Why is silver so much cheaper than gold?

It’s a question that pops up all the time among new and seasoned stackers alike — why does silver cost so much less than gold when both are considered precious metals and safe-haven assets?

While the price gap might seem huge, it’s not about one being "better" than the other — it’s about how they’re used, how rare they are, and how the market views them.

Gold is far rarer than silver. It’s more expensive to extract, more tightly held by central banks, and mostly used as a financial reserve. That rarity and perceived stability mean gold holds a premium.

Silver, on the other hand, is more abundant and plays a huge role in the industrial world. It’s in our solar panels, electronics, electric vehicles, and even medical devices. This means silver’s price tends to track with economic activity — it rises when industry booms, and dips when things slow down.

But this volatility is exactly why many stackers see silver as undervalued. When you look at the gold-to-silver ratio — coming out the ground at around 12:1, historically valued around 50:1 but now often above 100:1 in recent years — silver looks like it has far more room to run.

Then there's the issue of tax. In the UK, gold bullion is VAT-free and even CGT-exempt if you’re stacking Britannias or Sovereigns. Silver gets slapped with VAT, which can make the upfront cost less attractive. Still, for long-term holders, the potential upside can outweigh those early disadvantages.

The way I see it, silver isn’t “cheap” — it’s incredibly undervalued. And if history repeats itself, it’s got some serious catching up to do.

40+yr old, trying to shift a few pounds and sharing his efforsts on the blockchain. Come find me on STRAVA or actifit, and we can keep each other motivated .

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