Should You Invest in Gold or Silver?

The prices of bullion coins have increased in recent years. High inflation rates, slow economic growth, loss of global value of currency, and social and political uncertainty leads to increment in prices of precious metals. While gold has never lost its value over the centuries, it is not the only precious metal worth the investment. Other metals, like silver and platinum have been aggressively competing with it.

2016 is a predictable year for metal investors. If you are considering to buy gold or silver, then have a look at the factors below to choose one that suits your needs.

  • Long-term and Short-Term Gains:

Silver, the common man’s gold has emerged as the most unpredictable metal. During the first quarter, 2016 seemed to be a lucky year for gold investors. This was because the silver prices increased by 11%. However, silver’s price suddenly stopped increasing while gold continued to win the race. It is expected that silver’s price will continue to increase by the end of this year, which is why it is high time for silver investors to save for short-term return on investment. However, if you are looking for long-term gains then gold is a better option.

  • Industrial Importance:

The industrial performance of silver outperforms the importance of gold. In mobile phone industry, silver is used for manufacturing small parts of the product whereas gold is used for plating the expensive special editions only. Silver is also used in nanotechnology, laptop and computer industry, automobiles, solar panels, batteries, medical research, and more. In other words, silver is a primary resource for fulfilling the necessities of modern era.

It is estimated that the industrial demand of silver will increase by 27% by the end of 2018. The industries will require around 142 million ounces of silver to manufacture the life necessities. A general supply chain rule is that the cost of a resource increases with the increasing demand. So it is quite evident that the cost of silver will increase by 2018. Gold, in contrast, remains an unpredictable metal.

  • Silver Required Extra Storage:

The ratio of price gap in gold and silver has widened over the years. The ratio was 35 at the turn of the millennium. However, in the second decade, the ratio kept oscillating between 60 and 75. Keeping the price gap in view, AUD 10,000 investment in silver will require more storage space than AUD 10,000 investment in gold.

When it comes to storage, it is important to remember that the American president Franklin D. Roosevelt raided gold stored in safety deposit boxes in the banks. He ordered the Americans to surrender their gold investments in exchange of cash. Additionally, in the worst case scenario, banks collapse during times of crisis. This is why, storage of your investment is crucial to consider before purchasing gold or silver.

Gold and silver investments are also ideal to increase the weight of your market portfolio. Gold is considered a conservative resource for long-term gains, but facts predict that silver is the new black and should be treated as such.