Should You Invest in Silver with Gold’s Price High? Experts Weigh In
The comments below are an edited and abridged synopsis of an article by Aly Yale
Gold investing has surged in recent years. Driven by inflation, geopolitical tensions, and the expectation of lower interest rates later this year, the spot price for gold has hit record highs multiple times — reaching more than $2,400 per ounce in late May.
While that’s good news for current gold holders, it poses a dilemma for potential investors. Is it wise to buy gold when the price is at an all-time high? Or should you consider alternatives like silver? We asked experts for their insights.
The Case for Continuing to Invest in Gold
Despite gold’s high price, many experts believe there’s still room for growth. Analysts from Citigroup, for instance, recently adjusted their forecasts, predicting gold could reach $2,875 per ounce by 2025.
“Now is one of the best times in history to own gold,” says Paul Williams, managing director at precious metals dealer Solomon Global. “The major price drivers for gold to continue its push to record levels are forecasted to continue for many years.”
Patrick Yip, senior director of business development at precious metals platform APMEX, agrees but advises patience. “In the long term, gold will likely perform well,” Yip says. “However, in the short term, gold may decline into the summer months, which is historically a weaker period for precious metals prices. Many investors view the summer months as a good opportunity to buy low.”
Gold remains a strong option for those seeking protection against inflation and geopolitical tensions. “Investors might be comforted by keeping some portion of their investable capital in gold,” says Peter C. Earle, senior economist at the American Institute for Economic Research.
Considering Silver as an Investment
If you’re looking for potentially larger short-term gains, silver might be a better option. However, be prepared for volatility. Silver is more erratic due to its ties to industrial uses and the metal’s greater availability.
“When comparing gold and silver, silver has a greater beta than gold,” Yip explains. “If precious metals rally, silver will likely rally by a greater percentage than gold. On the other hand, if precious metal prices fall, silver will likely decline by a greater percentage.”
Silver is also more accessible for investors with limited capital. “It’s cheaper and more accessible,” Earle notes.
A Balanced Approach: Investing in Both Gold and Silver
For those with the means, a balanced approach might be best. Investing in both precious metals allows you to benefit from gold’s stability and silver’s potential for higher returns.
“With the outlook for the global economy and conflicts looking bleak, the prospects for precious metals look very bright,” Williams says.
Final Thoughts
Gold’s recent price surge and the ongoing economic and geopolitical factors makes it a compelling investment. Yet, silver’s potential for short-term gains and accessibility also make it an attractive option. By understanding the strengths and risks of each metal, investors can make informed decisions that align with their financial goals and risk tolerance. Whether you decide to invest in gold, silver, or a combination of both, the key is to stay informed and diversify your portfolio wisely.