Which Has the Shinier Future-Silver or Gold ?

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by Elizabeth Goldman

Recent performance data may dictate whether you invest in silver or gold. Certain investors, depending on their overall strategy, feel strongly that one metal makes a significantly better investment than the other. However, even though the markets change constantly, there is still solid evidence to indicate that both metals can be solid components of your portfolio.

At last check, gold cost $1,790 per ounce, while silver cost $37.58 per ounce. While the price of gold seems impressive, do not be fooled by the gap in the per-ounce numbers. Although both metal’s prices are going up, silver’s is actually rising significantly more quickly than gold’s. For example, in 2010 silver prices rose 80 percent more than gold prices — a difference of two and a half times. Due to the continued decline in value of the U.S. dollar, many analysts expect this trend to continue.

The gold-to-silver ratio, which is simply the price of gold divided by the price of silver, currently stands at about 50 to 1. Some initially think this means gold is the better investment, but the difference in price trends means that many investors currently lean more towards silver than gold. Although pricing trends can obviously change very quickly, current indications point to both continuing to be a profitable investment.

It is true that the elevation in silver and gold prices has led some investors to cut back on their investments in those areas, but there is still room to make money in silver or gold. As long as the value of paper money continues to drop, it only makes sense to invest in minerals that are bound to hold their value. Many analysts feel silver is currently still under-priced compared to its value. However, silver’s price also tends to vary more widely than gold’s. Therefore, while gold is a more stable investment, silver tends to offer more profit potential for aggressive investors.

Investing in both markets is likely the smartest strategy. This allows you to anchor your commodities portfolio with gold, while taking some risks in pursuit of the higher yields of silver. Of course, if you are unfamiliar with the commodities market, you would be wise to rely on the advice of a qualified investment professional before investing in either silver or gold.

Although some believe that although gold is overpriced right now, it is still a solid investment. Gold’s price per ounce over the last 10 years has risen from about $300 an ounce to over $1,700 an ounce – a truly remarkable gain. Silver’s gains during the same period, however, were even more impressive. It grew from just over $4 an ounce to its current price of over $35 an ounce. That alone will tell you that there is money to be made in these precious metals by savvy investors.

Will this growth trend continue in the future? Due to the current worldwide economic turbulence and financial unrest, most forecasters believe that it will. Not only can precious metals earn you an impressive profit, they also help protect your financial future from the winds of change by providing you with a product of lasting and intrinsic value.


Elizabeth Goldman is a writer with sunbirdFX, the oiltrading and CFD specialists. All views and opinions expressed are those of the writer and do not necessarily represent Sunbird FX.

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