Presently, the paper markets are much larger and more powerful than physical silver availability and they have neutralized the normal laws of supply and demand, says Douglas Kanarowski, Silver Advisor, California, US.

Gold is mined and accumulated. Silver is mined, consumed in micro amounts and then lost. Thus, the above ground stockpile of gold is growing while the above ground stockpile of silver is shrinking. Presently, there may be 10 times more gold than silver in above ground stocks. A ratio that is widening by the day.

Gold has very few meaningful industrial uses. Silver is perhaps the most versatile metal on the planet and it usually has no substitutes. As such, it is indispensable to modern civilizations. Because gold's price has been near or above its production cost for so long, there are hundreds of gold projects on the books. But, there are only a few of silver projects due to the lengthy period of prices below production costs.

Gold comes from gold mines but 70 to 80% of silver comes from by-product production: Copper, lead, zinc and gold mines. Therefore, higher silver prices will not result in a proportional increase in production. In general geologic terms, the deeper you go in a gold mine the richer the grade. The deeper you go in a silver mine, the weaker the grade. Therefore, most of the world's silver deposits are found near surface, have already been discovered and have been mined out.

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