How to Choose Between Gold and Silver: Key Factors to Consider

Gold and silver are two of the most widely investable commodities in precious metals. Both have been used like this for hundreds of years as a store of value, and an inflation hedge. However, if you are a beginner investor, making the right decision between gold vs. silver can be tough. However, the final decision must also be based on financial goals, risk tolerances, and market conditions. So what are the important variables that you need to think about when selecting between gold and silver?

Understand How Market Dynamics is Working

Both of these metals are traded in the global market. Their roles are different and it is vital to know how each metal pans out when faced with economic conditions.

• Gold

Gold is popularly known to be a “safe haven” asset. It usually does better than other asset classes when the economy is uncertain, like during recessions and financial crises. In terms of price, gold market trends have the trends which are quite stable in comparison to silver. It has the store of value which is retaining its purchasing power in the longer run.

• Silver

In contrast, silver is nearly twice as volatile as gold. Part of the reason for this is that there are industrial uses for silver (in electronics, solar panels, medical devices, and more) which influence the price you pay. Silver generally experiences higher demand during an economic upswing, which can support prices. During economic downturns, silver prices tend to change more significantly than gold.

Pricing and Affordability

One of the most obvious differences between gold vs silver investment is the price per ounce. Gold is costly in comparison to the silver, which makes it harder to accumulate in view with the large numbers.

• Gold

In recent years, the cost of gold is well over $1,800 per ounce — and sometimes above $2,000. That means with the same amount of investing, you can buy less gold than silver in terms of ounces. While that may sound like a downside, it is because gold has historically had a higher value than most other assets and will hold its value better in the long run.

• Silver

In comparison, silver is relatively inexpensive. You can usually pick up an ounce for between $20 and $30, so it is easier for investors to get more. This is one of the reasons that silver is favoured by first-time investors or those seeking a portfolio diversification mechanism without putting large sums to work.

Liquidity and Market Size

Liquidity, in financial markets, is the measure of how easily an asset can be purchased or sold. Gold and silver value both have high liquidity, but there are a few differences.

• Gold

Gold is perhaps the most famous of all the assets in many parts of the world. Everyone agrees to it, and there is always demand for it, especially in times of economic crises. Gold is a sizeable and mature market, providing the ease of access to cash with negligible price alteration. Gold investors usually have easy access to a liquid market.

• Silver

While silver also has good liquidity, it is a smaller market than gold. The silver market is far narrower than gold, too: it may not always be such an easy task to deal with huge amounts of silver as it will with gold. Nonetheless, silver still represents a very liquid asset in most economies because of the industrial nature that has used it for quite some time.

Storage and Protection

Another aspect is the choice to make between gold and silver being storage. While both metals require safe keeping, their high value per ounce makes gold more efficient in the space needed for storage.

• Gold

Gold is also costlier, so it takes only a little amount of money to acquire gold and store it in a smaller size. The compact quality of gold allows you to store a lot of money in a small area. This is why many investors prefer safety deposit boxes, vaults, or specialized storage services for gold.

• Silver

Despite being cheaper, silver will take up much more space as it is bulkier. A lot of silver takes up more room, and securing larger amounts can be inconvenient. When planning a purchase of larger tons of silver, one must take into consideration the aspect of storage cost as well.

Fine Gold Bullion: The Precious Metals Company You Can Trust

If you want to begin your investment with gold and silver, you should try Fine Gold Bullion. From gold and silver bars to coins, they have everything you need to help you make the right decision when investing in precious metals with years of industry experience. Their website provides an easy-to-use interface designed to facilitate the purchasing, selling, and storing of your tangible precious metals. Head on over to Fine Gold Bullion and view how their expert services can help you make good decisions for your investment portfolio.