Silver has surged after decades of lagging behind gold, narrowing a historically wide silver/gold ratio. However, much of the “easy money” in that move may already be behind investors. Both metals still play distinct and complementary roles: gold remains the premier monetary safe-haven asset, while silver is increasingly driven by industrial demand and a thinner, more volatile market.
For over forty years, silver traded below its 1980 high and significantly underperformed gold, even as gold repeatedly reached new highs. In 2024–2025, silver finally began to “make up for lost time,” with prices advancing roughly 148% during that period and sharply closing part of the gap with gold. This catch-up reflects years in which the world consumed more silver than it produced, even while investor attention and central bank buying were overwhelmingly focused on gold. As silver re-priced, the silver/gold ratio compressed from extreme highs toward more historically normal levels, rewarding investors who entered when silver was deeply undervalued relative to gold.
The silver/gold ratio measures how many ounces of silver are required to buy one ounce of gold. As a bit of context, silver is about 8.5 times more abundant on Earth than gold. For most of the Roman Empire era, the ratio hovered near 12:1. The ratio widened around post-Renaissance Europe to about 14:1. Then in early U.S. history, the bimetallic standard of the Coinage Act of 1792 was established at 15:1.
The silver/gold ratio measures how many ounces of silver are required to buy one ounce of gold, and it has a long and revealing history. For much of recorded monetary history, the ratio hovered near 12:1 in the Roman era and around 14–15:1 through large parts of post-Renaissance Europe and early U.S. history, including the bimetallic standard of the Coinage Act of 1792.
That changed dramatically after the Coinage Act of 1873 effectively demonetized silver in the United States. In moments of crisis, the ratio has spiked to extremes as investors rushed into gold, which is typically viewed as the more established safe haven. Since Nixon moved the United States, and the dollar, from the gold standard in 1971, the ratio has averaged about 60:1.
Although both metals are often lumped together as “precious metals,” their underlying markets are very different. Several structural factors explain why silver tends to be more volatile and why its ratio to gold can swing so widely.
- Stocks vs. usage: Each year, humanity consumes silver at roughly four to five times the rate at which it consumes gold, when measured against above-ground stockpiles. This higher drawdown, combined with a much smaller overall market, makes silver a thinner, more volatile asset whose price can move sharply on marginal changes in supply or demand.
- Industrial vs. monetary demand: Silver today is more industrial than monetary, used heavily in electronics, solar panels, and other applications, while gold demand leans more monetary and investment oriented. In global crises such as World War II or the Covid shock, gold has typically benefited more from its identify as a secure financial asset, helping push the silver/gold ratio to unusually high levels.
- Supply dynamics: Gold mining responds more directly to price signals; with a rising gold price, exploration and production tend to increase over time. By contrast, most silver is produced as a byproduct of mining for other industrial metals, so silver supply is less responsive to its own price and more tied to broader industrial mining cycles.
- Demand dynamics: Basic economics suggests higher prices eventually ration demand, both for silver in industrial applications and for gold as an investment. A key open question is at what price levels manufacturers start redesigning processes to use less silver and at what gold price investors begin to pull back meaningfully, especially in emerging markets that buy smaller jewelry and coin units.
After years of underperformance, silver was effectively a “coiled spring,” and the recent surge represents that stored potential being released. The structural deficit in silver—persistent usage above production—combined with a powerful bull market in gold made a period of catch-up in the ratio increasingly likely, although the exact timing, as always in markets, was the hard part.
Looking ahead, several forces could shape the next phase:
• Central bank demand: Central banks and large institutions have shown voracious demand for gold, not silver, as they seek to diversify away from paper currencies and dollar reserves. That official-sector buying is likely to continue to favor gold over silver, putting a floor under gold demand and potentially supporting a higher gold price over time.
• Price-driven substitution: As gold becomes more expensive in dollar terms, some investors naturally migrate toward silver as the more affordable way to gain precious metals exposure. At the same time, industrial users have not yet shown major signs of reducing silver consumption, suggesting that both investment and industrial demand could remain supportive of silver if prices do not become prohibitively high.
• Speculation vs. fundamentals: While silver may still have room to gain relative to gold, much of the easy upside from extreme ratio levels appears to have already been realized. For investors, that argues for treating silver/gold ratio trades as tactical and speculative rather than the core of a long-term precious-metals allocation.
From the perspective of the Goldrush Yield Fund, the goal is not to bet directly on the ratio but to treat gold and silver as productive capital that can be lent out to businesses in return for a yield paid in metal. At present, the opportunity set is skewed toward gold, which is why the fund’s portfolio is roughly 90% gold and 10% silver, with the flexibility to adjust if market conditions change.
Gold leasing and lending are not new concepts, but the way they are implemented has evolved significantly. Historically, central banks engaged in opaque, loosely structured leasing programs that often resembled leveraged carry trades: gold was borrowed, sold, and the proceeds invested in higher-yielding assets, with the promise—but not always the reality—of eventually repurchasing and returning the gold. That older model carried substantial risks, including mismatches in duration, price exposure, and counterparty behavior, and the volume of such leases has shrunk as a long bull market in gold made these carry trades harder to unwind profitably. In some cases, institutions effectively practiced a form of fractional-reserve gold leasing, lending claims on the same metal to multiple counterparties, with obvious consequences if too many parties wanted their gold back at once.
In contrast, today there is a standardized, transparent marketplace for true gold and silver leases in which ownership of the metal remains with the lender, and terms are defined clearly. Private investors are now able to participate in this market through vehicles such as the Goldrush Yield Fund, whose manager has navigated this independent leasing and bond ecosystem over roughly a decade.
The Goldrush Yield Fund was launched on June 12, 2025, as a private fund managed by Andorra Capital, LLC, a registered investment advisor, and is offered under Regulation D 506(c) to accredited investors only. The fund uses NAV Fund Services as its transfer agent and administrator, CIBC as its banking partner, and Interactive Brokers as its broker, and it charges a 1.5% annual management fee with no performance fee.
The fund’s core purpose is straightforward: it owns physical gold and silver and deploys those metals into interest-bearing leases and bonds, generally with terms of one to five years. Management actively oversees both the gold/silver allocation and the mix of leases bonds, and the fund has the capacity and expertise to hedge risk where appropriate while benefiting from economies of scale and institutional-level deal flow.
The fund’s strategy is to “think in ounces rather than dollars,” using gold and silver as the base currency rather than treating them merely as static stores of value. Instead of simply holding bullion and hoping for price appreciation, the fund invests those ounces into real businesses in the precious metals ecosystem and earns interest denominated in metal.
• Leases: Leases are typically used with companies that hold gold or silver as inventory or work-in-progress, such as wholesale jewelers. In a lease, the fund effectively owns the inventory and assumes the price risk of the metal, while the lessee uses it in their operations; these off-balance-sheet arrangements usually pay between 2% and 5% per year in metal terms.
• Bonds: Metal-denominated bonds look more like conventional corporate bonds, except that both principal and interest are specified and repaid in ounces of gold rather than in dollars. Borrowers are generally companies that generate their own gold income—such as mining firms—and these on-balance-sheet instruments typically offer higher coupon rates, often in the 6% to 19% range in gold terms.
Because the underlying market for these leases and bonds has grown to an institutional scale, the fund can maintain a pipeline of potential deals and be at the forefront of new opportunities. The long-term objective is to deliver income and growth above the price performance of gold itself, net of fees, by combining active management with access to specialized financing structures in the precious metals sector.
From an investor’s standpoint, buying physical gold has historically been a way to move credit instruments (like bank deposits or bonds) into real money. The Goldrush Yield Fund attempts to go one step further: once that gold position is established, the fund aims to put those ounces to work in a professional, risk-managed strategy that seeks to generate ongoing metal-denominated income—even for qualified (IRA and Roth) accounts.
In sum, the recent compression in the silver/gold ratio underscores how dynamic the relationship between these two metals can be, driven by differing roles in the monetary and industrial systems. For qualified investors who already view gold and silver as core stores of value, strategies like the Goldrush Yield Fund present one way to transform static metal holdings into potentially income-producing capital—while also introducing a specialized set of risks that require careful, informed evaluation.
Regards and good investing,
Greyson Geiler