Invest In Silver Or Gold – 7 Facts About Silver You Must Know
In the recent rally for precious metals, those who invest in silver has seen their investment gained much more than those who invest in gold. So it’s not surprising to find more and more people taking an interest to invest in silver. Before before you start your silver investment journey, here are some important comparison between gold and silver you must know.
From a historical perspective, gold trading price has always been more than silver trading price. This is because the supply of silver is more than 10 times that of gold. So should you only invest in gold since it’s more expensive? The answer is no. This is because if you invest in silver, you will get more value for your money. The reason is simple: the current gold silver price ratio is still relatively high, therefore the silver trading price has more room to appreciate.
So should you sell your farm and dupe all your savings to invest in silver? The answer is no again. This is because gold is still highly regarded in most countries and central banks, in particular China, India and Russia. Most people still perceive gold as the ultimate and real money. You should not only invest in silver but also invest in gold so that you can get the best of both worlds. It’s also another way to diversify your precious metals investing portfolio.
7 Facts To Know If You Want To Invest In Silver
If you have not invest in silver before, now is the time to really take a look at this special precious metal. And if you’re new and is keen to invest in silver, here are 7 important facts you must know between silver and gold:
1. Silver is highly versatile. It is being used in many applications and products such as in electronics.
2. Silver supply and demand are both ‘inelastic’. This means that supply cannot be ramped up quickly when its price rises as 70% of silver is produced as byproduct of other primary metal mines.
3.The gold silver ratio is currently about 56:1. The ratio bottomed at 16:1 in 1980. This is means that if the gold silver ratio reach 16:1 again, silver trading price is going to make a rise 3.5 times.
4. Silver tend to outperform gold when the economy is good. This could be because silver has the dual role of being an industrial metal as well as a monetary metal. Therefore, the demand for silver will shoot up when the economy is rolling. On the other hand, gold tend to perform better in times of economic uncertainties. Even though gold fell substantially during the financial meltdown of 2008, it fell less than did the stock indexes, silver, or oil.
5. Those who already invest in silver will know that silver trading price is more volatile than gold trading price. Silver trading price tend to move faster than gold. For example in early 2008, gold trading price rose about 250% but silver edged up higher over 300% since 2002. When prices declined throughout the remainder of 2008, silver trading price fell farther than gold from peak to trough. Silver fell nearly 60% while gold fell about half as much or 30%. Now looks like silver is leading the up turn in prices again.
6. Gold is hoarded by many central banks and large investors and the stockpile is continuously expanding. Silver is consumed and is uneconomical to recycle in most uses.
7. Silver is the commodity that is most widely used in many applications besides petroleum. Therefore, people who invest in silver are competing with industries to buy silver. Gold is purely for investment.
If you still ask which is better – invest in silver or gold? I’ll say invest in silver and gold at the same time -but silver is likely to continue outperforming gold.