A: Gold and silver are considered precious because they are extremely rare in nature, and very attractive when made into jewelry or money. Gold and silver can be found as pure metal not bonded with other elements, and they are malleable and ductile, unlike most other metals. Because of these unique characteristics, they have been used for jewelry and as a store of value and a hedge against human and financial strife throughout history. In fact, gold and silver are the only hard asset you can put in your pocket and walk away from human strife, or into a vault to safeguard your wealth from monetary inflation. As such, they are natural “collectibles”.

Gold is the rarer of the two metals and historically has been used primarily as money with only minor industrial applications. Silver is 19x more abundant than gold in the earth’s crust and is the best natural reflector and conductor of electricity and heat on the planet. Therefore, even though it has a profound history as money, over the past century silver has evolved many new and strategic industrial uses that effectively consume most newly mined silver. On the other hand, an estimated 98% of all gold mined throughout history is still held above ground in the form of coins, bars, jewelry and artifacts. That means gold is ironically 5-7x more abundant above ground than silver.

Because of silver’s many industrial uses, investors typically go to gold first and silver second in any monetary cycle, that is why the silver price tends to lag behind gold, then play catch up in a hurry. The silver market is much smaller by value than the gold market, and much more volatile because most above ground silver is held for fabrication not investment. When investors come calling for silver, there is none so the price has to rise due to insufficient supply and excess demand. That is why silver typically outperforms gold in every bull market for the precious metals.