Gold vs. silver: 5 differences that matter most to investors.

Gold and silver are two precious metals that differ right from their looks. They are two different components that are extremely valuable today. There are differences between gold and silver, but which difference matters most to investors?  It’s already established that investing in precious metals is one of the best ways to beat inflation and safeguard your assets. But deciding which metal you should invest in can be quite tasking.

To help you out, we’ve examined 5 differences between gold and silver that investors need to consider before deciding which one to buy. We’ve also highlighted what each of these differences means for investors and their portfolios. Let’s dive in! 

5 differences between gold and silver and their implications for investors 

1. Volatility 

The first difference between gold and silver that is important to investors is volatility. 

On any given day, the volatility of silver prices might be two to three times that of gold. While traders may gain from such fluctuations, it can be difficult to manage portfolio risk.

More than gold or most other asset classes, a small amount of money can have a higher impact on the silver price.

As a result, on good days, silver will increase more than gold, and on bad days, silver will decrease more than gold. Of course, there are exceptions, but this is how it works.

So what does this mean for investors? 

Silver’s heightened volatility is not for the weak-hearted. Any investor diving into the silver market should be emotionally prepared for volatility. 

It’s pointless to buy silver metal if you’re one of those investors who panic and sell at the first significant downturn.

As an investor, you should be focused on using this volatility to your advantage.

History has shown that silver will outperform gold if you buy during a bull market.

Because silver is more volatile than gold, it will outperform gold in the approaching bull market.

The heightened volatility means you’ll have to be more flexible in selling. Silver will sell off faster and further than gold, so be careful if you plan to sell, especially when the bull market appears to be nearing its end.

Silver is like adding an extra dose of flavor to your portfolio. You should buy silver if you’re comfortable with heightened volatility. Just ensure to buy around the start of a bull market.

2. Affordability 

You can get the same benefits as gold if you buy genuine silver. Silver comes with advantages that almost no other asset can match.

Physical silver, like gold, is a difficult asset to come by. Physical silver is a tangible asset that cannot be hacked in a world of paper profits, digital trade, and currency fabrication. 

It is a form of money, similar to gold; unlike paper currency or digital entries, it cannot be generated out of thin air, which is why it does not depreciate easily. When it comes to coinage, silver has been used more frequently than gold throughout history.

There is no risk of a counterparty with silver. If you have actual silver, you don’t need another party to fulfill a contract or promise.

It’s never been turned off. You have no default risk if you own real silver. That isn’t the case with practically every other investment you make.

It can be kept as private and discreet as possible. Although any gain must be reported on your income tax return, physical silver can provide some privacy or confidentiality with a portion of your assets.

Silver has the edge over gold because it provides all of the benefits mentioned above at a lesser cost. For this reason, silver is known as “poor man’s gold.”

So what does this mean for investors? 

Silver is significantly affordable for the common investor. So they can easily purchase this precious metal and safely keep it in their arsenal. 

Not only can investors easily buy silver because of its affordability, but they can also sell it quite easily. 

If you’re looking to meet a little financial need, you can easily sell silver, unlike gold, where you must sell an entire ounce before you can find interested buyers. 

Silver is also more practical than gold for routine little transactions.

It is also extremely suitable for investors looking to invest in precious metals but with tight budgets. But if you’re looking to invest largely in precious metals, then gold is your best option. 

Finally, because silver is more affordable, it is a great option for those who are into gifting others precious metals. 

3. Industrial use

56% of silver is used industrially because of its properties. You can’t go a day without using any product that contains silver. Its applicability is great, and so many industries use silver. Silver is present in everything, from electronics to batteries to medical applications. 

Silver is the most electronically conductive, thermally conductive, and reflecting. Life would not be this way without silver. 

Although because of its numerous uses in diverse industries, the status of the world economy has a stronger impact on silver demand than on gold. As a result, silver is more vulnerable to economic ups and downs.

What does this mean for investors? 

In a booming economy, the demand for silver is high due to its diverse industrial use, and in a recession or deflation, the need is lower.

Also, unlike gold, silver is majorly used in the industry and subsequently discarded. It is not cost-effective to recover every single grain of silver from most items. As a result, the silver used is permanently lost when the product is abandoned. It contributes to the reduced amount of silver that can be recycled and used to make products sent to the market. 

Since millions of ounces of silver are lost each year to meet demand, there must be an increase in supply to match the pace of the market.

Historically, silver’s role as money has had a greater impact on its price than its role in the industry during a monetary or financial crisis.

A deflationary slump is one economic circumstance in which silver may underperform initially. However, in such grave cases, governments and central bankers are likely to implement extremely inflationary policies that will help keep the economy afloat. These policies will serve as a pad for silver due to its haven status.

4. Silver Stockpiles 

Various governments and other institutions used to keep large amounts of silver. However, the majority of them no longer have stockpiles of the metal. The only countries still store silver are the United States, India, and Mexico.

Since silver is no longer utilized in coins, most governments do not keep it. However, silver is used in diverse industries to a large extent. If future industrial needs increase or the supply chain is disrupted, governments will not be able to meet demands.

On the other hand, central banks continue to buy gold on a net basis year after year. These ongoing purchases help to drive total demand for the metal.

If the government ever needs to buy silver for whatever reason, it would cause a major shift in the market, leading to a surge in demand for silver and a major increase in its price. 

Although this might not happen if it does, it would significantly and immediately impact the silver market.

5. Storage Space 

Silver requires significantly more storage space than gold.

The same dollar investment will yield around 80 more ounces of silver than gold. Furthermore, gold has a higher density than silver. I.e., Pure Silver is 84% greater than pure gold. So silver will take up to 128 times the space of gold for the same amount of dollars. 

Concealing silver coins is extremely problematic compared to how easily you can hide gold.   Silver requires much more storage space than gold, whether you buy coins or bars.

Because it demands greater space, professional storage is higher than most depositories.

Also, physical silver transportation may be more difficult, expensive, and time-consuming.

Finally, silver tarnishes with time, whereas pure gold does not. As a result, silver coins and bars must be maintained in a dry place away from the elements, which gold does not require.

What does this mean for investors? 

Gold requires far less storage space than silver, is less expensive to store, is lighter and easier to move, and does not tarnish.

Silver storage requires a little more thought than gold storage. 


What is the difference between white gold and silver? 

White gold and silver are two precious metals that are easily mistaken for each other. The difference between white gold and silver is that white gold is an alloy while silver is pure metal. Also, white gold is rarer than silver and is usually marked in karats. Silver, on the other hand, is marked in purity percentage. Another difference between silver and white gold is that it is easier to carve on gold. 

Which is more valuable, silver or gold? 

Silver and gold are precious metals that investors can invest in, but gold is 70 times more valuable than silver. The silver market is a fraction of the gold market despite being mined at eight times the rate of gold. 

Is silver softer than gold? 

Pure gold is softer than silver. Its heightened level of softness makes it extremely malleable and ductile. Due to its softness, malleability, and ductility, pure gold can’t be used to make jewelry. 

Is silver flammable? 

No, silver is not flammable. However, there are silver compounds oxidizers such as silver nitrate and various others. These compounds increase the flammability of explosive materials.

Take advantage of the opportunity that comes with this metal now! Call the precious metal experts at American Bullion: (800) 531-6525. Looking for a guide to help you when buying precious metals? Our free gold buyers guide is an extensive guide that enables you to make your purchase.