Both gold and silver are credited as being investment options with long histories. However, whether you should invest in either largely depends on what your investment goals are and what your temperament is as an investor.
Today, we’ll look at some of the key differences between gold and silver as investments and why they may or may not be right for you. Note that this article should not be considered financial advice. If you’re considering investing in precious metals, always be sure to do your own research, know the risks, or consult a certified financial advisor.
Key Things to Know About Gold and Silver as Investments
Both gold and silver have been looked at as hedges against inflation and as stores of value over time. However, like any investment, neither comes without risks. Despite their reputations, it’s important to consider several key factors if you’re thinking of diversifying your portfolio with precious metals.
At the time of this writing, silver is a more affordable asset than gold. This is largely due to how plentiful it is in comparison to gold. It’s estimated that silver is around 19 times more abundant beneath the earth’s crust. The output of silver mines around the world is also 8 times greater than gold mines. Many cash-conscious investors beginning to build their portfolios often consider silver to be an appealing entry point.
Economic Connectivity and Volatility
Compared to gold, silver has far more industrial uses across the global economy. Aside from coinage and jewelry, it’s used in everything from medical implant devices and x-ray technology to smartphones and solar panels. Due to silver’s connection to so many industries, it makes it a much more volatile asset to invest in when weighed against gold.
Many investors looking for assets as stores of value often choose gold as a safer long-term investment as it doesn’t correlate as directly with the economy. When economic times are bad, investors often flock to gold. When the global market is trending positively, silver often sees a positive correlation. While both gold and silver are ideal for diversifying portfolios, gold is the stronger choice in this regard.
Gold and Silver are Liquid Assets
Both gold and silver are highly liquid assets. This means that there are consistently a vast number of buyers and sellers willing to trade for gold and silver. Whether investors are looking to buy or sell gold and silver in the form bullion, through ETFs (Exchange Traded Funds), or via shares of mining companies, there is a very active market for these precious metals.
Between the two, it’s estimated that gold is roughly 6-times more liquid than silver, often making it a more attractive asset for investors who are more active traders.
Sell Your Gold or Silver Today
If you’re still on the fence about investing in gold or silver but have precious metals you may be interested in selling, contact us today. You can ship your lot to Manhattan Gold & Silver. We can assay, weigh, and pay you for gold and silver items at a fair price based on the current London market fixing.