Which Is Better - Gold Investment Or Silver Investment?
June 11, 2019
If you are planning to invest in precious metals in India, gold and silver are the two obvious choices. But apart from the prices, what are the other significant differences between the two that an investor should know about? Read this post to know more.
Precious metals add much diversification to the portfolio and is also an excellent hedge against inflation. While gold is often the go-to precious metal in India, silver investing is also gaining popularity. However, if you are planning to invest in precious metals, which one should you select between the two? Let us have a look at some crucial points that can help you make the decision.
1. Price Volatility of Gold and Silver
While you might know that gold is significantly more expensive than silver; what you might not know is that the price of silver is also more volatile. Lower cost of silver means that it takes a comparatively lower amount of money to create a significant impact on silver prices. You can check the price of silver contracts on commodity markets like Multi Commodity Exchange (MCX) in India for a few days to know how volatile the price of silver can be. In gold versus silver comparison, the price of gold is not as volatile. This makes gold an ideal investment, even for shorter investment tenures.
2. Storage and Safe-Keeping
As compared to gold, silver is a less dense metal. As a matter of fact, if you are buying pure silver, its volume is around 80% more than that of gold. This means that investing in physical silver will also require you to have more storage space. Most people investing in gold and silver in India prefer storing them in bank lockers. If you are going with silver, you will need more locker space as compared to gold, which means higher locker charges.
3. Tackling Financial Emergencies
If you are creating an investment portfolio, there should at least be a few assets that could be sold instantly to tackle financial emergencies. Precious metals are an excellent example of such quick-selling assets. Gold is a better option for bigger expenses, such as purchasing a car or down payment of a new home. Silver, on the other hand, is excellent for smaller expenses such as buying a new mobile phone or a two-wheeler.
4. Investment Options
Both gold and silver are now available in multiple digital options apart from physical purchases. There are now Exchange Traded Funds (ETFs), precious metal contracts on exchanges, mutual funds and more through which you can invest in these metals without making a physical purchase.
But as compared to silver, there are more investment options for gold in India. Not just in numbers, the gold investment options in India are highly convenient and readily available too. For instance, banks now offer digital gold, which allows investors to start investing in gold with as little as Re 1. This gold can be kept in digital format or can also be changed to physical gold.
Gold or Silver: What Should You Select?
While silver investment is getting popular now, gold has and continues to be the beloved precious metal in India, not just for jewellery but investment too.
Products like digital gold have made gold investment more affordable and eliminated the need to worry about storage and safe-keeping. If you are planning to invest in precious metals, consider the points discussed in this post to make the right decision.