There is less silver available today than there was 100 years ago as silver is consumed by industry . Silver is approaching an all time high vs the cost of gold it is 50 times more expensive than gold compared with a multiple of 30 in 1985 and roduction costs for silver when compared Gold is only 17 times as much.
So silver prices could be different if based on
The UK charges VAT on owning silver bullion. However there are some ways you can get around this problem. The best solution I have found is to get an investment depository from the Perth Mint. This is VAT free and give you liquidity and security (although not physical possession of the silver) . I think its your best bet if you want to diversify into silver in a safe tax effective way. (I reckon a 50/50 split cash silver would be good)
Silver VS Gold – In the last 5 years gold has increase from 500 to 1056 pounds whereas silver has increased from 20 to 30 pounds so comparatively gold has gone up more than silver.
Looking on a longer timeline to see the price ratios over time in US dollars
Look at the ratio of the price of gold versus silver gold:silver
Look at the cost of extraction
This is interesting. This shows a distortion in the market it suggests that gold is overpriced compared to silver
Ratio – Production 2700:255k = 1:94 (there is 94 times as much silver produced as gold)
This means that more silver is currently being mined than gold by a larger multiple than that of gold. This would cause downward pressure on the price. Why would silver production be so high compared to gold when the margins are lower? I would suggest that there is something distorting the market. It is either collusion with gold or silver manufacturers or something to do with the speed at which you can setup new gold mines versus silver to cope with demmand.
In this article they claim that because silver is used up in production processes there is actually less silver above ground than there was 100 years ago.