When it comes to planning for the future, most people think in terms of a retirement account like a 401k or an IRA. If you have some extra money beyond that, maybe you invest in the stock market through a mutual fund or an exchange-traded fund. Of course, the stock market comes with the built-in risk of crashes that can wipe out your investment.
Some people hedge against this kind of risk with safe-haven investments. For example, they’ll buy gold and silver because these hang on to their value. Of course, then you bump against the buying silver vs gold question.
Thinking of investing in these precious metals, keep reading for a quick look at the differences.
Cost
When it comes to buying silver, whether you buy silver coins or buy silver bars, there is a tremendous price difference from gold. Over the last ten years, the price of silver has ranged from around $14 per ounce to nearly $50 per ounce. The price per ounce for gold ranged from around $1150 to a little over $2000 in the same period.
That makes silver a far more accessible investment than gold for most people looking for a safe-haven investment. If you’re really interested in silver, you can head over here for a guide to buying silver.
Market Volatility
As you can see from the price variations above, both gold and silver face market volatility. There is a crucial difference between the two.
A substantial portion of the demand for silver doesn’t come from investors. It comes from manufacturers. You find silver in a wide range of products that include electronics and cars. That means the price for silver will typically fall when the economy is bad because industrial uses fall off.
Fluctuations in gold prices come about in reaction to the stock market. When the stock market takes a dip or a dive, gold prices usually climb as people look for a safer investment.
Growth Potential
While gold prices will occasionally surge and create opportunities for massive gains, that’s a historical anomaly. In general, gold increases in value slowly over time. That means investing in gold is a long-term venture.
Silver prices fluctuate more often and more dramatically. That means you can theoretically see faster growth on the investment and cash out sooner. The trick is for you to correctly evaluate when the price is at a stable low before you buy.
Buying Silver vs Gold: Which Is Right for You?
The debate between buying silver vs gold mostly boils down to the investment budget for most people. The staggering cost per ounce of gold makes it a hard pill to swallow for most people taking their first steps into precious metal investing.
Silver isn’t as valuable, but the bar to entry is much, much lower. That makes it a reasonable investment for anyone working on a limited budget. It also provides you with a shorter timeline before you can potentially see a profit.
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