• To examine the history of gold and silver as a currency and the evolution of their store of value with the aim to determine their investment potential.

SILVER

Currency

• Silver was used as a currency since Ancient times due to its greater abundance than Gold.
• The first ever Silver coin was made in Lydia, present-day Turkey, in 564 BC as an alloy of Gold and Silver. The coin was named the Lydian Trite.
• Ancient Greece, mainly Athens, Egypt and Rome also made Silver coins.
• However, Silver was officially recognized as a currency in 1789 by the US government when the US dollar was specifically measured in silver.
• The silver coinage was, however, abandoned in 1965 due to its increasing price.

Store of Value

• Ancient civilizations mainly used silver to make jewelry, tableware, figurines, ritual objects and rough-cut pieces known as hacksilver, which could be used in trade or to store wealth.
• In Egypt, Silver was much more precious than Gold because of its rarity in the region. As such, it was commonly used in their rituals.
• Throughout history, the balance between gold and silver has steadily increased, to reach almost a 100 to 1 in 1941.

GOLD

Currency

• Gold treasures have been found dating back to as early as 4000 BC, which implied that Gold was a precious but common commodity back in Ancient times.
• In fact, it has been proven that the ancient Egyptians officially considered gold a currency 3,500 years ago. 
• It was not until 1,500 BCE that Gold was recognized as an exchange standard for international trade.
• The Ancient Romans and the Venetians are the other two notable civilizations that would establish gold currencies that would last throughout the years.
• The Romans would establish the golden aureus coin in 50 BCE while the Venetians would create the golden ducat that would continue to be the currency of choice until the early 1800s
• In 1789, the US government officially linked the US dollar to gold silver, with the introduction of the Coinage Act. 

Store of Value

• The earliest gold-to-silver ration is from 3200 BCE, when gold was valued 2.5 times more precious than silver.
• Throughout time, however, the value steadily stabilized at around 10-13 times the value of silver, which kept steady until the Industrial Revolution, when the ratio increased exponentially due to the decrease in abundance of the precious metal.
• Gold was a tool that was used to separate the different classes in society throughout history.