Gold and silver are two of the most traded precious metals in the world, and in the financial markets they are valued on a per troy ounce basis. One troy ounce (abbreviated oz) is equal to around 31.1 grams (g) on the metric scale.
However, it is obvious that both gold and silver are not the same, which every science student could tell you that they are different elements in the first place, with similarities and differences in physical and chemical properties with and from each other. In this post I shall share with you the three distinct things between them: size, amount and price.
Picture generated by Meta AI
Size
If you had ever seen an ounce of gold and an ounce of silver together, you may have noticed that silver looked larger than its gold counterpart. This is because of a characteristic called density.
Density is defined as the amount of mass within a given volume, and its unit of measurement is grams per cubic centimetre, or g/cm3. Silver’s density is 10.49 g/cm3, while gold’s density is 19.3 g/cm3. Thus, with a given mass of one ounce, the volume for silver for that ounce is 2.96 cm3 (31.1/10.49) while gold is 1.61 cm3(31.1/19.3).
However, if you are observant enough, the dimensions of the various minted and cast bars and coins do not equate to the volume given above, and it is slightly higher (e.g., the Perth Mint’s 1 oz gold cast bar measures 1.9 cm x 1.9 cm x 0.5 cm = 1.805 cm3). One reason for this occurrence is due to the surface irregularities caused by imprints, grooves, cavities, blisters, etc. that may increase its volume. Another reason is that the dimensions taken represents the approximate measurements and do not consider the minute variations mentioned in the previous reason.
The bottom line is that regardless of the volume discrepancies, the mass (or weight in layman speak) and purity are the more important factors in determining the metals’ value (and price).
Amount
According to the United States Geological Survey (USGS) website1, around 244,000 metric tons of gold and 1,740,000 metric tons of silver have been discovered to date. While there may be undiscovered amount of gold and silver lying somewhere under the planet’s surface, not all could be mined because of accessibility (depth, lack of technological means, etc.). Still, this currently proved that gold is rarer than silver in terms of their amount on Earth.
Price
While the gold-silver density ratio is 1:1.84, and the gold-silver discovered amount ratio is 1:7.13, the same cannot be said for the price. Unlike density, which is fixed, and amount in the world, which is roughly around there for quite a while, the price or mint ratio, known to investors/traders as the gold-silver ratio (GSR), is fluctuating over the course of 30 years, ranging from a high of around 1:126 or so in 2019, to a low of about 1:31 back in 20112.
The GSR is used as a gauge for overweighting/underweighting on gold and silver, and the “magic number” to trigger the rotation is dependent on individual’s preferences. The popular guideline around is the “80/50 Rule” that states:
- When the GSR is above 80, switch from gold to silver.
- When the GSR is below 50, switch from silver to gold.
If one followed the 80/50 Rule to the “T”, he/she would not have had a chance to buy gold because it had never fall below 50 since around mid-2012 onwards, though he/she could have had many chances of buying silver (now is a good period, too, since it is around 89).
It is still possible to invest in both gold and silver using their individual merits without looking at their interrelating GSR, like price levels which dictates their demand and supply. In terms of usage silver has more industrial uses than gold, especially the former’s use in the growing solar energy sector.
Conclusion
Now that you have a better understanding of the two precious metals, you may be interested in reading up more on them in The Bedokian Portfolio eBook (under Chapter 5: Commodities), as well as some posts which I will include them in the Related Posts section below.
Disclosure
The Bedokian is vested in physical gold and silver, and the iShares Silver Trust ETF (SLV).
Related Posts
1 – United States Geological Survey. https://www.usgs.gov/science/faqs/minerals (accessed 10 Mar 2025)
2 – Gold/Silver Ratio. Goldprice.org. https://goldprice.org/gold-silver-ratio.html (accessed 15 Mar 2025)
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