Silver VS Gold: Key Difference Investors Should Know

Precious metal investing continues to grow in popularity. Buyers who seek out opportunities to hedge against inflation and diversify their portfolios often turn to bullion like gold and silver.

Both precious metals are desired for their stability, beauty, and worldwide allure. Gold often steals the spotlight, but more ask if they should buy silver due to the metal’s affordability and wide range of industrial uses.


Gold and silver make for strong investment options and are a smart way to dive in the world of precious metal investing. Buyers should understand there are plenty of differences between each metal besides the spot price. Understanding more about each makes it easier to decide which type of bullion is a smarter investment choice.

Being Smart With Gold And Silver Investment

gold vs silver

Prospective bullion investors understand the spot prices between gold and silver usually sit far apart. But far fewer understand the price of silver is more volatile than gold, which could have significant investment implications.

Silver’s total yearly supply is about one billion ounces, while gold sits at roughly 120 million. However, the low price of silver makes the supply value vastly smaller than gold. As a result, it takes far less money to have an impact on the price of silver. The metal usually rises faster than gold in bull markets and falls much farther when markets are not as strong. Silver’s volatility can be an advantage, as the metal’s price has jumped higher than gold. From 1970 to 1980, silver rose 3105%, where gold jumped 2328%.

Investors should understand people will aim to sell off silver faster when a bull market looks imminent, so they should be quick to make decisions when the price seems to peak. Despite greater volatility, silver’s affordability relative to gold makes it more accessible to the average investor looking to buy bullion.

Buying gold in smaller amounts, like one gram and ½ ounce denominations, often becomes expensive due to the markup placed on these denominations. High premiums can eat into money allocated for bullion investment. It can also be harder to sell gold, especially in a crisis situation, as dealers and buyers might not be willing to hand over large amounts of cash in a transaction. The lower spot price of silver makes premiums less of an issue for those who are only able to purchase a couple of ounces at a time.

Understanding How Industrial Use Ties In With Value

Industrial use and versatility are other little-discussed elements when it comes to gold and silver investment. 56% of the total silver supply is used in the electronics, medical, and automotive industry, while just 12% of gold is allocated to industrial uses.

Silver’s conductivity with electricity and heat makes it indispensable across a variety of industries. Heavy use limits the total silver supply as bullion allocated for the industry is consumed and then discarded or destroyed.

Silver mining must keep up with the loss of millions of ounces of silver each year to maintain pace with demand. As a result, the silver price is more susceptible than gold to economic booms and busts that impact industry and manufacturing.

Even though silver is valuable in a number of industries, supplies across the world continue to fall as global governments turn away from storing bullion. Nations do not see a purpose for storing silver as it is not used in manufacturing coins, but they still do continue to purchase gold on a net basis each year.

The silver price would skyrocket if governments started to purchase silver, especially if it coincided with a general need for more physical silver. This would have a profound impact on the prices of gold and silver.

Gold And Silver Both Remain Strong Investment Options

Both gold and silver bullion are savvy investment choices. Each metal has been prized by countless civilizations and maintains value and lustier even as the economy continues to revolutionize through cryptocurrencies and decentralized finance.

Investors should understand there are many differences between gold and silver besides the spot price of each metal. Learning about industrial uses, the history of each metal, and how current political and economic conditions impact mining make for more informed investment decisions.

Buyers should also prepare to store their bullion in a secure manner or invest in a safe deposit box if they are wary about securing precious metals at their homes.

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