As the price of gold and silver reached records in the past weeks, the question that investors may ask themselves is: Gold or silver?
On Thursday, gold’s price breached $4,300 per ounce, a new record. Meanwhile, silver closed at $54.20 per ounce the same day, also a new record.
However, the price of silver went down by 6 percent the next day, or to below $51.96 per ounce in a dramatic market correction.
Also, the spot price of gold went down by 3 percent also on Friday.
Before gold’s price reached the $4,000 level, Goldman Sachs projected the price of the commodity reaching $4,900 before the end of 2026. Hence, the decrease in the price of gold can be seen as a correction and not necessarily a start of a decline.
PRICE DRIVERS
The rise in the price of gold is driven by the US Federal Reserve reducing policy rates, making interest-based investment instruments less attractive. This also makes gold a safer investment.
Also, central banks are also buying gold to bolster their reserves amid global economic uncertainties, including the economic and trade policies of US President Donald Trump.
“Mounting concerns around the Fed’s independence, political uncertainty, trade tariffs, geopolitical tensions, and ballooning debts will continue to keep strategic investment interest strong for gold,” ANZ said.
Meanwhile, silver is driven by industrial applications, including the manufacture of photovoltaic solar panels. On the other hand, gold is more of a storage of value.
“The metal’s (silver) dual role as both precious metal and industrial commodity creates amplified volatility patterns during sentiment shifts. Unlike gold, which primarily serves as a monetary metal and store of value, silver faces additional demand and supply dynamics from industrial applications,” an article posted in the website https://discoveryalert.com.au said.
Circuit boards, vital in many electronic gadgets including mobile phones, also use silver.
PURCHASING
Buying gold or silver, however, presents certain challenges compared to acquiring equities or publicly-listed stocks, which are readily available through exchanges.
When it comes to purchasing gold or silver, the recommendation is to go for bullions or bars, as these have lesser processing costs compared to jewelry or artworks.
And while there are vast offerings of gold and silver over e-commerce sites, it may be better to purchase directly from sellers in face-to-face transactions. But be aware of the dangers of trading gold or silver, as there have been numerous accounts of scammers in the Philippines selling gold bars that are merely bricks coated with gold.
The wonder of investing in gold or silver is it hardly leaves a paper trail, unlike stocks or traditional investment instruments. This means that personal wealth stored in gold or silver can remain “invisible” in one’s statement of worth.