Gold and Silver – The Differences You Should Know Before Investing
The following article is created by Orion Metal Exchange for the benefit of our investors and perspective investors alike. We seek to provide relevant content concerning precious metals and the impact caused by the economy and geopolitical trends that will most likely place impact on your financial future. If you are interested in learning about precious metal investing, call 1-800-559-0088, for a FREE investor kit.
Precious Metals are generally utilized to offset market volatility and inflation. Gold and silver are tangible assets commonly used to store wealth and protect purchasing power over time. In this blog we will review the unique benefits of gold and silver.
The Benefits of Owning Gold
Gold is commonly used as a hedge against geoeconomic uncertainty and inflation. Physical gold is not prone to mismanagement or mishandling by corporations or government entities. Gold is not subject to government policy changes. Physical gold is free from the risk associated with debt. Paper currency values can be manipulated by government policies. As a government continues to print paper currency, the paper’s purchasing power weakens. Paper currencies lose value due to excessive government deficit spending. As a government goes further in debt, gold will rise in value and offset the loss of purchasing power over time. Unlike many traditional paper investments, physical gold carries zero debt. This means that no one can borrow or loan against your physical gold holdings without your consent. When debt is associated with an investment, a higher level of risk is present. Due to the absence of debt, physical gold coins are considered a conservative long-term investment.
The Benefits of Owning Silver
When compared to gold, silver is significantly more undervalued. To determine the value of any commodity, investors should consider the current cost of production and the past performance of the commodity. The cost to produce silver will move higher with inflation over time. Which is why investors own physical silver to protect purchasing power over time. Silver reached a high of $52 per ounce in 1980 and $49 per ounce in 2011. Unlike gold, silver supply is constantly depleted due to industrial and technological applications. The depletion of supply adds upside potential due to supply and demand fundamentals.
Precious Metals Are a Liquid Asset Class
Liquidity is a crucial element in any financial asset. Gold and silver coins are extremely easy to buy and sell. For example, a generic silver Eagle or gold Eagle coin is globally recognized and accepted in exchange for goods and services due to their intrinsic value and demand.
Physical Gold and Silver Is a Requirement to Proper Diversification
If you do not own physical precious metals, you must first purchase a core position in precious metals to attain proper diversification. Once you own a core position in physical gold and silver, look to strengthen your precious metal holdings on a value basis. Remember, buy low and sell high. Gold and silver do not move in lockstep with each other. They can fluctuate independently in value, and based on market conditions, one may offer a better value and more upside potential than another at certain times.
The percentage of physical precious metals you own should be based on the current market trends and your personal financial goals and needs.
Orion Metal Exchange presents this article for both our investors and perspective investors, offering insights into precious metals and their relevance amidst economic and geopolitical trends. To explore precious metal investing further, dial 1-800-559-0088 for a FREE investor kit.
Contact us today to know more about our services.
Need Answers? Check Our FAQ!
Is it better to invest in gold or silver?
Gold and silver coins are commonly utilized to diversify and hedge investment portfolios. The decision to own gold or silver should be based on your personal goals and needs.
Should I buy gold coins or bars?
Coins are generally more widely accepted. Many sovereign mints produce coins that are designated as legal tender. Bars are not designated as legal tender.
Should I buy gold or silver in 2024?
Gold and silver are expected to move higher in value due to the ballooning U.S. government deficit. As the U.S. dollar loses value, gold and silver is expected to rise in value.
