Gold Vs Silver As An Investment

Both Silver and Gold are precious metals, meaning that they are rare to find on the earth’s crust. Economically, both metals are sought after in cases where stocks and currencies are losing value. Investing in precious metals is used by investors to solve future economic uncertainties. When the economy is poor and the inflation is high, investors rush to prized metal investment, which provides a haven for their wealth. There’s so many good companies out there to invest with and we have access to some of the top gold investment companies.

If you are looking to invest in Silver or Gold, here are some distinctions that will help you make an informed decision.

Economic sensitivity

Silver is considered to be more sensitive to economic changes compared to gold. This sensitivity is contributed by the high industrial use of silver, unlike gold, whose purpose does not go beyond jewelry and investment. Half of the silver’s supply goes to industrial use compared to gold’s 12 percent, such that it is rare to go a day without using a product that that has silver. Production of medicine, electronics, solar, and batteries make use of silver. Unlike gold, the amount of silver that can return to the market for recycling is tiny, making its supply go high to meet the demand. A strong economy keeps this demand increased, but during economic turndowns, its industrial market goes down, but investors tend to bank more of it due to its safe-haven status.


Silver is more volatile than gold. Its market size, which is smaller than the gold market, makes it more volatile to price changes. A small amount of money has a greater impact on the price of silver, from which the price will rise higher than that of gold on up days and, in turn, fall more than gold on down days. This volatility makes silver ideal for short-term gains, which means that one should not panic and sell during the first big drop but should be emotionally prepared for the volatility to make a huge benefit from it.


Silver is cheaper than gold. This statement might sound too obvious, but silver, on the other hand, has many similarities to gold. Due to its small supply, gold is averagely 60 percent more valuable than silver. Some similarities include being a hard asset that is constantly guarded by the stockbroker and so tangible in such a way that it cannot be hacked. Silver, similar to gold, cannot be defaulted on, which is not the case with other investments. If you are looking for the privacy of a portion of your wealth, physical silver is ideal. From these similarities, you can benefit from silver at a lower cost than gold, making it more affordable. From this affordability, silver is suitable for investors with a small budget and small financial needs compared to gold, ideal for large purchases.

Inflation trends

Silver and gold make huge gains from inflation. During inflation times, the price of consumer goods goes up, making them more expensive, and in turn, the dollar loses its value. Since both are valued in dollars, they become inexpensive to buy with other currencies, increasing their value with rising inflation. From this, they become a good hedge of inflation since investors convert their money to gold and silver to protect the value of their assets. Silver tends to grow more than gold with a falling dollar and rising inflation due to its greater industrial demand.


Silver requires more storage space. From the value, one ounce of gold needs more ounces of silver to equal the weight. It requires 128 more space gold requires to store similar value silver. For example, you can hold gold worth fifty thousand dollars in hand, but it is not practical with silver, requiring boxes to keep the same value. Storage of silver is more expensive since if not placed in a dry location free of other elements, it will tarnish, unlike pure gold that does not tarnish. On the other hand, transportation of silver is difficult and cumbersome compared to gold which weighs fewer pounds than the same value of silver.


The stockpiles of silver are falling as those of gold rise. This effect might not seem to have a major impact on the investor but could impact various circumstances. Holding gold in reserves by banks and continuous purchases every year contributes to the overall gold demand. This source of demand is not the case with silver, but if demand for physical silver rose suddenly, it would have a huge impact on the market with the demand going up, skyrocketing the price.

There are various ways of investing in gold and silver; one can buy physical metals and invest through exchange-traded funds that do not require physical metal. One can also invest by acquiring shares in companies that mine these metals. You can now decide on investing in either gold or silver from the above distinctions.