Why gold is more expensive that silver?

There are a few key reasons why gold trades at a higher price per ounce compared to silver:

• Rarity – Gold is significantly rarer than silver in the Earth’s crust. The limited global supply of mineable gold ensures its preciousness. There are over 19 times more recoverable silver reserves worldwide.
• Demand – The demand for gold across industries like jewelry, investments, and electronics exceeds demand for silver. India and China alone account for over 50% of annual global gold demand.
• Cultural significance – Gold has maintained financial and cultural value for thousands of years. It is deeply embedded in human psychology as a representation of wealth. Silver has not achieved the same status.
• Utility – Gold has unique properties like corrosion resistance, malleability, and conductivity that make it difficult to substitute across certain applications. This entrenches demand.
• Investment role – Gold is held by central banks, institutional investors, and private holders as a store of value. It has no counterparty risk. Silver is more vulnerable to industrial cycles and speculative trading.
• Higher purity – Gold is traded in 99.99% pure forms versus ~99.9% for silver. This purity commands a premium.
• Inflation hedge – Investors view gold as the superior hedge against inflation long term. This imparts an inherent value that silver does not have to the same degree.

The higher rarity, cultural significance, and utility of gold ensure it commands a substantial price premium over silver in dollar terms. While silver has its own advantages, gold’s supreme role as a reliable store of value underpins its higher worth per ounce.