Should I Invest in Gold or Silver – Choosing the Right Investment Option
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The premise that the values of Gold and Silver will prosper in the coming years as uncertainty continues to loom over the greenback, has led investors to re-think their investment strategy.
Focus—an increased focus—is now on the purchase of the two precious metals, even from investors who have previously shown a lack-luster interest in the metallic prospect.
And so, as investors focus on gold and silver, naturally, they are found weighing the merits of allocation towards the two: Should we invest more in gold or in silver? Which is the better investment option out of the two metals?
Based on Percentage Returns…
Let’s look at the first assessment criterion, the percentage returns.
Gold has traditionally maintained a higher market value than silver and continues to do so. It also exhibits stability when it comes to fluctuations in market prices, something which you don’t often see with silver in a relative sense.
Combine the two, and it’s hard to argue against the case of gold as a better investment option than silver on the basis of percentage returns.
Based on Risk-Adjusted Returns
Risk-adjusted returns are an important assessment criterion that every astute investor should factor in when assessing an investment vehicle. Precious metals need to be tested against it as well to empower a better investment decision making.
The assessment basically implies evaluating the two metals based on their volatility. In that context, silver trumps gold. Its constant fluctuations allow investors more opportunities to buy and sell it at profit and get higher absolute return compared to gold.
Based on Gold/Silver Ratio
The ratio between the spot prices of gold and silver is called the gold/silver ratio. It basically indicates the ounces of silver you can buy with an ounce of gold or vice versa. Comparing the spot prices of the two metals, traditionally and at present, the gold/silver ratio leans in the favor of gold. This means, you can buy more silver with one ounce of gold than you can buy gold with one ounce of silver which makes gold a more favorable investment option.
In conclusion, based on the above assessment criteria, the benefits of investing in gold far outweigh that of silver, and as such, one should allocate a greater portion of their investment towards the shiny golden piece of metal that which we call gold.
Looking to buy gold online?
Here, at Orion Metal Exchange, we sell genuine gold bullion bars and coins online at competitive rates. Along with gold, we also sell silver, platinum and palladium. Being authorized PCGS dealers, we only believe in dealing in an honest, transparent and fair way. Contact us for any specific question or query.
