In an investment perspective, why would you consider investing in silver? What is really the difference between gold and silver?
There are many reasons why most investors love gold. But, both silver and good can serve as money for the reason that they have both 5 Ds and these include: Difficult to counterfeit
Dissimilar, which just means that each ounce piece of pure silver or gold is the same as any ounce of pure gold
Divisible due to the fact that you can melt down or chop up a bar and still have value
Dense, which just means that it has a high value of weight ratio
Durable because they do not go bad or rot. That is the reason why people do not use vegetables and fruits as money.
If you have silver and gold, you really own it. For instance, if you think you own your house yet you keep paying for property taxes. Otherwise, the government would take it from you. With silver and gold, there’s no counter-party risk. Aside from that, there isn’t someone on the transaction’s other side that you should trust.
So, how different silver is from gold?
Below are some of the many reasons:
Silver has many uses compared to gold. Both gold and silver are used in coins and jewelry as well as in electronics. Nevertheless, silver has some traditional uses like silverware and photography. It has also industrial uses in bearings, batteries, catalysts and brazing. Silver has also uses in medical applications, solar energy, and water purification. Gold is considered as the most malleable metal and silver is the second metal that’s most malleable. Silver is also valuable as industrial metal for the reason that it’s the most reflective metal and a good conductor of electricity and heat.
Central banks also have at least silver in their vaults and these have no silver. It only means that there’s no risk of them dumping the silver to depress its price, since these have nothing to dump.
Silver is also cheaper per ounce compared to gold. This just means that if Average Joe decides in investing in the precious metals, it’ll be much easier for him to purchase an ounce of silver that it’d be to purchase an ounce of gold.
Silver is basically used up and gold is not. The majority of gold mined still exists nowadays. However, silver is consumed in electronics, some applications, batteries, and photography and recently resides in small amounts in landfills. Experts estimate that 46B ounces of silver were mined since the dawn of civilization in comparison to 5B ounces of gold.
Gold is also mined as the main product. Silver is mined as a by-product of some mining. It means that to boost the supply, you can’t open up new mines and it is only if the production of zinc increases will production of silver increase.
Silver and gold are precious metals, yet silver has more uses than gold and it’s cheaper per ounce and thus more accessible to common man cannot be dumped by the central bankers, is hard to increase production, and gets used up. That is the reason why silver must be a particular component of a prudent portfolio.
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