Gold demand helps increase the price of silver

Gold Investing Strategies

Gold demand helps increase the price of silver

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Historically, silver has always played second fiddle to the value of gold. In the present day, it still is ranks below gold. But with the settings, the demand for gold may just catapult the price of silver, nearer to the price of gold than it has ever been.

Currently, gold and silver are priced at a ratio of 45:1. The reason for the price ratio, according to economist, is that silver mines some 60 years ago outnumber gold mines anywhere in the world, thus silver supplies are more common and demand is not that high.

But in the last 6 decades, hundreds to thousands of silver mines went out of business, closed or were converted into mining for different minerals. This resulted into the silver inventory depletion, kicking the demand for the metal.

And according to analysts, a market correction for the price of silver is due. If this happens, the price of silver to gold will be put to 10:1. This ratio will increase the price of silver tremendously.

If this happens, silver may be priced at 7 or 10 percent of the trading price of gold per ounce. For instance, if gold reaches the price of $4500 an ounce, then silver is sold at $450 an ounce.

Today, while the gold is playing at almost $2000 an ounce, silver is trading at a pitiful price of less than $50 an ounce.

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Tags: • minerals • price • demand • silver supplies • gold mines • silver mines • gold demand • gold and silver • price of gold • demand for gold •

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