Investing in Gold vs Silver - Sharpen Your Perception before Making the Final Move

invest gold vs silver

Since the ancient era, gold and silver has been yearned for and prized all around the world as assets of real intrinsic value. Being multidisciplinary in nature, both these propitious sources of returns can be a viable consideration indeed while planning your investment portfolio.

Starting from real estate to capital stocks, investment funds to retirement schemes, banking products to insurance schemes, the options are infinite. However, the aforesaid can undeniably be considered as two of the most conventional and prospective investment instruments that can cater the interests of both a venturous investor and conservative common man.

Gold vs Silver: A Comparative Approach
Owning a considerable sum of both gold and silver has served as a fruitful hedging option against the times of financial dire including catastrophic economic turbulence. Being two of the most precious metals of all times, they boast a series of promising advantages compared to any other form of currency. Since they are extremely volatile in nature, they would not be able to serve as an ideal option for the faint-hearted. Moreover, you cannot be able to invest in these assets on an intraday basis as the price swings rapidly, almost every now and then, which are enough to confound the brains of speculators.

Investing in Gold
Gold is indisputably a crucial asset of an ideal, profit-driven and diversified investment portfolio since its price significantly rises due to various events which, in otherwise result in a decline of the value of paper investments including stocks and bonds, coins and various other assets. Considering the same, people address it as a highly advantageous way of preserving their wealth and passing it on gradually to the next generations. Since the ancient era, we have observed a series of striking happenings all over the world including massive fall in the prices of U.S dollar, price inflation and deflation, geopolitical uncertainty, supply constraints, increased demand and portfolio diversification, all of which majorly influenced the value of different investment options, except Gold. Thus, it has immense potential to remain firm and unswerving even when perturbed with severe perilous financial upside downs.

Investing in Silver
Being currently sold at INR 40000 per kg, it is not just merely used as a piece of jewellery. The silver market experienced a soar during the first few decades which, however, is encountering a slower growth rate in the recent years. Being traded both as a precious and industrial metal, silver is priced at less than 2% of gold price. On the contrary, it is around 100 times pricier than copper. Compared to gold, this metal is more subjected to demand and supply constraints and considering its utility in building industrial products ranging from electric conductors, mobile handsets, normal lead acid batteries, solar panels to computers and more, it gets influenced by the drastic fluctuations of the Global economic cycle. Strikingly, gold is mostly bought by people for accumulation purpose, whereas, silver is used as a valuable metal for industrial usage also and thus, considered to be highly useful as well.

Following here is an overview of three crucial aspects, considering which will help you to understand the difference between Gold and Silver as a propitious investment.

Liquidity
Both these two metals reflect a high rate of liquidity while being considered as a valuable commodity and form of currency. Investors all across the world can buy both gold and silver online or from trusted metal retailers. At the time of selling, you can get a whole list of options including online retailers as well as local jewellers. In terms of liquidity, both gold and silver can be considered as potential options and thus, the investors need not worry much about supply shortage or storing the asset for long. However, while comparing the two, gold is in a better position because of its greater demand and supply.

Markup
Another key consideration is the deviation between the retail markup of physical gold and silver. Prudent investors always try to buy the metals at the current spot price or the price closest to it. However, technically it is almost impossible for the investor to buy the metal at the current spot price as because the trading companies from whom, he is supposed to buy generate revenue on the basis of buy/sell margins and thus, they add an additional premium to the final price. By choosing the right product in the right quantity, you can tactfully decrease the premium amount to a considerable extent. Depending on the market scenario, investment amount and personal preference; you should plan on whether to plough money into gold or silver.

Volatility
As observed from the recent records, the total supply of silver on an annual basis is substantially higher than gold and thus, it can be stated that the silver market is quite bigger in terms of quantity than the latter one. However, considering the fact that the price of gold is way more high than silver, the total value of annual supply of silver becomes much lower when compared with gold.

Storage Space
Considering the metal Silver; it requires a huge amount of storage space compared to gold. At the current price, an investor will be able to purchase more amount of silver than gold, due to its substantial price difference. Moreover, since the density of silver is much less than gold, its volume is around 84% high when compared to gold.

Industrial Usage
As observed, around 12% of the total consumption of gold is being utilized for industrial usage. On the contrary, since silver boasts a set of unique characteristics, a hefty 56%of its total supply is deployed by industrialists for catering varied industrial purposes. As mentioned above, silver is considered to be one of the most indispensable metals which is both thermally and electrically conductive. Ranging from medical applications to electronics, solar panels to batteries, it is used extensively in varied industrial domains.

Both gold and silver have firmly stood against the test of time and served as a dependable store of value. Both these precious metals can be certainly termed as long-term investments and boast a set of common characteristics as well. Thus, meticulous evaluation of the aforesaid pointers is of pivotal importance for both an investor and common man to draw the conclusion that which one of these potential investment instruments can be the key to achieve their individual financial objectives.

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