Buying gold bars or silver coins as an investment is not always as straightforward as it sounds. These include considerations of important investment factors like divisibility, value, variety, and liquidity. In this article, we'll take a look at how silver coins and gold bars compare as an investment vehicle. At the end of this read, you should be in a much better position to make a sound decision.
Benefits Of Silver Coins
One of the critical benefits of silver coins is that they are easy to recognize. Almost every savvy investor can recognize popular coins, such as the Royal Mint, Perth Mint, and others. Unfortunately, however, it takes time and experience to get acquainted with all these silver coins.
Furthermore, silver coins are also easy to transport when compared to large bars. Plus, since they tend to be minor, they also become easy to sell during breakdowns in the monetary system. Monetary system breakdowns often seem less likely to occur, but they can happen when currencies or economies collapse.
The other significant benefit of silver coins is that they are easily recognizable. Everyone recognizes the silver coins produced by the US Mint, Royal Mint, Perth Mint, and others. But not every investor is familiar with the bars produced by refiners and assayers.
A good example would be the Weimar Hyperinflation that occurred after World War I in Germany. People who had invested in gold and silver currencies experienced far better outcomes than people with traditional modes of finance.
Benefits of Gold Bars
For centuries, gold has proven to be a stable, wise, and lucrative investment choice for both individuals and institutions. In addition to avoiding risks that come with relying on the unstable paper-based currency, investing in gold is a sure guarantee that you won't be affected much by inflation or currency devaluation.
gold bars are considered a far much reliable investment than gold coins because their value can be accurately determined. The idea here is that the value of gold bars is in the gold itself and that can only change based on the live spot prices of gold.
On the other hand, gold coins can be easily stored while gold bars are bulky and can only be stored in secured insured vaults.
Is It Better to Buy Silver Coins or Gold Bars?
While both gold and silver have attractive features, gold is the better investment for the average precious metals investor. Gold has a much larger liquid market that is driven mostly by investment and jewelry demand. The price of gold is less volatile than that of silver, too.
Meanwhile, silver is more speculative and has a stronger relationship to economic activity. This is because silver has many industrial uses. As such, silver can be attractive during down cycles when the price of the metal is cheap.
Investors have found the white metal alluring for some time now. The key advantage of silver is that it’s much cheaper than gold. Potential for significant gains once the price rises, therefore, it's more accessible to small investors.
The Right Choice Varies
Whether or not silver coins or bars are better depends on who you are as an investor. Smaller investors may have more use for collectible, legal tender assets like coins while large investors might not need collectible assets – they need silver that can be purchased at a lower premium over the spot price.
Regardless of whether you'll be buying silver bars or coins, it's important to buy your assets from a trusted supplier. Consider using a reputable precious metals refiner like Manhattan Gold & Silver that sells bullion at fair prices and offers storage solutions to keep your investments safe.
When to Sell Gold and Silver
While gold and silver bullion should be considered long-term holds, there will come a time when you may want to sell. When would that be? Probably one of two occasions…
Personal or economic emergency. Since gold and silver are ideally part of your savings, they can provide a ready source of cash should the need ever arise. That need be a personal one—a medical issue or loss of employment, for example—or some sort of crisis in the economy that impacts one's standard of living, such as rising inflation or a stock market crash.
Expensive relative to other assets. Gold and silver prices can bubble just like other assets, and if that occurs you might consider selling some of your holdings to capture a large profit. This would be especially true if prices of other investments have fallen and are undervalued, whether that be stocks or real estate or something else that might be a good bargain.
Precious metals have long been seen as a good investment in a declining economy as well as a means of storing wealth. While gold can offer the ultimate insurance and protection against uncertain economic times, silver is usually a more speculative investment. Both metals are commonly invested assets, but silver is an entirely different investment which can realize substantial profits despite the initial VAT outlay. It's because of these differences that owning both gold and silver together can be beneficial.