Four factors to consider when deciding to invest in Gold or Silver – Morgan Stanley


Looking for ways to prepare for future uncertainties? A solution for some may be investing in precious metals, such as Gold and Silver, strategists at Morgan Stanley report.

Silver may be more tied to the global economy

Half of all Silver is used in heavy industry and high technology, according to the World Silver Survey. As a result, Silver is more sensitive to economic changes than gold, which has limited uses beyond jewelry and investment purposes. When economies take off, demand tends to grow for Silver.

Silver is more volatile than Gold

The volatility in Silver prices can be two to three times greater than that of Gold on a given day. While traders may benefit, such volatility can be challenging when managing portfolio risk.

Gold has been a more powerful diversifier than Silver

Silver can be considered a good portfolio diversifier with moderately weak positive correlation to stocks, bonds and commodities. However, Gold is considered a more powerful diversifier. Unlike Silver and industrial base metals, Gold is less affected by economic declines because its industrial uses are fairly limited.

Silver is currently cheaper than Gold

Per ounce, Silver tends to be cheaper than Gold, making it more accessible to small retail investors who wish to own the precious metals as physical assets. 

 

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