Should You Invest in Gold or Silver?


The simplest answer to the question of whether it is better to invest in gold or silver is that there is no specific advantage that makes one metal a better investment choice than the other.

Throughout history, there are times when gold outperforms silver and is considered a better investment and conversely there are times when your money would be better invested in silver.

Understanding your investment goals and working with a reputable commodities investment firm is key to coming out ahead. Choosing a firm like Birch Gold Group, which has been in business since 2003 ensures you are getting qualified, experienced expertise to help you make the best decisions.

Percentage returns

As with most charts and statistics, you can take a set of numbers and create a persuasive case for investing or not; it’s all how you choose to view the numbers.

For example, if you compare the performance of gold against silver from 2006 and 2008, as the global financial crisis took hold, the value of gold rose by 10% but silver during that same period saw a 20% loss in its value.

Fast forward to 2008 and 2011 and in part likely due to market reactions surrounding the financial crisis, silver significantly outperform gold. Now from 2011 onwards until mid-2014, gold outperformed silver. In other words, in the short term silver and gold are volatile commodities.

What we can see from looking at the past performance of both gold and silver is that silver is as much as 70% more volatile than gold. In this case, a more adventurous investor looking for a higher risk and subsequent reward could try to pick their moment in time where they benefit from the volatility of silver prices.

Industrial applications

Regarding demand, during good economic times, silver is a metal in demand by manufacturers of electronics in particular. With demand, the price will rise. Alternatively, if we are in a period of economic downturn, silver in an industrial capacity will likely fall-off and have a negative effect on prices.

The case for silver

You could argue that silver is better value in comparison to gold. Gold is approximately 60 times more expensive than silver. And the silver reserves outnumber gold reserves by more than 10 to one. At this low price mining of new silver deposits may slow down of halt, and the price could rise with the potential to turn a profit. But remember silver is considerably more volatile than gold. So if your objective is to make risky investments for larger payouts, then silver is a good option.

The case for gold

Gold is popular as an investment because it is a physical asset and although values can rise and fall, it does not go bankrupt or default on promises and obligations, which is why gold has a history of increasing in value during times of crisis.

In the long term, gold is an excellent vehicle to maintain your wealth.