Silver is more volatile, cheaper and more closely linked to the industrial economy. Gold is more expensive and better for diversifying your overall portfolio. One or both of them may have a place in your wallet. Arguably, the best use of gold as an investment is to mitigate portfolio risk.
Both silver and gold can function as safe haven assets, but gold tends to have a better track record over longer periods of time. That said, in shorter periods, the specific dynamics of each market end up being more important for their respective returns. Regardless of the asset you buy, remember that neither asset generates cash flow, so the best thing for long-term investors would be to take a buy-and-hold approach with a profitable and growing portfolio of stocks. Gold and silver prices tend to move in the same direction, but gold is a better hedge against the recession.
You'll avoid the headaches involved in physically storing and selling gold and silver, and you'll also be able to earn dividends. Demand for gold and silver comes from different sources, with gold being primarily an investment asset and silver an industrial asset. Not only is gold worth significantly more per ounce than silver, but it's also the denser of the two metals, making a specific volume of gold worth much more than an equal volume of silver. The commonly accepted reasons why gold is more expensive than silver, despite its relative abundance, are that gold is used more in jewelry, gold is considered more of an “alternative currency” than silver, and central banks and individual investors demand it more than silver.
While many investors are looking for gold and silver in physical form, such as ingots or coins, investing in mining stocks is usually a better option. While gold and silver have similar boom-bust cycles, there are some key differences to consider when deciding whether to invest in gold or.