Gold vs. Silver – The Differences You Should Know Before Investing
Even if you’re not a financial expert, you must have some idea about the various investment options investors can choose from. Usually, most of them opt for traditional options like stocks and bonds, however, there’s a fair share of risk attached to these options.
For starters, the stock market can be quite volatile. You never really know when it might collapse. In contrast, the precious metal market is a lot more secure.
Investing in Precious Metals
Unlike stocks, precious metals are commodities which investors can buy. The idea is to wait for some time and let the value of the metal increase. Once it does, you sell the commodity. The difference between the purchase and selling price is your profit.
When it comes to precious metals, there are multiple options. These include gold and silver. However, investing in these two metals is not the same thing. Let’s take a look at the differences between the two:
Silver Prices Are Volatile
Compared to gold, silver prices are much more volatile. This is because silver’s annual supply (1 billion ounces) is higher than that of gold (120 million ounces).
You might think that since silver’s supply is higher, its price should be more valuable than that of gold, but the opposite is true.
It’s basic demand and supply really. Since silver’s supply is higher, therefore, its demand is comparatively lower. Naturally this affects the prices.
Just look at this way, supply of silver is pretty high and even the smallest amount of money can have a significant impact on its value. Just stay prepared for jumps and declines in prices if you choose to invest in silver.
Gold Is More Expensive
Since supply of gold is lower than that of silver therefore, its price is also comparatively higher. This is perhaps why silver is referred to as ‘poor man’s gold.’
There’s the argument that gold has higher value, but you should also know that by buying physical silver, you can get the same advantages as gold. Furthermore, it’s also easier to sell silver.
Since silver is cheaper, it’s a lot easier to find buyers who would be willing to buy it. With gold, you might have to wait for some time before you find someone who has the finances to buy it.
These are just basic differences between gold and silver, however, they also have certain similarities. For example, they both have minimum risk attached to them and offer privacy and confidentiality.