Not only is gold worth significantly more per ounce than silver, but it's also the denser of the two metals, making a specific volume of gold worth much more than an equal volume of silver. Although silver can be polished and textured in multiple ways to capture light and attention, there is no metal left like gold. Unlike other elements, gold naturally has a subtle range of unique and beautiful colors. The atoms in gold are actually heavier than in silver and other metals.
This attribute causes electrons to move faster, which in turn allows some of the light to be absorbed by gold, a process that Einstein's theory of relativity helped to discern. Gold is also more valuable than silver because it is available in much smaller quantities than silver. It is estimated that all the gold that has been mined throughout history and that has not yet been mined can fit in just over three Olympic-sized swimming pools with a total of 244,000 metric tons. Compare that to silver, which has approximately 1.74 million metric tons that have been mined to date, not including what has not yet been mined.
The first thing that differentiates silver from gold is the fact that it has extensive practical uses. It is estimated that about half of the demand comes from industrial uses. Of course, gold also has some industrial uses, phone chips have some gold in them, for example, but the potential for increased demand for silver is much greater. However, silver has much more industrial and commercial use than gold.
Approximately half of all silver bought and sold on the market is used commercially, with applications ranging from dentistry to electronics. It is still quite small compared to other metals, which are almost entirely used for production. This provides investors with a basis on which to judge and predict silver price movements, since they can make decisions based on factors such as industry needs and the evolution of the global economy. Although no major economy is using gold or silver as the basis of its currency anymore, investors continue to view these two metals as active deposits of value.
Therefore, part of the reason gold has always had value lies in the psychology and nature of human experience. I have been warning about this for some time, and it seems that now even big banks, such as Goldman Sachs, recommend the yellow metal as an investment. The best-known precious metals are gold and silver, however, there is a feeling that gold is more valuable than silver and with good reason. As expected, gold has had to surpass its previous highs for people to realize that, fundamentally, gold and silver will rise much higher.
So, while many central banks have increased their gold holdings, silver has gone unnoticed. While short-term fluctuations in gold prices receive much attention, gold is relatively stable as a long-term investment. The recent increase in gold and silver bars has renewed the interest of retail and institutional investors. From an elementary perspective, gold is the most logical option as a medium of exchange for goods and services.
As a result, many investors keep gold in their portfolio specifically if they need liquidity during a recession. A good S%26P 500 index fund will do better than gold in the long run, but it can be a good countercyclical asset if you want to guarantee liquidity in the event of a recession. The price of gold is inherently more stable because demand will not increase dramatically and that is why a gold standard would be preferable to a silver standard.