Gold Vs Silver: How Can You Decide Which Metal You Should Invest In?
New to investing and exploring your options? You’ve come to the right place. Precious metal investment is still not widespread. However, it is an excellent option as it reduces the risk and volatility of your overall portfolio.
The question now is, which precious metal should you go for? The most common ones today are gold and silver. Both come with their set of advantages and disadvantages. Let’s find out what those qualities are and which one is best for your investment needs.
Gold is Less Volatile
Silver is more volatile than gold. Due to its popularity, gold price fluctuations become the highlight of the day, but gold has been seen to have very stable growth in the long run. The annual volatility of gold rates was slightly higher than the S&P 500, recorded for 30 years.
The silver market is comparatively smaller than the gold market, making it susceptible to price fluctuations.
Hence, if you’re looking to gain through speculations, silver should be your metal of choice. On the other hand, if your goal is long-term and comparatively less risky investments, you should go for gold investments.
Silver is More Affordable
Throughout history, silver has been referred to as “the poor man’s gold”. A good metric to back this saying will be the gold-to-silver ratio.
This ratio tells us the gold against the silver price per ounce. The gold to silver ratio today is approximately 67 to 1. Even when silver has been at its highest price points, the gold rate has been approx-60% more than that.
So, if you’re looking to invest but also have a limited budget, it’s always a good idea to go for silver. However, if you’ve got enough to invest in gold coins or bullions, go for it!
Silver has Industrial Use
Silver has a wide array of industrial applications. Silver is used in electronics, solar panels, medicine, and many other industries.
Therefore, the demand for silver is greatly influenced by the overall economic conditions and industrial requirements. Gold too is used in some manufacturing; its usage is pretty low.
You must be thinking, how’s all this related to investments? The excessive industrial usage of silver means that silver demands tend to fluctuate based on the overall industry.
So, if you want to invest as a hedge to the economy, gold is a better option. But if your country’s economy is doing good and you want to take advantage of the industrial growth, buy silver coins or bullions.
Looking to invest in either of the precious metals? We’re the perfect match for you. At Orion Metal Exchange, we sell gold and silver coins online. We also offer the facility to open a gold or silver IRA.