Gold Vs. Silver
Once you have a general understanding of Precious Metals as an investment product, you can delve into more specific aspects of Precious Metal investing. The term “Precious Metal” can correctly be applied to any naturally occurring but rare metallic chemical element of high economic value. However, here we are primarily referring to the products we at APMEX deal in, mainly Gold and Silver but also Platinum and Palladium.
Gold and Silver differ from each other in several key aspects, so here we will discuss specific differences and point out the advantages and disadvantages of owning each of these two metals. Topics to consider include each metal’s price as well as the price ratio between the two, each metal’s liquidity, storage needs, and the premium commanded by each metal.
The Spot Prices of Gold and Silver
Gold and Silver prices fluctuate, so the best way to get a general idea of the current value of these metals is to review their prices over a period of months and years. APMEX has excellent up-to-the-minute and historical price charts that are fully interactive. Using them is a great way to understand the movement of the Precious Metals markets for the past few months or the past few decades. A cursory look can show you that while the price of Gold fluctuates, it has enjoyed a long upward trend. Silver has followed a fairly similar pattern, ranging in price month to month, but generally showing upward growth over time.
What we can discern from the historical price charts at APMEX is that Gold has generally been significantly more expensive than Silver. The contrast between Gold and Silver prices exists even though there is actually more Gold above-ground right now than there is Silver; experts currently estimate that there are about 5 billion ounces of Gold above ground right now, and only about 450 million ounces of Silver above ground.
The commonly accepted reasons for this are that, despite its relative abundance, Gold is more widely used for personal accessories such as jewelry and watches, the collective psyche of Mankind is steeped in the idea that Gold equals wealth and will always function as currency, and that Gold is in higher demand with both central banks and individual investors than Silver.
Gold and Silver both provide their owners with extremely liquid assets, viewed as a valuable commodity worldwide, and even accepted as currency in certain circumstances. Investors can buy physical Gold and Silver online any time, day or night, from a respected and reputable online Precious Metals retailer like APMEX. If you wish to make changes in your holdings, you can sell Precious Metals back to most online retailers, and there are always other resale options such as pawn shops, coin dealers, or jewelry stores, on eBay, or to local individuals.
The Gold and Silver markets make your Precious Metals investments pretty much as liquid as any investment can be, so you never have to worry about supply shortages or being “stuck” with an item. When pushed, most experts will agree that Gold offers greater liquidity than Silver due to its greater demand.
In the matters of storage and transport, Gold definitely presents fewer challenges than Silver. Gold bears much, much higher cash value per ounce than Silver, so you can hold a greater monetary investment into a same-sized safe or shipping container. Not only is Gold worth significantly more per ounce than Silver, but it is also denser of the two metals, so Gold is the greater value by volume, too. It is easy to store $10,000 worth of Gold, whereas storing $10,000 worth of Silver at home may require some planning.
Finally, let’s examine the difference between the premiums attached to Physical Gold and Physical Silver. Precious Metals investors, know that buying Precious Metals products as close as possible to the current spot price allows you to realize the maximum profit later. Of course, buying Gold or Silver at precisely the current spot price is next to impossible for any individual investor. Even the most respected dealers have to maintain the cost of doing business and earn a living. Small premiums are entirely fair. However, by selecting the right products and buying in volume when you can, you can make sure you are paying the most competitive possible premium.
When you have investment dollars to spend, take the time to do the math and see what products will provide the most “bang for your buck.” A general rule of thumb is that investors who will be spending less than $1,500 on Precious Metals investment products are better off buying Silver, while investors who will be putting more than $1,500 into their Precious Metals investment will be ahead buying Gold. Of course, this doesn’t take account for an investor’s personal taste or what they project their future needs might be. Knowledge is power, and we are here to empower you to make the right investing decisions for you.