Is It Better To Invest in Silver Than Gold?

People considering investing in these two precious metals often ask "Which should I invest in, silver or gold?" Silver is definitely the answer, in our opinion, for a few of reasons.

1. Silver's percentage increase (not the dollar amount, but the percentage increase from the original purchase price) is nearly always greater during bull markets for precious metals. We think we're headed for a longer bull market.
2. There are dozens of industrial applications for silver, and not nearly as many for gold. Thus, industry use provides a base to silver's price. These industries use so much silver that production, along with recovery of silver using various systems, has been below demand every ear since 1990.
3. Due to this shortfall in producing new silver, above-ground reserves (stockpiles) have dwindled to almost nothing. There's more gold sitting in storage vaults than there is silver ready for use in above-ground stockpiles.

We'll admit that the recent find in China of a 150+ mile long vein of silver (over 30 billion ounces) has increased the below-ground estimates of remaining silver.

But China also recently started making silver and gold coins available for sale to Chinese citizens, actually urging them to buy the coins.

And it's not in China's financial interests to dump large quantities on the market and depress the price.

The diamond companies in South Africa did that for years to keep the diamond supply low and prices up.

If China's 1+ billion people decide to go on a silver binge, combined with the continually increasing industrial demand, we'll see silver prices remaining high.

Do You Agree?

If you agree with the above long-term outlook, you'll want to start investing in silver, even in small amounts, like Silver American Eagle coins.

If you think gold is the better investment, see the Investing in Gold section for details about gold investments.