For nearly 5,000 years, the price ratio between gold and silver has averaged approximately 15:1. This number is very close to the 17:1 ratio which represents the natural occurrence of the two elements in the Earth's crust. It is interesting to note, however, that through most of history the price ratio has favored silver.
In the last century, that ratio has rapidly, if unevenly risen. As of this moment, the gold:silver price ratio is once again nearing 70:1. Given the historical data, the natural assumption to make is that the world must be practically overflowing with silver for the price ratio to have gotten this skewed. In fact, this couldn't be further from the truth.
In the modern era of silver production, annual mine production now amounts to more than 600 million ounces per year. However, while industrial and investment demand for silver are soaring, production is leveling off. Annual production in 2008 only increased by roughly 2%, despite the price of silver reaching its highest level in nearly thirty years.
