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There’s been quite a bit of attention paid to the price of gold in recent years and with good reason. Starting 2024 priced at just over $2,000 per ounce, the price of the shiny yellow metal has surged since, now sitting around $3,400 for the same amount and with speculation high that it could soon hit a milestone of $4,000, essentially doubling where it was in January 2024. That’s a remarkable increase for any asset, but particularly so for gold since it’s historically been better known as an income protector versus a steady income producer.
In this climate, however, many investors may have overlooked the benefits of other precious metals at the same time. And that could be a costly mistake, especially now the price of silver is surging. Since January, silver has risen from $28.92 per ounce to $37.12 per ounce this week, according to American Hartford Gold. And while that may not seem particularly high on paper, it does mark a significant 28% rise in just over six months. Thanks to the powerful demand for industry usage in items like solar panels, this rise may evolve from a trend to a consistent pattern relatively soon, leading some investors to wonder if this is a better investment than gold now. But, is it? That’s what we’ll examine below.
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Is silver a better investment than gold, with prices surging?
Ideally, investors will have a mix of precious metals in their portfolio encompassing both gold, silver, and maybe some other metals like palladium. Together, these should generally be limited to a maximum of 10% of your overall portfolio. While silver isn’t necessarily a “better” investment than gold now, it can be a more attractive one for certain investors. Here’s why:
The entry price point is much lower: Simply put, unless you’re buying fractional gold or taking a dollar-cost averaging approach, the entry price point for prospective gold investors right now is historically high. Silver, by comparison, even amid its recent price surge, is many times less expensive and much more affordable for a wider range of investors. Sure, you may not be able to sell it as quickly for as much of a profit as you would with gold, but if you want to get invested in a rising asset for an affordable price, silver offers both features right now.
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You’ll still hedge against inflation: Gold is a reliable inflation hedge thanks to its consistent ability to maintain value when inflation erodes the purchasing power of the U.S. dollar – but silver offers the same benefits for the same reason. And, as was shown in the most recent inflation reading released by the Bureau of Labor Statistics, inflation remains a concern as the rate just increased, even if it was by a small margin. Still, to protect against this cycle of inflation and to shore up support in your portfolio for the next inevitable round, it makes sense to invest in silver now.
You’ll still diversify your portfolio: If one of the key considerations is to diversify your portfolio and you want to do so in an affordable way, then silver can help. A diversified portfolio, after all, is a more secure one, better equipped to weather economic volatility. And if you’ve overinvested in stocks, bonds or real estate, then it makes sense to diversify your portfolio with alternatives like gold and silver. And while gold may have the stronger reputation as a diversification tool, silver can offer the same feature for a much lower price.
The bottom line
Silver isn’t a better or worse investment than gold now as that determination is often made on a case-by-case basis, dependent on the individual investor and their budget and goals. But with the price of silver rising now, the likelihood that demand will remain high, and the same inflation hedging and portfolio diversification benefits that gold can offer – all at a much lower price – investors may find that silver is worth a second look now.