Understanding the Differences In Value of silver and gold

The precious metals market of which gold is part if is constantly fluctuating. There are a number of different metals that get traded everyday and the three most prominent seem to be gold, silver and platinum. We can discuss two metals that are easily accessible to anyone. Over the course of history, gold and silver prices have fluctuated a lot. The movement in value of one affects the other’s value. If you have a diverse portfolio that contains both metals you have probably found yourself asking which one you should sell and which one you should buy.

Although the value of both has decreased since 2011, there are differences between the two. Over the last couple of months the spot price of gold has hovered around $1,250 – $1,300 an ounce, while the spot price of silver has stayed around $15 an ounce. That is a huge difference, but why should we be comparing these two? Why does the price of one ounce of either metal vary as much as it does?

There is a commonly accepted belief that there is more silver above ground that there is gold. This is not true. Researchers speculate that there are 5 billion ounces of gold above ground and only 450 million ounces of silver. So clearly there is more gold than silver. According to supply and demand fundamentals the metal that is in high demand will cost more especially if there is a finite amount of it. Gold is the most sought after metal of the two. It is bought for various reasons in industry, in jewellery making and as a currency by centralized banks and governments.

Premiums and Fees

When selling gold or silver there are additional fee’s under the spot value that you have to pay, notable the premium under spot price value. Gold buyers would not be making money if they bought or sold gold at the exact spot price and this is the main reason why premiums are deducted.

Premiums for gold jewellery vary at around 10% –15% under the spot price. This is due to the gold buyer having to sell the jewellery to a refinery who is also charged fee’s as part of the refining process.

Volatility and Affordability

Reports from gold buyers Brisbane is that most people prefer selling their gold jewellery over silver because silver jewellery was not so popular to begin with and is not worth many peoples time to collect as gold is more expensive than silver people are more willing to make the journey to visit a gold buyer.

If you have gold jewellery to sell and you are wondering if this is the best time to approach gold buyers Brisbane, there is no easy answer. At the moment gold prices are sky high thanks to global debt and bankrupt governments. The gold/silver ratio has expanded significantly over the last couple of months coming in at 89-1. This means you would need 89 times the weight in silver to buy an ounce of gold. Gold has been rather lethargic, taking its time to move from $1,240 with its lowest resistance set at $1,290. Unless something major happens, gold will be stuck in limbo between $1,200 and $1,300.