Invest in gold and silver

Kevin Mercadante. Each comes with its own set of benefits and costs. Why Invest in Gold and Silver? There are several answers to this question. Nations, kingdoms, and empires have come and gone over the past 5, years, and their currencies have disappeared with them. But gold has continued to function as a medium of exchange and a store of wealth through it all.

How to Invest in Gold and Silver: A Beginner's Guide

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Bank, and Barclaycard, among others. What was once only watched by central banks, insurance companies, and gold miners suddenly has become as mainstream as IBM and Microsoft. In fact, I would say that gold is even bigger. The average small retail investor can easily invest in gold through exchange traded funds, or ETFs.

But what about other precious metals? What about silver? Silver has had an impressive run up in price as well, and may even have more upside than gold over the coming months and years. Silver had an incredible run, just like gold, from to Silver has many traditional industrial uses. Historically, silver was a key component in film used in most cameras. The rise of digital cameras , however, has practically made film obsolete, but the development of cell phones and other technology has helped fill the void.

Silver is used in virtually every electrical appliance in the world due to its low resistivity. Photovoltaics, the method by which solar radiation is converted to electrical power, requires silver for both semiconductors and solar panels. Other new silver applications include use in wood preservatives, water purification, and food hygiene. Gold, on the other hand, has limited industrial uses.

Jewelry, particularly in developing countries like India, accounts for over two-thirds of annual gold demand. Even luxury items have a point at which people stop purchasing them. Products like consumer electronics and solar technology, however, seem to still have tremendous upside.

This is because they use silver which is still quite reasonably priced, relatively speaking. Therefore, it seems unlikely that cost will be a limiting factor when it comes to the industrial uses for silver. The same, however, can not be said for gold. As stated previously, gold is viewed as a store of value, and rightly so. History tells us that having too many investments denominated in one currency is a recipe for disaster.

As gold has risen in value over the last decade, the value of the U. This is due to two main factors:. While gold is still the preferred vehicle as a hedge against fear, silver has a growing appeal as a safe haven.

As investing in silver becomes easier, more people may try to take advantage of that play to protect their portfolio. Several years ago, a Tennessee bullion dealer named Franklin Sanders set out to determine the historical average price of gold related to silver. In his research, going back to , he found the price of gold was steadily 16 times that of silver over years.

Interestingly, after the creation of the Federal Reserve in , the ratio started to fluctuate more. In the last years, the ratio of gold to silver has been as high as This fluctuation has caused the historical average of the ratio to rise to Many traders believe that financial ratios, especially those that are based on widely traded and historically significant products like gold and silver, return to these historical patterns.

Silver bars of troy ounces weigh approximately 6. Their flat shape makes them suitable for storage in a home safe or safe deposit box. While some people still purchase bars, coins are far more common. The two most popular silver coins are the one-ounce, These collectible coins include dimes, quarters, halves, and one-dollar pieces. There are ETFs for crude oil, natural gas, gold, silver, and a host of other products. Buying and selling these products allows you to participate in the price movement of silver without actually getting a piece of metal, which is much more convenient for many investors.

Purchasing shares in companies that mine for silver is another way to gain exposure to the silver market. Companies rarely mine silver alone, as silver is often found within or alongside ore containing other metals such as tin, lead, zinc, or copper.

Therefore, shares of stock in mining companies give you exposure to many base metals. These companies generally make more money as the price of base metals rise, so their stock price tends to rise and fall in line with the price movement of the underlying metal market. Never trade over your head, and always trade for the long-term. The extreme volatility of worldwide markets, the European debt crisis, and the Great Recession have all contributed to a higher level of fear in the investment world than in years past.

Owning gold and silver can be a valuable hedge against economic instability and can help to balance your portfolio, especially in terms of dollar risk. All Rights Reserved. Sign in. Forgot your password? Get help.

Password recovery. Money Crashers. About Money Crashers. Recent Stories. Read more. Advertiser Disclosure X Advertiser Disclosure: The credit card and banking offers that appear on this site are from credit card companies and banks from which MoneyCrashers. Evan Pierce. Views Shares Share This Article.

Join Our Facebook Group. Dig Deeper. Follow MoneyCrashers. Trending Articles. Become a Money Crasher! Join our community. Buying Silver vs. Share this Article. The Market for Silver and Gold Silver had an incredible run, just like gold, from to Industrial, Commercial, and Consumer Demand Silver has many traditional industrial uses. Central Banks, Fear, and Financial Stress As stated previously, gold is viewed as a store of value, and rightly so.

This is due to two main factors: The U. Countries, such as China, that hold trillions of dollars in U. So what do they do? They buy gold, essentially swapping some of their dollar risk for gold risk. Mining Companies Purchasing shares in companies that mine for silver is another way to gain exposure to the silver market. Is Silver a Good Investment? Evan Pierce Evan Pierce has spent nearly 20 years as a commodity trader and market analyst.

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Gold and silver have been recognized as valuable metals, and have been coveted for a long time. Even today, precious metals have their place in a savvy investor's portfolio. But which precious metal is best for investment purposes? And why are they so volatile? There are many ways to buy into precious metals like gold, silver, and platinum, and a host of good reasons why you should give in to the treasure hunt.

When done properly, diversification can increase the rate of return you can expect from a given amount of total risk, or decrease the risk required to achieve a given rate of return.

Are you investing in gold? Then can we suggest reading how the gold markets work? We can show you clearly how to buy the most trusted form of gold in the world, at the best prices, and in the safest, easiest way.

Investing in Gold

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Investments in gold and silver

Looking to invest in physical gold or silver but not sure where to start? The Pure Gold Company provides a consultative approach to gold investment, for both seasoned investors and beginners. If you have any questions or would like to make a purchase please call us on or email info thepuregoldcompany. Why Gold Why Buy Gold in ? Why silver Why Buy Silver in ? Physical vs Paper Electronic Metals. Press Featured in the Press Our Blog. Investments in gold and silver Looking to invest in physical gold or silver but not sure where to start? Tax Free Silver.

Investors always try to diversify their investments and lower their risk. They especially look for so-called safe haven investments that perform better when the rest of the market down.

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Buying Silver vs. Gold as an Investment – What’s Better?

In general, investors looking to invest in gold directly have three choices: they can purchase the physical asset , they can purchase shares of a mutual or exchange-traded fund ETF that replicates the price of gold , or they can trade futures and options in the commodities market. Average investors, for example, might buy gold coins, while sophisticated investors implement strategies using options on gold futures. Compared to other commodities , gold is more accessible to the average investor, because an individual can easily purchase gold bullion the actual yellow metal, in coin or bar form , from a precious metals dealer or, in some cases, from a bank or brokerage. Bullion bars are available in sizes ranging from a quarter-ounce wafer to a ounce brick, but coins are typically the choice for new investors. For maximum liquidity, most buyers stick with the most widely circulated gold coins , including the South African Krugerrand, the American Eagle, and the Canadian Maple Leaf. Gold coins obviously require safekeeping—either a home safe or a bank safe deposit box. Be sure to insure them, too. Jewelry is not typically the best option if it's strictly an investment, because the retail price will usually far exceed the meltdown value. Although it's more feasible than, say, a barrel of oil or a crate of soybeans, owning physical gold has its hassles: transaction fees, the cost of storage, and insurance. Investors interested in a more liquid and low-cost entry into the gold market might instead consider mutual funds and exchange-traded funds that replicate the movements of the commodity. Each share of the ETF represents one-tenth of an ounce of gold. GLD invests solely in bullion, giving investors direct exposure to the metal's price moves. Generally, gold stocks rise and fall faster than the price of gold itself.

A Beginner's Guide to Precious Metals

Advertiser Disclosure: The credit card and banking offers that appear on this site are from credit card companies and banks from which MoneyCrashers. This compensation may impact how and where products appear on this site, including, for example, the order in which they appear on category pages. Advertiser partners include American Express, Chase, U. Bank, and Barclaycard, among others. What was once only watched by central banks, insurance companies, and gold miners suddenly has become as mainstream as IBM and Microsoft. In fact, I would say that gold is even bigger. The average small retail investor can easily invest in gold through exchange traded funds, or ETFs.