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Gold vs Silver

One of the questions we get asked frequently is which precious metal should we own Gold or Silver?

 

Gold is primarily bought as an asset and a hedge against inflation by individuals, central banks and investors. The other main uses of Gold include manufacturing jewellery and now being used in various electronics.

Silver, apart from being used in jewellery, coins and bars for assest also has as a growing number of industrial applications including solar panels, electronics, electric cars, medical equipment to name a few.

Given the above uses and versatility of these metals, the price of both Gold and Silver is driven by demand and supply and is subject to fluctuation constantly.

Let’s begin with 24ct Solid Gold which is everyone’s favourite.

 

The most recognised and commonly purchased denomination by precious metal investors for Gold is 1 ounce, which contains approximately 31.10 grams of Gold. Both Gold Coins and Gold Bars are popular in this weight. It is also very easy to check the value of this weight denomination as often online the Gold spot price is quoted in ounce.

 

Generally, the Gold bars attract a lower premium over spot compared to the Gold Coins, which is down to lower production costs, storage, ease of shipping and demand.

Generally, the Gold bars attract a lower premium over spot compared to the Gold Coins, which is down to lower production costs, storage, ease of shipping and demand.

Gold bars are available to purchase in various weight denominations starting from as little as 1 Gram Gold Bar to going all way up to 12.5 Kilo Gold Bar. Some of the most popular gold bars with investors include 10g Perth mint Bar, 20g Umicore gold bar, 1 oz Gold Bar, 50g Umicore gold bar and 1kg gold bar. A lot of customers investing a large amount prefer 1kg gold bar (32.15 troy ounces) as the premium they pay over spot for these are very low and these bars are easy to store, ship and carry. The general rule when purchasing gold bar is that the larger the weight of the bar, lower the premium you will pay over spot.

1g gold bars are very popular for start-up investors especially one-gram Perth Mint, 1-gram Umicore and 1 gram however the premiums are slightly higher on these. 1 gram gold bars are also great for gifts, presents, wedding presents, birthday gifts and Christmas gifts.

Similarly, Gold coins are available in a number of weight denominations, sizes and designs. Collectors and individuals purchase these based on their gold content value, design, historic significance and limited mintage. The most popular coins in the UK include the 1 ounce Gold Britannia coin and the Gold Sovereigns as they are CGT (Capital Gains Tax) Free and loved by our customers for its design.

Similar to gold, Silver is also available to purchase in bars and coins and there is a huge choice of designs and weight denominations.

1oz Silver Coins

One of the most common and popular way to add silver to your portfolio is buying coins which are available in various weight and designs. A number of mints around the world take immense pride in bringing in newer silver coin designs all year around based on year, history, current affairs, popular TV shows, cartoon characters and superheroes.

In terms of silver coins in the UK unarguably the 1oz Silver Britannia Silver Coin and the 2oz Queens Beasts Series Silver coins are the most popular and widely recognised silver coins. Again, both of these coins are CGT exempt as they enjoy the legal tender status in the UK.

When purchasing silver bullion in a bar format, the most popular weights are 10g Umicore silver bar, 20g Umicore silver bar or 100g Umicore Silver Bar. Again, silver bars are also available in much smaller denominations starting from 2.5 grams going all the way up to the industrial size 1000 ounce bars. The 2.5 gram silver bars attract a very high premium over the spot price.

The same applies rule as gold when it comes to premium over spot, larger the bar lower your premium will be. The 1kg silver bar being the most sold large silver bar offers a perfect solution if you do not want to buy silver in smaller denominations.

The 1000 ounce silver bar are industrial sized and they are huge, weighing around 70 pounds but feels like 120 pounds. These bars are very heavy and not made for everyone, mostly used for industrial applications i.e. producing solar panels. Having said this, investors can purchase these as the premium will be slightly lower than other silver bars and silver coins.

When comparing gold to silver, the biggest difference is the price. Silver has a much lower price compared to gold. Currently the spot price for 1 ounce Silver is around £14 / $17, on the other hand an ounce of Gold is priced £1135 / $1500. You can also check the current Silver Price and Gold Price through our live charts.

Silver is generally a good starting point for someone who is just getting into investing in precious metals and also provides great buying opportunities for even young people looking to save and venturing into the precious metal’s world. 

So which one should I own Gold or Silver?

 

Looking at the above you may be wondering what is preferable mix? Should I own both gold and silver or just the one, if so then what percentage should I own, and in what form?

We always say that this comes down to your personal preference and circumstances when considering to buy gold vs silver as an assest. 

We think it is great idea to diversify amongst the physical precious metals. So only committing to either gold or silver may not be in your best interest because each metal / denomination can outperform the other during certain market conditions. So, to ensure that you benefit from each of these possibilities is to actually own a percentage of both. This will come down to how much of each should you go with and the traditional safe bet being a 50/50 split however we also see a lot of our customers tend to purchase more gold so 60% or 70% buying in gold and rest into silver or a combination with other precious metals.

Gold bars

What to keep in mind when purchasing Precious Metal - Gold and Silver

When deciding between gold, silver to create an ultimate bundle the main thing to look out is the premium you are paying above the spot price. The other important thing you must know is that gold bullion attracts a lower premium, sometimes very low premium when compared to silver metal.

For example, when buying 1kg gold bar the premium will be anywhere between 1% to 2% over the spot price whereas 1kg silver bar will have a premium of 3% to 5%.

How to compare the volume of Gold vs Silver- Storage

Apart from the difference in price between gold and silver the other thing to bear in mind is storage, Silver coins and bars tends to be larger in volume than gold, therefore silver requires more room when storing and thus attract higher costs when shipping, storing or moving around

For example, if you see £10k worth of silver and £10k worth of gold the question is raised when shipping or storing these precious metals, is it more expensive to ship or store silver compare to gold? The obvious answer will be yes it will be more expensive to ship or store silver because of the volume and absolute weight of silver. To ship silver or store it in a safe/vault you will end up paying a little bit more than the gold. This is something you may want to consider if you are thinking of long-term storage, as this may make you lean towards gold.

To sum up it is not the question of one metal being better than the other as the precious metals complement each other and its best to diversify amongst the precious metals.

Please read our disclaimer – Your buying in gold and silver is your responsibility
Our publications do not offer investment advice and nothing in them should be construed as investment advice. Our publications provide information and education for investors – who can make their decisions without advice in buying precious metal. If you require advice please contact a advisor for investment as this service is not provided by us

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