Gold vs Silver – Which One Should I Invest In?

Abundant capital is built through significant investments, so simply saving money in fiat currency (although it is necessary) will not exactly take us to the position we want to be in. There are multiple assets and markets in which we can invest to multiply our money, being gold and silver very good options to do so.

Gold and silver are both metals that are used worldwide for purposes as diverse as their price. Every investor / trader must be very careful when placing orders with these assets because their price can be very volatile (especially gold) and sensitive to market movements. However, since gold is a finite asset, its value will constantly rise, representing high earning opportunities now and in the future.

Disclaimer: this guide should not be considered investment advice. This is just for educational purposes only. Never invest more than what you are able to lose and always contact a professional financial advisor.

Gold or Silver?

Gold should not be understood as a raw material, since its industrial use is minimal. Gold is a precious metal that is used almost exclusively as a store of value. It can be understood as an international currency that allows individuals and states to preserve value and purchasing power in the long term. Today there are large gold mines that are dedicated almost exclusively to mining this metal. A metal that, once extracted, separated, melted and made into ingots – with the enormous environmental impact that this process entails – will be stored in safes on the other side of the world. One of the most absurd tasks that humans do today.

On the contrary, silver can be understood as a raw material since it has great industrial uses. For example, silver is used in analog photography (for the photosensitivity of silver nitrate), in solar panels (for being an excellent conductor), or in medicine (for being antibacterial). Of course it is also used in jewelry. It is seen that some of these industries “go to more” (solar panels or medicine) and others “go to less” (analog photography). Silver is also used as a store of value, but that use is proportionally much less than in the case of gold. On the part of its mining, silver has the strange characteristic that 70% of world production is obtained as residual element from mines of other metals. In other words, only 30% of the annual supply of silver comes from mines whose main product is silver.

Gold will always give higher returns

Gold is an international currency that is used throughout the world as a store of value; its price has covered inflation over the centuries and it is not too volatile. Silver is a raw material for industrial use; its price has not covered inflation since it was discontinued as a currency, and it is also extremely volatile. This is why I believe that the vast majority of savers should consider an investment in gold long before an investment in silver.

I would consider an investment in silver in two cases. The first is to seek to speculate and make money in the coming years if silver maintains significant movements in the market. Anyone looking for this must be very careful because it is difficult: knowing that silver is surely a long-term regulatory investment, you have to be very correct when you buy and sell in order to earn money. However, if we refer to short/medium term investments, professional traders will be able to make much more profit investing in gold than in silver.

Whatever your decision is, you should base your investment on an accurate analysis taking into account the previous price patterns in both assets and not be carried away by emotions. Gold is currently trading historical price zones, so we must be very careful with the operations we position.