Silver realities · The Gold-Silver Ratio
If You Hold Both, Which Should You Pledge?
A question we get often from people holding both, and the honest answer has nothing to do with predicting the ratio.
Tell us the form as well as the quantity. With silver, form changes the number more than people expect.
65%
Advance against market value
$15k
Minimum loan — a lot of silver at current prices
Sealed
Monster boxes verify by seal, which saves you money
Same
The same boxes and bars come back
This is not a market call
It is tempting to treat the choice as a view on which metal will do better. We have no idea, and neither does anyone else. The useful basis for the decision is practical: which is cheaper to handle, which gives more headroom before a call, and which you are more likely to want to sell during the term.
The practical basis
- Gold gives more headroom before a margin call, being less volatile.
- Gold is far cheaper to ship, verify and store.
- Pledge what you are least likely to want to sell during the term.
- Silver in sealed form is much cheaper to handle than loose.
- If the quantities are marginal, gold usually wins on cost alone.
How we handle it
- 01Discuss both if you hold both, rather than pushing one.
- 02Be explicit about the headroom difference.
- 03Include handling and freight in the comparison honestly.
- 04Take no view on where either price is going.
We will not tell you which metal to hold or where prices are heading. We buy and lend against metal; we are not analysts and anyone in this industry offering you a price forecast alongside a financial product deserves scepticism.
FAQ
Common questions
- Which should I pledge?
- Practically, usually gold — more headroom and far cheaper to handle. Not because of any market view.
- Do you have a view on the ratio?
- No, and be skeptical of anyone selling you a financial product who does.
- Can I pledge both?
- Yes, and mixed collateral is common.
- Does the ratio affect my advance?
- Only through each metal's own market price. The advance rate is the same.
What you hold
Sealed Monster Boxes
A sealed mint box of 500 coins is the easiest silver there is to handle. The seal is intact, the count is known, and verification takes minutes rather than hours.
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Silver Bars
Bars are the most storage-efficient form of silver, and the larger the bar the better the economics — right up until you want to sell part of it.
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Rounds & Generic Silver
Privately minted rounds are pure metal exposure with no sovereign premium, which makes them straightforward collateral and slightly less liquid at sale.
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Junk Silver & 90% Coin
Pre-1965 US 90% coin is genuine silver collateral and the most labor-intensive form of it. It arrives loose, it has to be weighed, and worn coins contain less silver than new ones.
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Sterling & Flatware
Sterling flatware and hollowware are real silver, and the two complications are weighted handles and the fact that some sets are worth more than melt.
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Dealer Silver Inventory
Dealers holding silver have a particular version of this problem: the stock is bulky, it moves slowly, and it ties up capital in a form that is expensive to liquidate quickly.
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More silver realities
Volatility & Margin Calls
Silver moves more than gold. The same 65% advance therefore has less room before the loan-to-value goes out of range.
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Bulk & Freight
The same value in silver occupies roughly seventy times the volume of gold. Everything downstream of that — freight, handling, storage — follows from it.
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Storage Economics
Storage is priced on space and handling rather than on worth, which is why silver storage costs more per dollar stored than gold does.
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Next step
Run it both ways before you decide.
No credit check and no obligation. Tell us what you hold and what the money is for, and if selling is the better answer for your situation you will be told that first.
Business purpose only. Not available in Nevada, Vermont, North Dakota and South Dakota.