Gold vs. Silver: Is Either a Good Investment During Inflation?

S&P Futures




Dow Futures




Nasdaq Futures




Russell 2000 Futures




Crude Oil
















10-Yr Bond




















CMC Crypto 200




FTSE 100




Nikkei 225




gold vs silver investment

Commodities trading means you’re buying and selling raw materials rather than finished products (like a house) or financial assets (like stocks and bonds). Commodities are assets like corn, coffee, lumber and ore. One common form of commodities trading is investing in precious metals, namely gold and silver. As an investment asset, gold and silver have very different properties and uses in your portfolio.

For more help with investing in gold or silver, consider getting the help of a financial advisor.

Gold vs. Silver: Utility

The biggest thing that differentiates precious metal investing from other commodity investing is utility. For most other commodities, investors judge value based on supply and consumer demand. If you want to invest in coffee beans, for example, you can judge prices by how much coffee people are currently drinking, how tastes are changing, etc.

Precious metals are different in that they have relatively low commercial utility. Compared with other metals, here are relatively few consumer or industrial uses for assets like gold and silver.

However, silver does have much more industrial and commercial use than gold. Approximately half of all silver bought and sold on the market is used commercially, with applications ranging from dentistry to electronics. (This is still quite small compared to other metals, which are almost entirely used for production.) By contrast, gold has very few commercial applications aside from jewelry. This gives investors a basis on which to judge and predict price movements for silver, since you can make decisions based on factors such as industry need and how the global economy is moving.

Gold vs. Silver: Cost and Volatility

gold vs silver investment

At time of writing, silver traded at approximately $25.77 per ounce. Gold traded at $1,960 per ounce. While the details vary, the gap is consistent. Gold is historically much more expensive than silver. This is in part because silver deposits are nearly 20 times as common as gold. This leads to two outcomes for investors.

First, it’s much easier to invest in silver than gold. You can buy more of it for less money, meaning that less liquid investors can get into silver more easily. As with all financial assets this can also expose you to greater potential gains and losses, since you’re likely to see more change relative to the scope of your investment with a portfolio of silver.

However, that’s also the textbook definition of volatility. Low-cost assets tend to also be highly volatile specifically because small price changes have outsized effects on the underlying investment. For example, at current prices, silver only needs to change price by $2.57 per ounce to have a 10% price fluctuation. If the price of gold changed by $2.57, it would represent a change of 0.0013%.

Volatility isn’t necessarily a bad thing but it is something to watch out for, especially if you’re seeking a long-term investment.

Gold vs. Silver: Relationship to Broader Market

The price of gold tends to move inversely to the stock market.

Gold is what’s known as a “countercyclical investment.” This means that it tends to go up when mainstream assets go down and vice versa. Historically, the worse the stock market does the more investors flock to gold. By contrast, when times are good, investors tend to pull their money out of gold and put it into assets with greater links to the overall economy.

As a result, many investors hold gold in their portfolio specifically for if they need liquidity during a downturn. For example, a recession is the worst time to sell stocks but the best time to buy them. Having a pre-existing investment in gold can give you a valuable asset to sell during a recession so that you can buy other people’s undervalued assets without selling your own.

By contrast, silver tends to move with the economy overall, at least more so than gold. This is in significant part because of the same commercial applications that make silver a more predictable asset. When the economy slows down, industries need less silver for manufacturing, driving the price down.

Gold vs. Silver: Which Should You Buy?

gold vs silver investment

There’s no such thing as an objectively “better” investment.  It all depends on your market position and the state of your portfolio. A good rule of thumb is this: Buy silver if you’re investing for when times are good. This is a semi-predictable speculation asset that can make you some real money. Buy gold if you’re investing for when times are bad.

A good S&P 500 index fund will do you better than gold in the long run, but this can be a good countercyclical asset if you want to ensure liquidity in the event of a recession.

The Bottom Line

Gold and silver are especially popular commodity investments, in large part because of their historic relationship with money. Governments once used gold and silver to make their currency. While no major economy uses gold or silver as the basis for its currency any longer, investors still see these two metals as active stores of value. Silver is more volatile, cheaper and more tightly linked with the industrial economy. Gold is more expensive and better for diversifying your portfolio overall. Either or both may have a place in your portfolio.

Precious Metal Investing Tips

Arguably the best use for gold as an investment is to mitigate portfolio risk. This is a good asset for market downturns, since it can give you a source of value at a time when other investments are cratering.

A financial advisor can help you decide if gold or silver would be a good part of your portfolio. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.

Photo credit: ©, ©, ©

The post Gold vs. Silver Investments: Which Is Better? appeared first on SmartAsset Blog.


Charles Schwab: Add This Asset to Your Retirement Portfolio

The first quarter of 2022 has been difficult for retirement savers and retirees alike, and according to investment firm Charles Schwab, it was one of the worst quarters for fixed-income in decades. However, the rising yields and changed Federal Reserve … Continue reading → The post Charles Schwab Says Now Is the Time to Add This Asset to Your Retirement Portfolio appeared first on SmartAsset Blog.


The Gold Market’s Great Migration Sends Bullion Rushing East

(Bloomberg) — There’s a global migration underway in the gold market, as western investors dump bullion while Asian buyers take advantage of a tumbling price to snap up cheap jewelry and bars.Most Read from BloombergUkraine Latest: Putin Calls Security Meeting, Comments on BridgeRussia Races to Reopen Crimea Bridge Damaged in Fiery BlastPutin Orders Sakhalin-1 Project Transferred to Russian EntityEight Years of Combat Hardened Ukraine’s Army Into a Fighting ForceRising rates that make gold less


Wall Street Is Missing the Risk to Stocks If Inflation Is Beaten

(Bloomberg) — The conventional wisdom with stock bulls is that prices will take off when the Federal Reserve wins its fight against inflation. But the end of surging consumer costs could unleash another round of bad news.Most Read from BloombergUkraine Latest: Putin Calls Security Meeting, Comments on BridgeRussia Races to Reopen Crimea Bridge Damaged in Fiery BlastPutin Orders Sakhalin-1 Project Transferred to Russian EntityEight Years of Combat Hardened Ukraine’s Army Into a Fighting ForceA s

The Wall Street Journal

Why Are My Inflation-Protected Bonds Falling When Inflation Is So High?

You would think this would be TIPS’ time to shine. Instead, the prices of Treasury inflation-protected securities—government bonds that are adjusted to keep up with inflation—have declined this year, even as inflation has soared. The comparable loss for ICE’s index of regular Treasury bonds was 13.5%.

The Wall Street Journal

Economy Week Ahead: Inflation and Retail Sales in Focus

Monday is Columbus Day, a federal holiday. U.S. stock markets are open but the corporate bond and Treasury markets are closed. The Labor Department releases a report on the prices that suppliers charged businesses and other customers in September.


2 “Strong Buy” Stocks With High-Yielding Dividends

For the retail investor, the only certainty of our current market environment is uncertainty. Volatility is up, and the main indexes are showing deepening losses. As if that wasn’t enough, at least one market bull is turning a bit more pessimistic. JPMorgan strategist Marko Kolanovic has been one of the more bullish voices on Wall Street in recent months, but current conditions have him pushing the timeline back. While he still believes that the S&P 500 can hit 4,800, or a 32% gain from current


How a Ban on Russia’s Mining Giants Could Shake the Metals World

(Bloomberg) — Most Read from BloombergUkraine Latest: Putin Calls Security Meeting, Comments on BridgeRussia Races to Reopen Crimea Bridge Damaged in Fiery BlastPutin Orders Sakhalin-1 Project Transferred to Russian EntityEight Years of Combat Hardened Ukraine’s Army Into a Fighting ForceA possible ban on Russian supplies by the London Metal Exchange would be a seismic event for the metals industry, cutting some of the world’s biggest companies off from the main global marketplace.The exchange

Stocks Poised to Open Lower on Monday

The Federal Open Market Committee will release the minutes from its September meeting on Wednesday, and the Bureau of Labor Statistics will report the September consumer price index on Thursday morning.

Elon Musk’s Private Messages with Billionaire Pals

In Musk v. Twitter, a part of the business life of the richest man in the world is revealed. Private messages exchanged with his inner circle immerse us into his process when he conceives an idea. The messages were released by the Delaware Chancery Court as part of the proceedings between the two parties.

Motley Fool

Warren Buffett’s Buying This Passive Income Stock

Warren Buffett is an all-time great of Wall Street, so investors perk up when the Oracle of Omaha adds a new position to his portfolio. Medical products distributor McKesson Corporation (NYSE: MCK) became one of Buffett’s newest holdings this year; he started a position in the first quarter of 2022 and added to it last quarter. Healthcare is one of the world’s most complex and fragmented industries; McKesson is a healthcare products distributor whose job is getting vaccines, medical supplies, and other products from manufacturers to the professionals that treat patients.

The Bad Year of Chipmakers AMD, Nvidia and Intel Turns Into a Nightmare

The year 2022 has been a painful journey for semiconductor manufacturers. Following the example of AMD , Nvidia and Intel , which are the three main players in the sector, 2022 is a year to forget .Their valuations are in recession. Advanced Micro Devices (AMD) currently has a market value of $94.4 billion, which is a decrease of at least $83 billion compared to December 31, 2021.


Americans’ Top Reasons for Buying Life Insurance

Life insurance helps protects family members and others against the financial impact of the policyholder’s death. While many people don’t have life insurance, it can be a good idea for many others looking to protect their family’s future. Primary earners … Continue reading → The post Who Needs to Buy Life Insurance? appeared first on SmartAsset Blog.

PayPal Sets Social Media Ablaze with Major Change

PayPal is in trouble. “You are independently responsible for complying with all applicable laws in all of your actions related to your use of PayPal’s services, regardless of the purpose of the use,” the document, called “Acceptable Use of Policy,” said.

Leave a Reply

Your email address will not be published. Required fields are marked *