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Home >> Why Buy Gold Versus Silver? Why Buy Silver Vs. Gold?

Author: Gold Why Webmaster
Updated: February, 2012
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The name of this site is Gold Why so you definitely know that I'm a huge fan of gold bullion. However, as you read through the articles on this site, you'll also learn that I have diversified into other metals such as platinum bullion, silver bullion, and even copper bullion. Since gold and silver are the two most popular precious metals out there, I'll spend today's article talking about the two metals versus each other with the goal of pointing out the pros and cons of owning these two metals.

Gold Versus Silver - Gold Pros

The pros of owning gold bullion coins are plentiful. You can learn all about the pros in detail by reading my top 10 reasons to own gold coins. Here, I'll summarize some of those points (and add some new ones), especially through the perspective of gold vs. silver. The first big gold pro that comes to mind is portability and concentration of wealth. The current price of gold values just one ounce of this yellow metal at $930. Looking at the current price of silver, you're only storing $14 of wealth in your one ounce coin. How amazing is that! Gold is just about the best physical concentration of wealth out there - you can pack a lot more into a small space which makes hiding gold a lot easier than hiding silver.

Another huge pro of gold versus silver is durability of beauty. Silver bullion bars and coins can tarnish easily. You need to keep them guarded in plastic sleeves and avoid touching with the oils of your skin. Otherwise, your silver coins can quickly lose their luster. Gold, on the other hand, is difficult to tarnish. You can hold your gold directly with your bare hands without risk of damaging your metal. One word of advice however: Be very careful with your 24 karat gold coins because they can dent and scratch easily, something we'll talk about more later.

Last, and perhaps the greatest pro of gold vs. silver, is gold's stability. Despite a rough metals market and declining prices of silver, platinum, and palladium, gold price has been consistent and solid in the $900 per ounce range. I like gold as a more stable metal. Why is the price so stable? All around the world, gold is the precious metal of choice. There's no denying gold's beauty and it's worldwide appeal.

Gold Vs. Silver - Gold Cons

Gold's biggest downsides? This section is hard to write because I'm a true gold bug, obsessed with the beautiful yellow metal. Reluctantly, let me start... As already alluded to earlier, 24 karat gold can dent and scratch easily. If you're buying Gold Buffalos or Gold Maple Leaf coins, you need to be extra careful to keep them in their protective plastic sleeves. Moreover, you will want to keep them stored in a safe location (such as your safe deposit box) where they will stay still and protected. Want some more durable gold bullion coins? I recommend going with South African Krugerrands or American Gold Eagles.

Another con of gold coins? They sure are expensive these days! While it's great to have such a concentration of wealth, this also makes gold coins inaccessible to many investors? My solution: Try buying some fractional gold coins. Fractional gold coins are an awesome investment (just my personal opinion, not a licensed investment advisor) because of their small size. As the price of gold continues to appreciate, fractional gold coins will carry a higher and higher premium over their larger counterparts in my opinion. Want to learn more? Check out pictures of my personal 1/2 oz Krugerrand and my 1/10 Ounce Gold Eagle. I just love buying these coins. Funny how I'm writing about the cons of owning gold, but quickly turn them into pros!

Silver Versus Gold - The Pros of Silver

Now, it's time to flip the tables and discuss silver. We'll start with the things I like most about silver. One of the very obvious ones is not only price, but value. There's no way around it, at $14 per ounce, silver is cheap right now. Silver has trended down quite a bit from its recent highs, unlike gold. Fundamentally, nothing has changed. Silver is a rare precious metal and I look at this as a buying opportunity. How have I been getting my hands wet with silver investing? I found the awesome niche of silver art bars and fell in love.

Another pro of owning silver is its value in a time of crisis. I truly hope it will never come to this, but the fact that silver's value is not as concentrated makes it a much better currency for average purchases. If our financial system collapses, it's unlikely you will be able to easily "make change" for your gold coins. Moreover, your gold coins will be too valuable to cash in for normal purchases such as food. This is where silver comes in! It's a cheaper metal and the perfect concentration of value for these types of scenarios. My recommendation: Build up an emergency stash of silver carefully hidden where you can get it in a time of emergency. I wouldn't go to crazy, but 25-100 one ounce silver coins (Silver Eagles make a great choice) will serve you well.

Silver Vs. Gold - Silver Cons

I've already mentioned a few of them so far, but I have one closing con for silver: Silver's price carries a higher markup versus gold. It makes natural sense - bullion dealers need to make money, they need a margin. Because silver coins are starting in the sub $20 range, they need to mark up the price, as a percentage, higher than gold. As you buy more and more silver coins and bars in bulk, your dealer can definitely give you a price cut where the markup approaches that of gold. To be fair, you're also going to see a high markup on fractional gold coins (unless you buy a lot of them at once). Again, this is to give the gold dealer a margin of profit. My advice: When you can, buy in bulk. I know it's not always easy. Moreover, it's not always fun to go that route. I like to drop by my coin shop and pick up a coin here and there because I believe it brings luck and it's just plain fun. That's it! Hoping this has helped clarify gold vs. silver through my personal lens. I own both metals and will continue to purchase both. Both gold and silver belong in all well diversified precious metals portfolios.

Want to see the differences of gold versus silver for yourself? I just uploaded a HD quality Gold Why video that features my 2005 one troy ounce Gold Eagle versus my 2008 one troy ounce Silver Eagle. Check out my Gold American Eagle Video today! Like this pros and cons article and want to read all about 22 karat versus 24 karat gold bullion coins? I just uploaded a new article about 22 Karat Versus 24 Karat Gold Coins.

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