500 gram silver Johnson Matthey bar.

Silver, regarded as the “poor man’s gold,” is a precious metal that, like gold, has been used as money for thousands of years. Historically, it has fluctuated in value relative to gold, though its price has been 15 times cheaper than gold by weight on average. This is due to the fact that silver is more abundant than gold on the Earth’s crust.

Like gold, silver is a monetary metal due to its unique properties, such as its rarity, durability, divisibility, and malleability. Because silver is more abundant and conductive than gold, it is widely used in industry, particularly for making electronic components. Silver has been used as money since ancient times, when silver coins, such as the denarius in Rome and drachm in Greeece, were used as a means of exchange. Because silver was more affordable than gold, it was more widely used as money than gold among the common people throughout much of history.

Much of the U.S. coinage in circulation up to 1964 was composed of silver. American dollars, half dollars, quarters, and dimes were made of 90 percent silver and 10 percent copper to add sturdiness to the coins. Since then, the U.S. Mint has switched to making coins primarily from copper, nickle, and zinc to reduce costs. However, due to investor and collector demand, the U.S. Mint has been producing Silver Eagles that contain a troy ounce of silver at 99.9 percent purity since 1986.

Because silver is scarce and a finite resource, as well as expensive to mine, it is regarded as a hedge to inflation similar to gold. What this means is that, as paper dollars are printed and lose value due to their increased supply, the value of silver rises relative to the dollar due to its more stable supply. Thus, during periods of high inflation or hyperinflation, silver allows investors to protect their wealth. In India, where precious metals have played an integral role in the culture for millennia, silver is bought as a store of wealth, so that when the rupee, the national currency, loses value, the rise in the value of silver offsets the devaluation of the rupee.

Because gold is over 70 times more valuable than silver by weight — this is referred to as the gold-to-silver ratio — whereas historically this has been about 15, some precious metals analysts believe silver in undervalued. Silver is a much more volatile asset than gold, allowing investors to make better gains than with gold during precious metals bull markets. However, this greater volatility means that silver investors will likely experience greater losses than gold investors during bear markets. Oftentimes, precious metals investors will invest in both for diversification.