Gold and silver have been relatively solid investments for centuries. But like any investment, it pays to go in with a clear picture of what you’re getting into before you buy and sell gold or silver.
We’ve been buying and selling gold for more than two decades now and get all sorts of questions about precious metal investment. Among the most common: Is gold a better investment than silver?
Finding an answer to that question depends on weighing a few different factors:
1. Is gold or silver a better investment? Volatility
There’s a much larger supply of silver than there is of gold. However, the market value of that supply is reversed. In 2019, gold had a market value of $192 billion, while silver was at $16 billion.
This means that a small amount of money can have a greater impact on the price of silver. When silver has a good day, its price will rise more than gold. And on bad days, it will decline more than gold does.
For example, between 2008 and 2011, gold saw gains of 166 percent, while silver rose by 448 percent. But in the next five year period, silver fell nearly 72 percent, while gold declined by 44 percent.
Investors should be prepared for this yo-yo effect. Silver may not be the right investment for you if you’re not ready to see it rise and fall.
2. Is gold or silver a better investment? Affordability
Silver offers many of the benefits of gold at a much lower cost, making it more affordable for everyday investors working with smaller budgets. It’s a reliable investment that could be helpful if you needed to sell off metal to make a smaller purchase or if you wanted to give precious metals as a gift.
3. Is gold or silver a better investment? Storage
You will need a lot more space to store silver than you will with gold. Put one way, you can hold tens of thousands of dollars’ worth of gold in your hand but would need several boxes to store an equal amount of silver.
4. Is gold or silver a better investment? Supply and demand
Silver has a lot of industrial uses. You’ll find it in everything from electronics to medical devices to batteries, meaning there will be a greater demand for silver. At the same time, a lot of this silver is lost during the production process, meaning a new supply is constantly needed to keep up with demand.
There’s a much bigger stockpile of gold compared to silver. Central banks tend to buy – and then keep – a great deal of gold, but a relatively smaller amount of silver.
While the question “Is gold or silver a better investment?” is an important one to ask, we’d recommend considering these points as well:
1. Don’t build your wealth, preserve your wealth
We’ve made this point before and will likely make it again: investing in gold or silver should be more about preserving the money you have than making money. It’s the notion that you want the $500 you have in 2020 to be worth $500 in 2021.
2. Work with a trusted partner
As we said earlier, we’ve been in business for more than 25 years. And in that time, we’ve developed a philosophy regarding precious metals: consult first, talk about pricing later.
We want to know why our customers want to invest in gold and silver. We’ll also talk to you about what we see when we look at the market.
If you’re interested in investing in gold or want to buy and sell silver, visit Doylestown Gold Exchange to receive a free consultation. We’ll be happy to help you understand the market before you buy.