However, not as many know that silver did even better! Silver was up 47.4% in 2020, rising from $17.80 per ounce on January 2, 2020, to $26.35 per ounce on December 31, 2020.

Silver didn't just outperform gold in 2020; it also outperformed every other major asset class, including U.S. small cap stocks (up 18.5%), U.S. stocks (up 15.5%), U.S. corporate bonds (up 9.7%) and U.S. Treasuries (up 3.6%). Many other asset classes declined in price in 2020, including commodities, the U.S. dollar, real estate and crude oil.

Silver backed off a little in early 2021 (it's now trading around $25.25 per ounce), but it has held onto almost all of its 2020 gains. Of course, the question for investors is: Where do we go from here?

Your correspondent with a pallet of 1,000 ounce (about 62.5 pounds) silver ingots in a vault in Switzerland. The walls of the vault are draped with brown paper in order to avoid revealing security details or possible clues to the location. The silver is pure bullion: 99.99% silver. The date the bar was poured, serial number, purity and name of the refiner are all clearly shown stamped on the ingots. At current market prices, one of the silver ingots is worth $25,000. By way of contrast, the small gold bar (seen in the photo near my left hand) is worth about $65,000.

For reasons explained below, investors should expect continued strong outperformance by silver both in bullion form and in the form of shares in well-run silver mining companies.

Before turning to the fundamentals that will send silver prices higher, it's useful to clear away some of the fog and outright myths surrounding the role of silver in the monetary system and the relationship between the price of silver and the price of gold.