"But gold will always have a special place since its use in jewelry and for its artistic appeal."
And... no jewellery is made of silver? One can make the argument that either metal is better for jewellery manufacturing, and it depends on a lot of things which I won't go into, but the bottom line is that it all comes down to price, always. The typical jewellery customer is very demanding and unforgiving because of the amount of money on the table and the skepticism due to ignorance. If the public wants to pay less, they always have options, and those options get debased the less money they want to spend. Obviously a jeweler isn't going to GIVE AWAY his/her precious and scarce work materials just to make a single sale. If your work is undervalued then so is your reputation as a jeweller, and I think that applies to most trades.
I used to say that gold is money, but not anymore. Why: because gold is not currency. It assumes that position because of everything intrinsic to gold (the rarity, the way that people value it, etc). Mostly, gold is valued so high because there are relics and priceless objects that people do not want to melt because of historical significance, therefore that gold never sees the market for hundreds if not thousands of years. King Tut, death masks, Celtic pieces, Roman pieces, Etruscan pieces, et cetera, and scepters, crowns, millions of rings, necklaces, et cetera, that people value because it belonged to their great-whoever.
Why fret over the ratio at all? Both metals have zero monetary function. Try spending silver or gold even today, you just can't. Those historical ratios were based on conquests and supply. There's no return to those fixed ratios.
And I hope you weren't comparing the PRICE of two commodities to the HEALTH BENEFITS of others. That metric does not work. Nobody is hoarding/buying/selling/trading absorbic acid in the fear that oranges will go extinct or something, come on. That ratio is advertised on kitco to spike demand for silver, nothing else.
"Silver is almost essential to many real life applications and that says it is undervalued ! Gold is simply gold ; it has real world applications on planet Earth but could sort of get along without it . . ."
So if one can compare a cart of groceries (needed to live but affordable) to a pair of famous basketball shoes (can do without it and super pricy)... Do you think groceries ought to cost more and pricy running shoes should be a dime a dozen? Which of the two do you see people lining up for blocks? During good times, the shoes, and during bad times, the food market. I see your point but it's wrong. Some industries get bullied by the masses and get beat down in price over the bottom line, or these products are just so abundant that it's actually better for business to sell them in bulk.
But you're right, there's no sensical reason for us to still measure that obsolete ratio.
Edited by Libertad
03/25/2020 5:35 pm