater industrial utility and being only 19x more abundant.
In: 4
There is much more speculation is gold than in silver. This is because the price is higher, so it takes less space to store your horde, so it’s more sought after as a speculative metal, so the price is higher. That’s a upward price spiral in the making.
It’s seen as a safe place to invest and this has pushed the margin way higher: culturally and psychologically it’s always been associated with wealth so people are comfortable buying it. You are right though that it’s not that useful compared to a
Lot of materials!
Gold is one, if not the only rare metal in the world that already exists in its solid state. While many other metals are gathered as minerals and have to be refined.
This allows gold to never corrode, or “rust” in our natural environment. This means that the gold piece you possess will never lose any amount of its weight, unless you willfully tamper it of course.
Silver does corrode naturally, so if you invested in silver, you’d eventually lose some of your initial money’s worth in weight.
Gold is also much more useful in electronics. It’s the third best conductor after silver and copper, and unlike those first two it does not tarnish into non-conductive oxides.
Same reason bitcoin costs more than snickerscoin – it’s speculative value is perceived as being higher. If i buy a bar of gold, i reasonably expect to be able to sell it for more than what i paid for it in a few years, by convincing younger people than myself that it’s worth that much more.
what you said is a reason for gold to be worth even worth valuable, its 19x less abundant but only 5 to 15 times the value?
Maybe a simple yet non-trite answer is that silver was in greater demand back in the day while the demand for gold has stayed steady. Looking at silver and gold prices over the last century, I see the ratio of gold to silver has more to do with the price of silver than the price of gold. When the ratio narrows, both metals will be rising but silver will be rocketing. Perhaps, the ancients preferred silver jewelry much more than we do. And maybe the minting industry back then was a greater driver of prices than electronics is today. Minting and jewelry demand may have even gone hand in hand. Since people equated silver with buying power due to silver coins being the predominant form of currency, silver jewelry may have been seen as a greater status symbol than it is today. Also, the margins on gold plaited silver jewelry may have been huge if con men could more easily get away with claiming the piece was 14k gold. That could have caused some of the extra demand.
Latest Answers