Gold and Silver – Which Precious Metal is Better Suited For My Investment?

For some investors, deciding on a particular type of investment can be a tad tricky, especially when it revolves between two equally lucrative forms of precious metals such as gold and silver, which as already explained in the previous article, are indeed a timeless form of wealth. At this delicate juncture, equipping oneself with background knowledge of the precious metal can help relate if gold or silver is better suited for one’s investment type.

Gold
Firstly, for pure gold, it offers good liquidity as it can be easily traded and exchanged. Gold’s high density also allows it to be simply transported and divided into various sizes and weights for trade or exchange. Real gold is extremely rare below ground and is collected through intense mining. This precious metal is almost impossible to counterfeit, effortlessly verifiable from its weight, and does not rust or decay.

Silver
Silver is similar to gold in terms of its monetary properties and has been traded throughout history as a form of money longer than gold. Previously, silver was used in everyday transactions such as food and clothing, but after decades of global development and advancement, silver is now utilized for the production of technology, cosmetics and even medicine. The world’s silver reserves are nearly exhausted today, making it an estimated 4 times rarer than gold above ground. It is also a more preferred form of trade currency in smaller transactions, commonly known as an “industrial and investor’s type of precious metal” or “poor man’s gold”. Compared to gold, silver is transformed at a much faster rate from the minute it is mined, being a necessary component in producing high technology goods such as computers, mobile phones and mp3 players.

Presently, almost the entire supply of silver mined each year is being swiftly used up for industrial purposes, leaving only an approximate 1.5 billion of dollars worth of silver for global trade annually. Of which, only an estimated 5 to 6% is subsequently converted into investment bullions and coins. Hence, one can only cautiously observe the fast diminishing but rare and rewarding opportunity to invest in silver, due to its ever declining availability.

Gold and silver – both a win-win investment
Most importantly, investing in either gold or silver is in itself a wise step as precious metals are a win-win investment. Ordinary belief has it that the silver is abundant and less valuable than gold when in truth, it is not. As earlier stated, the global supply of silver is rapidly shrinking. And the lower the supply, the better for the investor who owns it as its value increases.

Fortunately for potential investors, current market prices of precious metals gold and silver remain comparatively low and affordable, an arguably political move to keep the calm of the mass population operating and trading on the fiat standard. In addition, delivery contracts for worldwide paper silver companies add up to about 1 billion ounces of silver when in fact, there are only approximately 300 million ounces of physical silver existing above ground at this point in time. Thus, a smart investor can take advantage of this particular shortfall to invest in solid, physical silver now and reap considerable revenue when he or she owns a real stake in a dwindling supply of pure precious metal assets, momentarily being undervalued.

One thing to take note is that silver tends to be far more volatile than gold and therefore it is not for those who are weak-hearted. It can rise faster than gold but it may fall a sharp 9% in day while gold only drop 2%.

From an investor’s advisor’s perspective, owning physical gold and silver now will certainly be a money-spinning venture, taking into account its present affordability and quick, decreasing supply, all taking place together with the rise of the commodities’ era. Now, the only question left to ask yourself is, should you invest in gold or silver?

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Joshua is a bullion hobbyist who is interested in our current daily economics, especially about how high inflation can greatly impact our lives. He is currently a student and has been running a private website since mid 2008, offering to import in several popular types of physical silver for investors in Singapore. Joshua's ideal is to provide the local investors with well known silver collection at a cheaper rate in order to boost a high bullion traffic flow in Singapore, and hopefully in time will match the traffic in the US market. Most importantly, Joshua hopes to spread the knowledge of how fiat currency works and hope that the general public are able to protect themselves in some way or another, with realistic expectations when investing in Precious Metals.

joshua

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