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| Updated: August 20,2004 |
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I recently read a article by a very knowledgeable writer on this subject, and it was indicated that gold would, in fact, be selling at the same price as silver if it were not for it's "monetary" value. Only if one has blinders on and too many charts in front of them, could this make sense. This assumption overlooks one huge obstacle to this theory, Supply. 37,000 tons of silver are produced each year, as opposed to 3,500 tons of annual gold production. Over ten times as much silver produced as gold. Why? Because there is much more silver than there is gold. In the world of "precious" metals, gold is more precious than silver, because it is less plentiful. The most precious is platinum, and strangely enough, it occurs even more infrequently than gold, and it has a value typically from 50% to 100% higher than gold. There is the answer, supply. Large supply, low value. Small supply high value, assuming demand is constant. If one ever spent any time in the field looking for gold (exploration), one would realize that it is not only elusive, but much more scarce than silver. When found together, (gold and silver), a typical assay might be 0.35 Oz/Ton Au and 10 Oz/Ton Ag. So, does the fact that there is more than 10 times the amount of silver as gold have any impact on its price? Absolutely, it is the primary determinant of it's value. So, if you are a chart person, always look at the supply and demand chart first, and you won't be steered wrong by rapidly ascending numbers, disappearing into the mathematical clouds. |
| But that's just my opinion. Charles Kubach Mine-Engineer.Com |
