Why is Silver Cheaper Than Gold?

While both metals are valuable, the reasons behind the price gap go beyond simple supply and demand. In this post, we’ll break down the key factors that make silver cheaper than gold. From how they’re mined to how they’re perceived by communities the world over. This knowledge may provide insight into possible future silver price movements, presenting great trading opportunities

Comprehending how silver and gold compare in practical terms provides a sound foundation to grasping the value variance of the two metals. Afterall, it’s these key differences that drive much of their price gap.

A precious metal is a naturally occurring metallic element that holds high economic value due to a few key traits:

• Rarity: It’s not commonly found in the Earth’s crust.
• Durability: It resists corrosion and tarnishing.
• Utility: It has practical uses, from electronics to jewellery.
• Cultural and economic value: It’s been used historically for money, trade, and status.

Gold and silver both fit this definition, but their market value depends on how these traits play out in real-world applications.

This is a straightforward one. While both metals are precious, gold is far more so than silver. It’s significantly rarer in the Earth’s crust than silver, but it’s also mined in smaller quantities each year. This scarcity increases its perceived and actual value. Simply put: less supply often means higher prices. Gold has an abundance of 0.004 parts per million in the Earth’s crust, while silver is 19 times more common at 0.075 parts per million (68^th most abundant element). Want to know how much gold exists in the world? Read our report.

Silver is bulkier than gold when comparing equal Sterling values. It takes up more space, tarnishes over time, and is costlier to store and ship in large amounts. Gold’s compact, high-value nature makes it more efficient and attractive for investors who need to move or store wealth easily.

The storage fees we charge our customers reflects this difference with silver costing 50% more to vault and insure.

Gold has long been associated with luxury, royalty, and prestige. Its warm, rich colour and resistance to tarnish make it the metal of choice for fine jewellery and ceremonial objects.

Silver, while still beautiful, is seen as more accessible and practical — which plays into its lower status in terms of perceived value.

Not necessarily. While silver is cheaper than gold in terms of market price, “cheaper” doesn’t always mean “less valuable.” Value depends on context — and silver brings its own unique strengths to the table.

Silver is more affordable, which makes it accessible to everyday investors. It also plays a critical role in high-tech industries like solar energy, electronics, and medicine. Its industrial utility gives it practical value beyond investment.

It also provides far more financial divisibility than gold. For example, while a 1oz gold coin may be worth £2,500, a 1oz Silver coin would fetch around £30. That means that investors have far more flexibility to sell small parts of their holding with silver, providing more nuanced control over selling.

Moreover, many precious metals investors are fearful that traditional fiat currencies will not function or be of any value in the medium-term future. In this possible scenario, using gold or silver to barter for goods is the likely requirement to survive. It would therefore be more valuable to have silver tokens worth £30 each rather than gold versions worth more than 80- times that if all you want is some groceries!

Gold, on the other hand, is prized for its rarity, cultural significance, and status as a store of wealth — especially in uncertain economic times. In these kind of situations gold is invaluable as a safe haven asset, providing reassurance and peace of mind.  In this way, gold could be perceived as the ultimate form of insurance.

So while gold holds a higher price tag, silver’s versatility and wide range of uses make it an important and valuable metal in its own right. In short: silver isn’t “worse” — it’s just different.

Many market analysts perceive silver as being undervalued when compared to gold. The gold to silver price ratio can provide us with a benchmark to contrast the perceived cheapness of each metal. Historically this ratio has averaged around 47:1. In other words, silver has traditional been 47 times cheaper than gold over the past century. As of 2025, this ratio stands at over 100, suggesting that right now silver is very cheap indeed. Or perhaps gold is overpriced!?

When it comes to choosing between silver and gold, it really depends on your goals and priorities.

• If you’re looking for a long-term store of value with a strong track record in global finance, gold is often the go-to. Its price stability, rarity, and status as a safe-haven asset make it appealing to conservative investors and institutions alike.
• If you’re more interested in affordability, growth potential, or industrial relevance, silver has a lot to offer. It’s more volatile, which can mean higher risk — but also greater upside in certain market conditions. It’s also an easier entry point for new investors.

In many cases, a combination of both metals can provide a balanced, diversified approach to investing in precious metals. Gold offers security, while silver adds flexibility and industrial demand exposure.

Bottom line? Both metals have value — the best one for you depends on your strategy.

Is silver less valuable than gold?

Not necessarily — silver is cheaper, but it still has real value, especially in industrial uses. Gold is more expensive due to its rarity, demand as an investment, and long-standing role in global finance.

Why is gold considered a better investment than silver?

Gold is more stable, widely held by central banks, and trusted as a safe-haven asset. Silver can be more volatile, but that also means it might offer more growth potential in the right conditions.

Does silver’s industrial use affect its price?

Yes. Silver is used in electronics, solar panels, and more, which creates steady demand. However, because it’s produced in large quantities, industrial demand doesn’t push the price up as much as you might expect.

Why do central banks hold gold and not silver?

Gold is rarer, easier to store, and more historically significant in global economies. It’s been used to back currencies and stabilize economies for centuries — silver hasn’t played the same role at that level.

Could silver ever be worth more than gold?

It’s unlikely. Because gold is much rarer and more in demand as a financial asset, it typically maintains a higher price. However, silver can outperform gold during certain market cycles due to its volatility.