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What is a better investment acquisition? Gold or silver?

By July 11, 2019 No Comments

We all wonder at some point what to add to our portfolio stack next, gold or silver? And of course, Allegiance Gold’s answer is “it depends.”

When considering gold and silver for investment, it’s important to understand the differences that separate them and the commonalities that bind them. Gold and silver are both elements that cannot be chemically broken down. They are both useful, desirable and relatively rare to the extent that they have been storing value throughout human history.

What differentiates gold and silver?
Mainly, demand for silver comes from industrial processes. Among other unique and useful properties, silver is the best conductor of heat among all metals and an excellent conductor of electricity. Its anti-microbial properties make it useful in a variety of medical and consumer products.

On the other hand, the primary uses of gold are investment. For instance, central banks and nations hold gold as key reserves while institutions and individual investors invest in gold to insulate from and insure against economic downturns and collapse. Gold jewelry is often used as generational wealth that is passed down within families.

Now, although the gold market is huge and is valued at $2.4 trillion dollars according to the World Gold Council, its market has a depth and liquidity rivaled only by the largest sovereign debt markets. Every day a large amount of gold is traded to make the market move a substantial amount while silver’s market is much smaller with an annual demand valued at $15.2 billion dollars. The relatively small size of the silver market, along with its lower liquidity (compared to gold), means that the price of silver tends to move up a great deal more than gold in a precious metals gold market.

So, what to invest in, silver or gold?
Well, taking today’s circumstances into account, silver represents the greater value. A bull market in the precious metals will be entered into sooner rather than later, where silver will probably have greater upside than gold. However, if price volatility is something you shy away from, gold may be the way to go. However, Allegiance Gold strongly believes that acquiring both is the ideal investment. Both will hedge against market instability and both are considered a great wealth preservation option during inflation, dollar devaluation and market depression. One thing is for sure, Allegiance Gold feels more comfortable holding physical gold and/or silver, a class of assets that will consistently maintain its value, than holding fiat paper assets that, in many instances, can greatly devalue or become worthless.

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