Silver is more volatile than gold. The price volatility of silver can be two or three times greater than that of gold on any given day. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions achieve financial freedom through our website, podcasts, books, newspaper columns, radio programs and premium investment services. Silver is much less dense than gold, and pure silver is up to 84% larger than pure gold by volume.
This means that much more space is needed to store silver reserves than gold reserves, which entails significant storage, logistics and related costs. Because of the volatility of silver, it may be more attractive than gold if you want to speculate on short-term fluctuations. While gold and silver have similar boom-bust cycles, there are some key differences you should consider when deciding whether to invest in gold or if, as an investor, if you buy in a bull market, history has it that silver will give you a higher return than gold. While both gold and silver are precious metals, a type of product that many generally consider a safe investment, there are certain factors that affect their long-term value.
While many investors are looking for gold and silver in physical form, such as ingots or coins, investing in mining stocks is usually a better option. In fact, more than 50% of the total volume of silver supply is used for industrial purposes, compared to about 10% of gold. Even in good times, many investors keep a small percentage of their assets invested in gold or silver as a portfolio diversification strategy. Investing in gold and silver may seem comparative, but the reality is that there are many things that separate these two precious metals.
You can easily see that, in percentage terms, silver rises much more than gold in bull markets and falls much more than gold in bear markets. The prices of gold and silver are so unstable (and have been so over time) that, in an economic crisis, their only use would be to wait for someone to take your silver coins or watch in exchange for a package of toilet paper or a can of gas. One of the main differences between gold and silver that many potential investors don't understand is the difference in size and weight between the two precious metals. Investing in precious metals such as gold or silver can be considered by many to be a safe bet for their money.
Let's look at the gold-silver ratio, which tells you how many ounces of silver you would need to buy a single ounce of gold.