Whether you are an industry veteran or new to investing in precious metals, there is always the question of whether gold or silver is a better buy at any moment. At the time of this writing, the price of gold is near an all-time high at $2,033.50 per ounce, while silver is trading at a healthy $25.77 per ounce (click links to see current prices).
Many factors today could increase metal prices, making it an exciting time to buy gold and silver. When deciding what to invest in next, it can take time to determine which metal is better. There are a few ways that you can make a rational assessment.
Investing In Gold In 2023
At the time of publishing, gold is a bit high at $2,074 an ounce. Even though gold prices are high, the continuing uncertainty caused by world events could drive up prices further. Ongoing geopolitical and economic issues, such as banking crises, war, de-dollarization, and strong central bank buying, are significant enough to influence gold prices and are critical for investors to watch.
If you are considering investing in gold right now, looking at options with lower prices would be wise. For example, the 1-ounce 2023 Gold Britannia is listed at $2,123.69 on APMEX.com, whereas a 1-ounce 2023 Gold American Eagle is listed at $2,204.79. When shopping for gold, compare prices of comparable products to ensure you get the best deal for your money.
Investing In Silver In 2023
Silver may offer investors a better return at this point. Silver’s spot price is about half its former all-time high. Silver’s all-time high was about $50 an ounce. The spread on silver is steep, with premiums on products varying wildly. Suppose you are investing in silver purely as a financial asset and have no interest in collectability or design. In that case, you are probably looking for silver bullion with the lowest premium possible. Remember that prices can increase dramatically based on the product for many reasons, such as design, mintage, and supply shortages.
If you want to buy silver purely as a financial asset, the 1-ounce Silver Buffalo round is a great option. It is easy to liquidate, has an artistic design, and has lower premiums. The Silver Buffalo is currently trading at $30.56 on apmex.com, meaning the premium is about $5 over the spot. So, the silver premium is around 20% for generic silver. It can increase depending on what you buy, so be aware when selecting a product.
Will Silver Ever Dramatically Spot at Over $30?
There is a precedent for silver’s spot price to exceed $30. Silver has long-term industrial demand for electric cars and solar panel manufacturing. With a growing push for more green technological solutions, the industrial demand for silver will likely remain steady or even increase.
Additionally, the silver supply is somewhat constrained. Only 25% of silver mines primarily mine for silver, while the other 75% are mines designated for other minerals, including gold, copper, lead, and zinc. Since some mines are not primarily after silver, a portion of the silver supply could go untapped despite increased demand for the metal.
With a rising market, a silver shortage, an inelastic supply, and the precedent of silver prices going over $30, the odds are good that current silver prices will continue to rise. When silver prices are high, is the optimal time to make a return on your investment.
The only downside to silver is that while its industrial use is a strength, this use can also be a weakness in times of recession. As the production of certain products, like vehicles, can diminish in an economic downturn, silver consumption for industrial purposes also wanes. This drop in demand corresponds with a silver price drop. Keep this in mind as you monitor economic and geopolitical news.
Gold and Silver Buying Key Takeaways
There is no clear winner between the two metals because both seem set up for long-term bullish trends and each have unique risks. Right now, investors who trust in gold are buying gold, reaching new all-time highs based on emerging global trends. Investing in silver, on the other hand, is more about reclaiming previous all-time highs based primarily on industrial applications. Either or both metals could pop in an unexpected crisis or catastrophe, and whichever is better depends on your risk tolerance and how comfortable you are with each strategy.
