Silver is more volatile, cheaper and more closely linked to the industrial economy. Gold is more expensive and better for diversifying your overall portfolio. One or both of them may have a place in your wallet. Arguably, the best use of gold as an investment is to mitigate portfolio risk.
Both silver and gold can function as safe haven assets, but gold tends to have a better track record over longer periods of time. That said, in shorter periods, the specific dynamics of each market end up being more important for their respective returns. Regardless of the asset you buy, remember that neither asset generates cash flow, so the best thing for long-term investors would be to take a buy-and-hold approach with a profitable and growing portfolio of stocks. Therefore, silver is ideal for investors with small budgets and also for any small financial need that may arise in the future.
Gold is more suitable for larger purchases. It's relatively easy to hide some gold coins in a sock drawer or cookie jar, but those same hiding places aren't practical for the same investment in silver. The investment information provided in this table is for general informational and educational purposes only and should not be construed as financial or investment advice. Mining stocks make it possible to leverage the price of gold or silver, so a profitable miner will be much more profitable as the price of metals rises.
You can easily see that, in percentage terms, silver rises much more than gold in bull markets and falls much more than gold in bear markets. From electronic and medical applications to batteries and solar panels, silver is everywhere, whether you see it or not. Once again, silver surpassed gold by a significant margin during the Great Financial Crisis, with the wave of metal purchases in China and the EU debt crisis. Silver is one of the most in-demand metals in the world and silver mining companies are popular investments.
The main reason why governments don't have a lot of money is because it's no longer used in currencies. Silver is increasingly becoming a key component of what is known as the high-tech economy. The only economic situation in which silver may not fare well, at least initially, is a deflationary depression. While gold will most likely continue to account for most of the press releases, silver is still a reliable precious metal that is much more affordable for investors.
Jeff speaks regularly at conferences on precious metals, is a member of the board of directors of Strategic Wealth Preservation in Grand Cayman and provides exclusive analysis and market commentary to GoldSilver clients. The commonly accepted reasons why gold is more expensive than silver, despite its relative abundance, are that gold is used more in jewelry, gold is considered more of an “alternative currency” than silver, and central banks and individual investors demand it more than silver.
