What should silver actually cost? Building the gold-to-silver ratio from scratch

As of early July 2026, a snapshot: gold is about $4,066 an ounce, silver is about $60, and the gold-to-silver ratio, the number of silver ounces it takes to buy one ounce of gold, sits near 67 to 1 (our own price data, The Vault Report). Everyone quotes that ratio. Almost no one asks what it should be. So pretend we know nothing, and build silver's fair price up from the ground, one sourced fact at a time.

If more silver is mined, why isn't it just cheaper?

The simplest possible model: whatever is more abundant should cost less. Every year the world mines a lot more silver than gold. In the latest full year of data, 2024, mines produced about 3,300 tonnes of gold and about 25,000 tonnes of silver (USGS Mineral Commodity Summaries 2025). Round it and you hear the usual line, roughly 8 to 10 times more silver than gold comes out of the ground. The exact figure is 7.6 to 1 by weight.

Run that naively. If silver were priced purely off how much gets mined, one ounce of gold at $4,066 divided by 7.6 gives a silver price of about $535 an ounce. Use the rounder "10 to 1" and you still land at about $407. Either way the punchline is the same: on mine supply alone, silver at $60 looks seven to nine times too cheap. So why isn't it? The naive model is missing almost everything that actually sets a price. Add the missing pieces one at a time.

How much silver actually gets used up?

The first missing piece is what each metal is for. Silver is largely consumed by industry. Gold is largely hoarded. In 2024 total silver demand was about 1.16 billion ounces, and industrial demand alone was a record 680.5 million ounces, about 59 percent of all silver demand, of which solar panels took roughly 232 million ounces, about 19 percent of the whole market (The Silver Institute, World Silver Survey 2025). Most of that silver is soldered into a device, wired into a panel, or plated onto a contact, then dispersed in tiny amounts too small to ever recover economically.

Gold does the opposite. Technology and industry used just 326 tonnes of gold in 2024, about 6.6 percent of demand. The other roughly 93 percent went to jewelry, investment, and central banks (World Gold Council, Gold Demand Trends 2024). Plainly: most silver gets used up and scattered into electronics, while most gold just moves between vaults and stays whole. That single difference is what turns the naive model on its head, which is the next step.

Is there really less investable silver than gold?

Price is set by all the metal that is actually available to own, the stock, not by one year's mining alone. And here the numbers invert. Because gold is hoarded, nearly every ounce ever mined still exists: about 216,265 tonnes sit above ground (World Gold Council), which is about 6.95 billion troy ounces, almost all of it still in bars, coins, and jewelry. Because silver is consumed, the identifiable investable bullion, the bars and coins you could actually buy, is only about 1.5 to 2.5 billion ounces (CPM Group and The Silver Institute).

Read those two figures side by side. By investable ounces there is roughly three to four times more gold than silver sitting in a form you can buy. That is the inversion: by annual mining, silver is about 7.6 times more abundant than gold, but by the stock you can actually get your hands on, gold is the more plentiful one. On pure scarcity, silver has no business trading at a 67 to 1 discount.

The pile is also shrinking. Silver has run a structural physical deficit, meaning the world uses more than it mines, for five years straight, 2021 through 2025. The 2024 deficit alone was 148.9 million ounces, and the cumulative shortfall across 2021 through 2025 is about 820 million ounces (The Silver Institute). Each year the gap is covered by drawing down that already-small bullion pile. Gold has no comparable structural deficit. So the small stock is getting smaller, which only sharpens the puzzle: with less investable silver than gold and a five-year draw on top, why is it still the cheap one?

Why can't silver miners just dig up more?

Most silver is not mined for silver. About 72 percent of it comes out of the ground as a byproduct of digging for other metals, copper, lead, zinc, and gold. Only about 28 percent comes from mines that primarily chase silver (The Silver Institute and Metals Focus, World Silver Survey 2025). In 2024 the single biggest source was lead and zinc mines, about 29 percent of all mined silver; gold mines added about 16 percent, copper mines much of the rest, and dedicated silver mines about 28 percent.

That is why silver's supply barely reacts to silver's price. When silver rises, the miner pulling it out of a copper or zinc pit does not decide anything based on silver. The choice to run that mine is driven by copper or zinc economics, so a higher silver price does not quickly bring more silver. And it cuts the other way. If a recession knocks down demand for copper and zinc, those mines slow, and silver supply falls with them even when silver demand is strong. Silver's supply is effectively hostage to the cycles of metals it has nothing to do with.

This is the supply side of the five-year deficit above. The shortfall is hard to close by simply mining more, because most silver miners are not really silver miners, they answer to base-metal cycles. That is a structural fact about how the metal reaches the surface, not a forecast. We are not saying supply will fail to catch up, or that the deficit must persist. The point is narrower: the usual fix, where a higher price pulls out more supply, works weakly for a metal that mostly arrives as someone else's byproduct.

What is the gold-to-silver ratio, and what should it be?

The gold-to-silver ratio is simply the gold price divided by the silver price, the silver ounces per gold ounce, and today it is about 67 to 1. The reason it stays that wide, despite everything above, is the one factor the physical numbers leave out: gold carries a monetary premium that silver does not. Central banks bought 1,045 tonnes of gold in 2024, about 21 percent of all gold demand and the third straight year above 1,000 tonnes (World Gold Council). There is no central-bank bid for silver at all. Gold is priced partly as money; silver is priced mostly as an industrial input. That role, not physical supply, is what holds the ratio near 67 to 1.

So what would the ratio be on physical fundamentals alone? Two honest bookends. The tight end is the mine-supply ratio of 7.6 to 1, which at $4,066 gold implies a silver price of about $535. The loose end is the metals' abundance in the Earth's crust, about 17 to 1, which implies about $239 (the crust ratio is geological abundance, a reference bookend, not a price target). Put together, the physical-fair range is roughly $240 to $535 an ounce, against today's $60. The whole "show the math" walk sits in one ledger:

Building silver's physical-fair price step by step, from mine supply to today's price.

Step	What it adds	Implied silver
Mine supply, 7.6:1	7.6x more silver mined than gold, at $4,066 gold	~$535
Crust abundance, 17:1	Geological bookend, not a price target	~$239
Investable stock	Gold 3 to 4x more plentiful to buy; argues silver scarcer, not cheaper	tighter still
Structural deficit	~820M oz drawn down, 2021 to 2025; the pile shrinks	tighter still
Byproduct supply	~72% of silver is a byproduct; output tracks base metals, not silver's price	tighter still
Gold's monetary premium	Central banks +1,045t in 2024; no silver bid. This is the discount.	pulls price down
Today, actual	Silver $60, a 67:1 ratio	$60

Read the ledger as one honest sentence: this is what the physical ratios would imply if silver were priced on them the way gold is. It is an illustrative thought experiment, not a forecast. We are not predicting that silver will rise, not claiming a shortage is coming, and not telling anyone to buy anything. The gap between $60 and the physical-fair range simply is gold's monetary premium, the market's pricing of gold partly as money and silver mostly as an industrial metal. Whether that gap ever narrows is an open question, and we will leave it open.

Our bias, for the record: we would rather build a number from its parts than repeat a ratio. Start from mine supply and silver looks absurdly cheap; add the stock, the deficit, and gold's monetary premium and the picture resolves into something coherent. The ratio is not a mystery once you can see every piece that goes into it. Someone has to lay the pieces out in order, and it may as well be the people who already enjoy a good spreadsheet.