- 13
- Aug.
- 2024
Investment: Torn Between Gold and Silver Bars
modified on 02 Sep. 2024 à 10:29 Read : 2 minute(s) A A A
JP Morgan experts believe that gold and silver are the most promising metals of the year, forecasting that the price of silver will soon surpass $30.
While the price of an ounce of silver recently hit a high of $30, a level not seen since 2013, it still hasn't reached its historic peak of $50, recorded in 1980. Deciding between investing in gold or silver bars can be challenging, but the core principle of asset diversification remains crucial in any situation. Predicting whether silver will outperform gold in the short term is difficult, as price movements are influenced by a range of variable factors.
As a precious metal, silver often mirrors the fluctuations of gold during periods of economic uncertainty, as both are regarded as safe havens. Silver and gold are also seen as hedges against inflation, typically preserving their value better than the US dollar over the long term. However, this is not a hard-and-fast rule.
Reliable Supply
Silver is an appealing investment option because it combines the qualities of precious metals, like gold, with those of industrial metals, such as copper. Traditionally used in electronics manufacturing, silver's current investment appeal is partly driven by the increasing demand from the solar panel industry, as the world shifts away from fossil fuels and moves toward more renewable energy sources.
Even with growing demand, the supply remains adequate since silver is found not only in silver mines but also in copper and zinc deposits. In fact, silver is 18.75 times more abundant in the earth's crust than gold. Additionally, extracting silver is generally easier than mining for gold.
Paying Commissions
For Lebanese investors contemplating silver bars, it's important to note that the silver market is less liquid than the gold market. Investors also need to pay a commission both when purchasing and selling silver, whereas with gold bars, the commission is only charged at the time of purchase.
Furthermore, gold has a density of about 19.32 g/cm³, while silver's density is around 10.49 g/cm³. This means that for the same weight, gold takes up less volume than silver, thus requiring less storage space.
In this context, a silver bar is valued at approximately eighty times less than a gold bar. Consequently, an investor placing $80,000 would need to buy 1 kilogram of gold compared to 80 kilograms of silver.
Nevertheless, the principle of “cash is king” remains especially relevant during periods of economic uncertainty or declining financial markets, offering the flexibility needed to capitalize on available opportunities.
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