Recycling Gold & Silver v GSR

With the gold:silver ratio at 67 at present it is worth another look at how seemingly out of whack this is on fundamentals.  In our Why Buy Bullion brochure we talk about silver mine supply of approximately 27,000 tonne compared to gold’s approximately 3,000 tonne, a ratio of 9 to 1.  Certainly not 67 to 1….

SRSrocco produced the following charts which neatly illustrate the other anomaly, and that is recycling.  As we’ve reported before, at these low prices recycling has bottomed out over the last few years.  With silver seeing a lower low, it has been worse.

Firstly looking at jewellery demand and recycling rates, with the price of silver you can see there is little incentive to recycle..

And as we often point out, about half of all silver mined is used in industry, most of that in the likes of solar panels, electronics and medical that are largely used and discarded.  The following charts confirm that is largely the case with a measly 18% recovered.  Gold on the other hand nowadays has essentially no industrial demand which is why many argue it is not a ‘commodity’ where, other than jewellery, it’s uses are purely monetary.

So to sum it all up, the following charts show the total picture, reinforcing the anomaly that a gold silver ration of 67:1 is…. for now…