The Premier Silver Resource Website
Visit GoldSeek.com
Visit GoldReview.com
Visit UraniumSeek.com

- CLICK HERE TO VISIT THE NEW SILVERSEEK.COM -
Live Spot Silver
Navigation
Silver Market Articles
Silver Discussions at the Forum
Silver Company Links
Silver Market Updates
Silver & Gold Headlines
Silver Stock News
Silver Equity Quotes
Silver & Precious Metals Quotes







 
What are the Differences between Investing Silver and Gold?

By: Dr. Jeffrey Lewis



-- Posted 14 July, 2010 | | Discuss This Article - Comments:

The traditional rule that gold always trades within a range of 20 to 70 times the value of silver may quickly be tested as the financial markets lose their fear and again start investing in stocks, bonds and other investments. 

 

Silver and Gold Comparison

 

When it comes to protecting your wealth against financial turbulence and inflation, both metals are strong.  However, when we look at underlying fundamentals that drive consumption for both metals, we find they are very different. 

 

Silver and gold both have uses in manufacturing and electronics, where they are often used to coat cables and make better connections on circuit boards, electrical wiring, or virtually any product where a quality connection is important.  Both perform well, but silver performs best and is more widely used than gold.  Silver is the best conductor of electricity known to mankind, and at the current price of just $18 per ounce, the beauty of silver's uses have yet to shine.

 

Why Buy Silver?

 

The amount of silver is slowly dropping each year, as supply from mining and scrap has not kept up with consumption for years.  From electronic watches and calculators to full-scale laptops, silver is used as the best way to transfer energy from one part to the next. 

 

Since it is so relatively inexpensive when compared to gold, nearly all of the silver used in manufacturing will not be recovered before the device makes it to the graveyard.  Thus, in knowing this fact, we can infer that all of the silver used in manufacturing businesses is then later discarded by the consumer in such a fashion that it is too expensive to extract to be profitable.  Subsequently, the supply shrinks as it is used, and investors who own silver as an investment slowly own more and more of the silver pool by percentage with each passing year. 

 

Jewelry Consumption

 

The undisputed king of the jewelry business is gold, which makes up the overwhelming majority of all jewelry made around the world.  It is important to note that gold or silver used in jewelry rarely gets thrown in the trash like it does in electronics, even if the amount of silver in a ring is the same as in a laptop!  Why is this? 

 

Jewelry by nature sells for a premium to the spot price, and almost always retails for far more than its metal content.  However, as metals prices have increased, melting jewelry has become far more popular, and hundreds of tons of gold were purchased by melting companies to extract the intrinsic worth from jewelry.  The good news is that jewelry is not and probably won't ever be silver's main use, and more of it is likely to escape into manufacturing than in the small jewelry market.  Even here, silver reigns supreme over gold.

 

Don't Get Confused

 

Metals have tended to be excellent investments as hedges against inflation, but some have better credentials than others.  With its vast uses, limited supply, and relatively low price, silver is an excellent investment that will continue to not only outperform the stock markets, but also other precious metals. 

Dr. Jeffrey Lewis

 

www.silver-coin-investor.com


-- Posted 14 July, 2010 | | Discuss This Article - Comments:



Article Archives

SilverSeek.com is presented to you by:

© 2003 - 2011
SilverSeek.com, Silver Seek LLC

The content on this site is protected by U.S. and international copyright laws and is the property of SilverSeek.com and/or the providers of the content under license. By "content" we mean any information, mode of expression, or other materials and services found on SilverSeek.com. This includes editorials, news, our writings, graphics, and any and all other features found on the site. Please contact us for any further information.

Disclaimer

The views contained here may not represent the views of SilverSeek.com, its affiliates or advertisers. SilverSeek.com makes no representation, warranty or guarantee as to the accuracy or completeness of the information (including news, editorials, prices, statistics, analyses and the like) provided through its service. Any copying, reproduction and/or redistribution of any of the documents, data, content or materials contained on or within this website, without the express written consent of SilverSeek.com, is strictly prohibited. In no event shall SilverSeek.com or its affiliates be liable to any person for any decision made or action taken in reliance upon the information provided herein.