Saturday, April 08, 2006

Gold vs. Silver

Sometimes, when it comes to what to buy, it is a case of gold vs. silver. Both are equally a good investment but which one could you call the best?

There are two prime factors that will influence whether to buy gold or silver. They are affordability and taste.

For some people it is gold all the way. Even if they cannot afford the one ounce gold coins or gold bars there are smaller coins such as the one tenth gold coins, which are more affordable. Unfortunately they also command a higher price in proportion as the mint's or dealer's mark up has to be added, plus expenses, shipping etc. Usually, the smaller the coin, the higher the additional costs are in relation to it.

The cost of the gold if you are buying 5 ounces or a kilo of gold coins or bars is much less than if you buy a one tenth ounce gold bullion bar.

Economically for some people, silver is the way to go. An ounce of silver is affordable for just about anyone. Silver is currently running at around 12 USD per ounce. A big difference to gold at 550 to 600 USD an ounce. It is possible to buy one kilo silver coins as well as one or two ounce coins. If you are buying silver purely for the silver sake and not interested in it from a coin collector's point of view, then junk silver or bags of old silver coins may be the way to go. Keep in mind that there is usually a higher margin above spot price for buying silver from a mint than for buying gold.

The other option is to strike a balance and buy both gold and silver. Perhaps buy some gold coins to keep for the long term maybe more infrequently and, on a more regular basis, buy silver coins. This can be a happy medium. If the need ever comes to sell but you do not want to sell your gold you can always sell small amounts of silver to tide you over and still retain your most valuable asset.

So when it comes to gold vs. silver, there really is no contest. Each have their place and each have their advantages.

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