When it comes to investing in precious metals, gold and silver are two of the most popular options. Both have attractive features, but gold is generally considered to be the better investment for the average investor. Gold has a much larger liquid market that is driven mainly by investment and demand for jewelry, and its price is less volatile than that of silver. Gold also has a much higher correlation with the stock market than silver, making it a more stable option for diversifying your portfolio.
Investing in gold is a great way to mitigate portfolio risk and store wealth. Gold prices tend to move at a slower pace, providing investors with a level of security. If someone already owns a good amount of gold, an investment in silver may be the best option for diversification purposes. Silver is more volatile, cheaper and more closely linked to the industrial economy, so it can be a better investment under certain conditions.
The best way to invest in gold or silver is to purchase physical metal such as bullion and coins. You can buy small denominations of coins and gold bars (from half an ounce to one-twentieth of an ounce in some cases), but premiums increase for products under an ounce. Alternatively, you can invest in precious metals through financial products such as gold exchange-traded funds (ETFs). Some of the most popular ETFs include SPDR Gold Trust (GLD), iShares Gold Trust (IAU) and iShares Silver Trust (SLV).
Whenever there is news that hints at some kind of global economic uncertainty, investors often buy gold as a safe haven. This act began to establish the idea that gold or gold coins were no longer needed to serve as money. If you object to owning physical gold, buying shares in a gold mining company may be a safer alternative. In conclusion, both silver and gold are assets that are not correlated with other securities, but gold has even less correlation with the stock market than silver.
Gold is considered to be the ideal metal for storing wealth due to its stability and liquid market, making it the best investment for the average investor in precious metals.