This is always the first question many traders and investors ask before investing in any of the two precious metals. Ago many investors preferred investing in gold than silver. However, this can be a mistake today because we have seen the price of silver moving faster than that of gold.
The main reason why most investors prefer gold is that gold is often viewed as a more valuable asset in human understanding. For example, on 1st March 2018, one ounce of gold was trading at $1,321.50 while that of silver was trading at $16.71. So gold was seen to be more valuable.
However, there are times when silver is a good investment than gold. In this article, we will try to explain in detail the differences in trading gold and silver and live you with the best option you can invest in.
Factors to consider before making a choice
Coming up with a solid decision to invest either in silver or gold can be a very hard task. However, having a closer and careful look at the factors influencing each of them at least you can easily which one can work for you. The factors include;
From the general statistics, it is estimated that only 12% of gold is utilized for industrial purposes. However, due to silvers more beneficial features, and therefore 56% of its supply is utilized in the industries.
Silver is everywhere, to start from electrical appliances to medical equipment to household items. You can’t miss silver in every place that you and it is because of this reason why it is believed to drive modern life.
Now that silver is more used than gold especially in industries, investing in it can be advantageous because of the market demand.
The volatility of gold and silver
The price of silver is more volatile than gold. Every year, about 25,000 metric tons of silver are supplied to the global market different from gold which is only about 3000 metric tons.
Therefore silver exhibits more volatility than gold because it only requires only a comparatively small amount of money to cause price movements. It is estimated that when gold moves by 1% either upwards or downwards, silver moves by about 3%.
Financial stress and central banks
In times of political instability, investing in gold is more beneficial than silver. Gold is always viewed as a hedge against political and economic uncertainties. When there are problems such as political instability in the country, most investors usually rush to gold to protect their investments from losses.
For example, during the 2008- 2009 financial crisis, the price of gold rose very high up to 50%. Even after the crisis, the price was still very high. Therefore in times of political instability and economic instability, investing in gold is a good thing.
Now that we have seen the differences, you can now choose which precious metal you can invest in and soar a lot of profit. Every metal has its time.