How to Value Gold and Silver:

A Simple Guide for Smart Investors

1️⃣ How to Value Gold

Gold has always been the ultimate store of value. Its price is often compared to the global money supply, since gold serves as a hedge against currency devaluation.

Step-by-Step Valuation:

1. Total Mined Gold:The total above-ground gold ever mined is about 218,065 tonnes, which equals 7.01 billion troy ounces.

2. US Money Supply (M2):The US M2 money supply stands around $22,195 billion.

   • Dividing this by total mined gold gives a value of roughly $3,166 per troy ounce.

3. European Money Supply (additional factor):Taking 50% of the US M2 as Europe’s contribution adds $9,243 billion, giving a value of $1,318 per troy ounce.

4. Final Value of Gold:Adding both gives an estimated value of $4,484 per troy ounce.

5. Estimated Price Range for Gold:The realistic price range for gold comes out between $3,166 and $4,484, with a midpoint of $3,825.

✅ Conclusion: Based on global liquidity, gold appears fairly valued in the $3,000–$4,500 range, suggesting it remains an attractive hedge against inflation and currency risk.

2️⃣ How to Value Silver

Silver, often called the “poor man’s gold,” has both monetary and industrial value. Its price historically correlates with gold through the Gold-Silver Ratio (GSR) — how many ounces of silver equal one ounce of gold.

Historical Gold-to-Silver Ratios:

• Roman Empire: 12:1

• Medieval Europe: 9.4:1

• US Coinage Act (1792): 15:1

• After Gold Standard Ended: 97.5:1

• 21st Century Average: 69:1

• Current (2025): 85:1

This means silver is currently undervalued compared to historical standards.

Derived Silver Value:

Assuming a more balanced ratio of 60:1 and using the midpoint gold value of $3,825, we get:

Silver=382560≈$64perounceSilver = \frac{3825}{60} ≈ \$64 per ounceSilver=603825​≈$64perounce

Expected Range: $53 to $75 per ounce

Midpoint: $64

✅ Conclusion: If the gold-silver ratio normalizes toward historical levels, silver has potential upside from its current price levels.

3️⃣ Key Takeaways for Investors

• Gold acts as a monetary hedge, reflecting global money supply expansion.

• Silver offers higher growth potential, given its undervaluation and industrial demand.

• Diversifying in both helps balance portfolio risk — gold for stability, silver for opportunity.

4️⃣ Final Thoughts

Valuing gold and silver isn’t just about price charts — it’s about understanding global money, history, and ratios that drive long-term trends. At VS Fintech, we simplify investing with expert-curated portfolios and insights like these, empowering you to invest smarter, not harder.