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How Gold and Silver Values Stack Up Against Traditional Currency

The Difference Between Precious Metals and Fiat Currency

Compared to traditional currency, both gold and silver rise above currency in terms of value. While gold and silver spot prices remain high, it offers an alternative to currency and offers financial protection.

When it comes to traditional currencies vs. gold and silver, there are some apparent differences between the two forms of currency. Traditional currencies tend to be easily traceable and prone to inflation, while precious metals are traditional commodities with intrinsic value that have stood the test of time.

It is important to mention that traditional marketplace fluctuations can influence gold and silver prices. While traditional currency continues to lose value, gold and silver’s values rise due to their standard commodity status – making them a great investment opportunity.

While gold values and silver values go up, the currency value stays the same or even decreases. This pattern has existed for years. Precious metals are often bought as a hedge of protection against the traditional currency to stay ahead of any financial curve that takes place. Precious metals can be diverse and the demand for them drives up their value. There are many factors to consider.

Fluctuating Economies

Precious metals continue to be a stabilizing force in terms of economic fluctuations around the world. With traditional currency, the failure of one country can directly affect another country’s economy or currency values. For example, Greece went through a period where their deficit exceeded expectations and they were unable to pay back loans and keep up with other financial responsibilities. Their debt crisis had other European countries closely watching the situation because their economies rely heavily on each other. If Greece had failed, European economic failure could occur.

However, the gold and silver values continued to rise over time because people looked for stability in their investments. This allowed the gold and silver prices to remain strong even during Greece’s financial crisis.

The demand for gold has increased substantially over the past decade, while the value of gold only increased a little bit. Gold prices remained relatively flat until 2011 when gold values started to rise significantly. Similarly, silver prices have also seen significant increases in recent years after years of stagnation between 2001 and 2010.

Regardless of gold and silver values fluctuating over time, they remain much more stable than traditional currency. Even if the gold and silver values were to drop, people will continue to invest in them because they offer a hedge against economic failures, which could occur at a moment’s notice, while also providing diversity in an investment portfolio. Precious metals are the best way to diversify a portfolio and protect yourself from a financial disaster.

The Intrinsic Value of Gold & Silver

Precious metals have withstood the test of time, and their values grow over time with the capability to be passed down from generation to generation. They are naturally occurring materials that can be easily found and mined. For example, gold is an element found in nature everywhere. Gold can be commonly found in mines around the world, which makes it very easy to mine for gold.

Gold and silver have intrinsic value because they can be used in many different industrial and commercial applications. Gold has been used for centuries in the medical industry, computers, telephones, gold vessels and windows in buildings. In fact, gold is so durable that gold jewelry worn by women from earlier civilizations can still be found today. Gold’s durability is a result of its molecular structure.

Precious metals were also used for both currency and trade in ancient times, which provided these metals with intrinsic value. They were viewed as a means to store wealth. This same form of value remains true until this day. A gold or silver coin has the same value today as it did 100 years ago.

Gold and silver are also very malleable metals, which means they can be beaten into leaf or bars easily. This makes gold and silver easier to store compared to products like lumber, minerals, crops or livestock.

Gold is rarer than silver, but they are both precious metals that have intrinsic value, which means they will always hold their value.

Industrial/Commercial Applications of Gold & Silver

Gold and silver are used for applications in the automotive industry, medical industry, electronics and jewelry. The need for these items helps drive the value higher.

Industry Applications of Gold

Gold is used in industrial applications, primarily in the automotive industry and in medical devices, to name a few. Medical uses include catheters, stents, bone implants and plates for craniofacial surgery. The semiconductor industry requires gold for wafer etching in microelectronics fabrication. Other areas where industrial gold is used include the production of telephones, jewelry, glass, high-speed bearings and specialized alloys.

Specialty Uses for Silver

Silver has uses in the automotive industry, electronics, solar energy, photography and medicine. Silver is used mainly in the production of most jewelry as well. It is also essential to wear gloves when handling silver during industrial processes because it can be absorbed through the skin. Typical industrial applications for silver include:

  • Air conditioning and refrigeration (about 36% of industrial use)
  • Glass, ceramics, and pottery (about 30%)
  • Photography (about 10%)
  • Electronics (8%)
  • Other uses include batteries, catalysts, and solar energy panels.

The Bottom Line

Considering these significant factors when comparing traditional currency to gold and silver, other more minor details remain important to the overall discussion of a traditional currency vs. owning gold and silver. Here is a breakdown of different advantages and disadvantages to keep in mind when forming your investment strategies:

Traditional Currency

  • Easily traceable
  • Convenient
  • Widely accepted


  • Traditional currency relies on a third-party system and central banks, making traditional currency unstable and unreliable for long-term planning.
  • Inflation devalues traditional currency over time, diminishing its value.

Gold and Silver

  • Traditional commodities, both highly valued for their beautiful color, purity, rarity, and durability.
  • Gold serves as a hedge against inflation by being less affected than traditional currency during market downturns.
  • Silver shares many of the same qualities that make traditional currency devalue over time, making it an excellent investment opportunity to protect against traditional currency devaluation.


  • Since gold and silver are both traditional commodities, they are subject to traditional market fluctuations, such as the ever-changing gold and silver price charts.

While the traditional currency may be more convenient for people who do not want to trade in precious metals, it remains volatile because traditional currency relies on a third-party system. Due to the unpredictability of traditional currency, gold and silver values rise above in terms of long-term stability and remarkable value.

Purchasing Power

Gold and silver are traditional commodities with intrinsic value that have stood the test of time; both precious metals provide a distinctive way to hedge traditional currency’s depreciation. With traditional currencies devaluing over time due to inflation, gold and silver are exceptional alternatives to protect one’s wealth from traditional currency devaluation.

Silver and Gold bullion make for great investment opportunities; for any questions regarding the eligibility of any specific products in your investment portfolios, APMEX recommends consulting a financial advisor or professional.

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