Deciding between investing in silver or investing in gold can be difficult,
because it is largely a personal choice. Silver and gold are both precious
metals and make for good investments when you want to protect your wealth
against inflation.
But there are serious differences between the two
in terms of market size, volatility, and availability.
Market Size
The silver market has always been, and will
continue to be, much smaller than the gold market. The amount of bullion gold
for investment available is estimated to be twice as much as that of bullion
silver.
What's more, the price of gold has been up to 97 times
higher than that of silver during the last hundred years, making the gold
market many, many times more valuable than the silver one.
Volatility
The relative smallness of the silver market
compared to the gold market makes silver more volatile. So much so that sudden
rises or slumps in the value of silver are extremely common. Obviously, this
makes investing in silver possibly more risky than investing in gold.
But also possibly more rewarding, since the price
of silver can also grow faster than that of gold. 2010 is a good example of a
year when the price of silver - at least in the first half of the year - has
risen much more than the price of gold.
Availability
There are far more known deposits of silver in the
earth than there are deposits of gold. While some believe that gold
availability is going to dwindle in the years to come, since most of the major
gold deposits have been already mined, nobody seems to worry about the
availability of silver.
The greater availability of silver suggests that
silver will not become nearly as expensive as gold. It also suggests that
silver prices can more easily fall than gold prices, since the growing scarcity
of gold will conserve the latter's value.
So, Silver or Gold?
The essential things to consider are these:
· The gold market is much bigger than the silver
market.
· Gold is, and will continue to be, much more
valuable than silver.
· The price of silver can increase (as well as
fall) more often and more significantly than the price of gold can.
· Silver deposits are widely available, whereas
gold ones are growing scarcer.
All this means that neither silver nor
gold is the better investment, but that you should choose the one most
appropriate for your situation and purpose. Investing in silver can mean bigger
return on investments in the short-term, but also more risks, whereas investing
in gold can mean more stability and fewer risks, but also smaller return on
investments in the short-term.
By- Una Page
