Do you invest in gold or silver? Are there actually much difference between both besides the price? Characteristics of gold and silver are same including finite, divisible, tangible, portable and highly liquid. These rear precious metals are found in the earth’s crust. When you plan to invest in one of these metals then know the crucial differences because it can supercharge or downgrade your portfolio.
Differences between gold and silver
Silver rates are more volatile
Annual supply of gold is 120 million ounces but that of silver is nearly 1 billion ounces. So silver market is 8X larger than gold. This huge difference can be noticed in its prices. Low price of silver makes annual gold supply’s value 9X bigger [at current prices].
Investors need to be mentally prepared for high volatility in silver prices. Silver coins for sale at discounted prices can be tempting and if it is bough in bull market then high volatility means performance will be better than gold in forthcoming bull market. Silver even sells faster than gold but be nimble in selling during high volatility conditions.
Silver is more within your means
Physical gold and silver are tangible assets, which no one can hack. According to history, silver is used as coinage more frequently than gold. Physical silver offers privacy or confidentiality, if needed. The advantage silver has over gold is that you can trap same benefits at more affordable costs. Therefore silver is popular as ‘Poor man’s gold’. You can buy and sell silver in small denominations anytime to meet financial needs. Gifting silver is affordable and ideal. Even investors with small budget can buy gold.
Silver needs more storage space
Silver is affordable but the catch is, it takes plenty of space for storage than gold. Density of silver is less than gold. Pure silver’s volume is 84% larger than pure gold. At current rates, same dollar investment gets approximately 70 ounces more of silver in comparison. Combining both facts means silver takes 128 times extra space for same dollar value. Transporting physical silver to professional storages is expensive and cumbersome. Ultimately silver tarnishes but pure gold doesn’t. Therefore you need to store silver bars and coins in dry places, which is not a concern with gold.
Silver has high industrial use
Silver demand for industrial use is high in strong economy condition but weak in recession. Unlike gold, majority of industrial silver gets consumed or is thrown away. Thus silver is gone and cannot be replace in the market via recycling. New supply to meet demands must persist, even during deflation. Initially, during deflation depression silver may possibly not do well but soon central banks and government possibly introduce high inflationary policies, so as to keep economy floating. These policies can serve as launching cushion for silver investors because of its safe haven status.
Should you invest in silver or gold or both? Both are worthy. Each offers some distinctive advantage over the other, choose accordingly!