Silver is more volatile than gold The volatility of silver prices can be two to three times higher than that of gold on any given day. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people achieve financial freedom through our website, podcasts, books, newspaper columns, radio shows, and world-class investment services. Silver has a much lower density than gold, with pure silver being up to 84% larger in volume than pure gold. This means that storing silver reserves requires much more space than gold — and this entails significant storage, logistics and associated costs.
The following should help you understand the terms and potential advantages and disadvantages of investing in gold and silver. The prices of gold and silver are so unstable (and have been over time) that in an economic crisis, we can only hope that someone would take your silver coins or watch in exchange for a pack of toilet paper or a can of gas. The differences in size between gold and silver may not seem too important from an investment point of view. Not to sound like a broken record here, but just like gold and silver, platinum isn’t the investment you’re looking for.
In addition, compared to gold, silver requires very specific storage conditions (to avoid tarnishing) and that safe and long-term management of raw materials may require careful planning and budgeting. When the world seems to be going crazy and the news cycle is constantly filled with bad news, you might be tempted to make some stupid financial decisions, such as opting for a “better exchange system” based on commodities like gold or silver. Investing in gold and silver may sound comparative, but in reality, there is a lot that sets these two precious metals apart. Silver coins and bars must therefore be stored in a dry place without being exposed to the elements, a problem you don’t have with gold.
You avoid the hassles that come with storing and selling physical gold and silver, and you can also earn dividends. At current prices, the same dollar investment gives you around 80 more ounces of silver than gold. Not only are investors driving up gold prices in a bear market, but the yellow metal is also relatively isolated from a slowdown in economic activity because industrial applications are so limited. When you buy physical silver, not ETFs, certificates, or futures contracts that are paper investments, you can enjoy the same benefits that gold offers.
Gold and silver may have similar boom-and-bust cycles, but there are a few key differences to consider when deciding whether to invest in gold or whether it’s relatively easy to hide some gold coins in a sock drawer or cookie jar, but the same hiding places aren’t practical for the same investment in silver.
