Is Silver a Better Investment Than Gold?

Precious metals, such as silver and gold, are generally accepted as solid investments. Purchasing precious metals has long been considered a wise means of diversifying an investment portfolio and hedging, to a degree, against equities. Precious metals are particularly able to withstanding the pressures of inflation, war, and other economic fluctuations that can often devalue other investments.

Buying precious metals is a means of preserving your financial resources and protecting them against economic downturns. Of the precious metals most commonly traded on the market, silver offers the most benefits for the average investor and is viewed, by many, as the safest investment.

The Growth of Gold and Silver

While both metals tend to show growth during precious metal bull markets, silver has consistently shown the largest percentage increases during these times. For instance, between 1971 and 1981, while the dollar slowly dropped, silver increased in value nearly 5 times. It has not been uncommon, in precious metal bull markets, to see the metal triple or quadruple in value while gold only doubled.

One of the reasons for silver’s consistent percentage gains over gold is that silver has more industrial uses than gold, with more industrial applications for silver being developed all the time. Silver is already being used in industrial brazing and soldering, catalysts for chemical reactions, bearings, batteries, electronics, and other crucial purposes. There are also a number of emerging medical applications for silver, as well as potential uses in solar energy, water purification, protective coatings, and more. All of this is in addition to the long-standing traditional uses of silver in photography, currency, jewelry, place settings, and more.

The Usage of Silver

Not only is the need for silver for industrial use increasing, there is not enough silver to meet current demands. Despite increased silver mining, as well as silver recovery and reclamation efforts, industrial demands have exceeded silver production for over 20 years. As with anything else, as the demand for silver continues to exceed the available supply, the cost of silver continues to rise.

Since the 1990s, when silver production and recovery first began to fall behind industrial demands, the supply of above ground silver – silver in circulation or privately held – has steadily declined. In Zurich and in London, estimated silver supplies have dwindled from approximately 350 million ounces in 1991 to around 50 million ounces today. Comex supplies of silver are down from approximately 260 million ounces in 1995, to 100 million ounces. Very few world governments even hold silver stockpiles, anymore, and it is a commonly accepted fact that the weight of the gold locked away in the world’s leading banks far exceeds the amount of above ground silver in existence.

While the steadily declining supply of silver may not bode well for industry, at large, it is good news for investors in precious metals.With demands for silver continuing to exceed that which is readily available in production, silver is almost certain to continue to gain in value more quickly than gold or any other precious metal. As long as there are vitally important industrial applications for silver and ever-increasing demands on the limited supply, silver should remain a solid investment.

Source by Terry Sacka

Is Silver a Better Investment Than Gold?