When should one invest in Silver instead of Gold?

[MoinSheikh]

The title pretty much says it all, sorry if it sounds naive, I'm actually new to all this.

[stefffana]

Hi, @MoinSheikh.

Nobody knows the correct answer for this question, unfortunately.

The best way is to have physical silver and gold at approximately the same value in your stack. The gold/silver ratio is variable, giving you a small margin to have a profit if you want to play the ratio game. If not, just buy steady and constantly every month gold and silver to add any quantity you can afford to your stack. If you accumulate for long term, you can't lose. The satisfaction to grow a treasure for you and your family is very rewarding.

Happy stacking, my friend!🤗

[Paul]

" Gold is the money of kings, silver is the money of gentlemen, barter is the money of peasants – but debt is the money of slaves.”

Norm Franz, Money & Wealth in the New Millennium: A Prophetic Guide to the New World Economic Order

[Bigmarc]

I suppose it depends on why you want to do it? 

Some do it as a savings mechanism, some play with market cycles, some just like collecting coins, then you have your preppers, also many members are saving for there grandkids once they are gone. 

Each of these types of members will have their own idea of when to enter into the market and some already know when they want to sell.

[FriedrichVonHayek]

If you don't want to buy scrap Silver which is the cheapest way but hard work then I would use Bullionvault to buy Silver then sell it to buy Physical Gold when the Gold/ Silver ratio drops.

Vat and the Premiums on Physical Silver in the UK make it uninvestable in my opinion.

[MetalMandible]

Invest in silver if you want to speculate.  It is said by many to have greater upside potential.  Do not buy it if your goal is to grow your wealth in the short-medium term.

Buy gold if you want a more reliable way to preserve your purchasing power over time.

Silver can quickly take up a good amount of space.  Gold usually doesn't. 

[HillWalkerDundee]

Money is kind of like energy, it doesn't get used, it gets converted. Spending cash by buying silver or gold is not losing money, simply converting it to another form.

[SidS]

Don't bother with silver buy gold.

I've dabbled in both and gold is the only one that has really given my any returns. Silver is great if you want to enjoy a plateau and not have to walk up a hill. 😁

[stefffana]

1 minute ago, SidS said:

Don't bother with silver buy gold.

I've dabbled in both and gold is the only one that has really given my any returns. Silver is great if you want to enjoy a plateau and not have to walk up a hill. 😁

Maybe you was stacking the wrong type of silver. My silver given me so far a great return, over 40% profit on average. 

Just sayin'...😊

[SidS]

16 minutes ago, stefffana said:

Maybe you was stacking the wrong type of silver. My silver given me so far a great return, over 40% profit on average. 

Just sayin'...😊

No, my silver has sold for more than I bought it for, but when inflation adjustment is taken into consideration I'm not sure it was really worth it. The money invested in gold instead performed phenomenally well. Bearing in mind I bought in on gold at $250-$1000 per oz range and silver at $5-$16 per oz.

Buying sovereigns for £80 a piece and selling them at £180 was a great mark up.

[stefffana]

2 minutes ago, SidS said:

No, my silver has sold for more than I bought it for, but when inflation adjustment is taken into consideration I'm not sure it was really worth it. The money invested in gold instead performed phenomenally well. Bearing in mind I bought in on gold at $250-$1000 per oz range and silver at $5-$16 per oz.

Buying sovereigns for £80 a piece and selling them at £180 was a great mark up.

Agree. Any situation is different.😊

 

[JohnA1]

I've been buying silver for a couple of years now. (was very reluctant to dip my foot earlier due to premiums and VAT)

I keep track on a spreadsheet, ALL of it is currently underwater (i.e. would sell at a loss if I were forced to sell)

My assumption for sale price is spot. If I were to use the current forum rate for silver, they are still underwater, only a lot less so.

Yes, a lot of it was before I discovered TSF so I paid VAT like a sucker - however the premiums were lower, so that softens the blow. Still I paid £1-£2 per ounce more than the forum rate at the time. Live and learn eh..

 

..and that is in nominal prices. In reality £1000 of 2021 were worth more than £1000 of today - 30% more at least IMO

So silver is not for the faint of heart, not a clear get-rich-quick route. You may need to sit on it for many years before it goes overwater (adjusting for real inflation makes things much worse)

Gold is safer in that respect.

Edited June 12, 2023 by JohnA1

[HillWalkerDundee]

You are probably right financially but, to me, silver is a thing of beauty. I don't get that same buzz with gold. Pleasure has a cost.

[JohnA1]

...plus when the time is right silver tends to move up more violently than gold (this multiplier works downhill too!)

So you sit on it until it is time to flog it for some shiny rock perhaps, if gold/silver ratio drops below 40:1 for example

But it could be a long waiting game..

[HillWalkerDundee]

My stack is for my grandkids, not for me. I buy two of everything so no one is left out. Last night I won the Apollo 11 set on here. The first time I ever bought something just for myself.  I like beautiful (to me) things. I got given a painting for my birthday one year. Nobody else likes it but I do. I know exactly how much it cost as I looked admiringly at it but would never spend the money on it for myself. I was so disappointed when I saw that it had been removed from the wall, I could have kicked myself. I am like that with silver.

[monkey]

I quite like Mike Maloney's method of investing in gold and silver. In theory it should ensure your purchasing of gold and silver would gain value over the long term more efficiently.

His method on deciding to buy is based on the gold silver ratio in the following bands

under 50 - buys gold only

50 - 60 - buys 75% gold 25% silver

60 - 70 - buys 50% gold 50% silver

70 - 80 - Buys 25% gold 75% silver

over 80 - Buys silver only

It seems to have worked well for him, seems like a good frame work to play with to sute your personal situation.

If your feeling bold you could trade your gold and silver stacks to build your purchasing power using the gold silver ratio as a rough guide.

My view is to hold any PM purchase for the long term (5+ years) to get the best from it.

[JohnA1]

Also it is worth deciding which ratio to use.

The spot ratio, or the actual one?

Silver premiums tend to be significantly higher, pushing the actual ratio downwards.

Plus the stronger speculative element of silver stacking needs to be accounted for. A beginner would aim for a different balance than Maloney.

[monkey]

It would also depend on what product your buying. Bullion or collectors Numismatics.

I believe Maloney goes off spot price, I think it wold be for buying bullion products. I would assume he has a tax efficient way of buying through his business too.

[TheShinyStuff]

6 hours ago, HillWalkerDundee said:

You are probably right financially but, to me, silver is a thing of beauty. I don't get that same buzz with gold. Pleasure has a cost.

I totally agree. Sure gold is pretty - it's yellow, heavy and valuable.

But silver is just a different beast altogether. Stunningly beautiful.

[BearlyHere]

Gold /silver ratio historically has been 15 to 1.  Now it is ~ 82-1.  Silver SHOULD be much higher.

[Bigmarc]

Go back further. 60 to 1 for hundreds of years. 

[JohnA1]

In ancient Egypt silver was more valuable (so the story goes)

Swings and roundabouts..

[SidS]

8 hours ago, BearlyHere said:

Gold /silver ratio historically has been 15 to 1.  Now it is ~ 82-1.  Silver SHOULD be much higher.

SHOULD doesn't make IS I'm afraid.

Remember when silver was at that ratio there was still a gold standard of some form and silver was regulated with regards to price as it was tied to the currency system. A certain weight of silver was legally equal to a dollar, a quarter or a shilling etc. Once base metal coins came along and silver lost it's role and became an industrial metal, it became less 'regulated' and floated on the markets.

Gold once released from its monetary constraints (where it was suppressed) has flourished. Silver behaved differently, it went up and then it kind of went sideways. Silver is cheaper now than it was in Victorian and earlier times.

Maybe silver has had its day and most people don't see the value in it any more?

Gold is still valuable and still thought of a treasure and worth a fair bit. Very few ordinary folk seem to mention or get excited about silver.

The manipulation and paper markets do not help. Sometimes you've got to know when you're in an echo chamber.

I don't say these things lightly nor do I say them condecendingly. I say them because I've been in the silver market since 2000 and I've learned the hard way. Silver should be higher but it's not and from everything I've seen, it's not going to be.

Edited June 20, 2023 by SidS

[JohnA1]

Also lets not forget that Pound Sterling started as one pound (of weight) of sterling silver.

Not sure if the 'pound' weight was the exact same as today, but it was originaly defined as a specific amount of silver.

Edited June 20, 2023 by JohnA1

[SidS]

2 hours ago, JohnA1 said:

Also lets not forget that Pound Sterling started as one pound (of weight) of sterling silver.

Not sure if the 'pound' weight was the exact same as today, but it was originaly defined as a specific amount of silver.

Originally it was a Tower Pound, later tweaked to be a Troy Pound. A Troy Pound weighs 12oz/t.

20 pennyweights make 1oz/t, 12oz/t make 1lb/t (or 240 pennyweight).

12 silver pennies made 1 shilling and 20 shillings made £1 (or 240 silver pennies).

A very neat system overall.

A treasury roll dated to the late 1390s, right at the end of Richard II's reign, listed his inventory and the sterling silver items were worth their equivalent weight in currency. So if an item weighed 3oz/t, it was worth 60 pence (or 5 shillings exactly). Silver plate was regularly melted down to make currency and old currency melted down to make plate. The metal and the currency were firmly linked.

Gilded items were worth their silver weight plus a percentage for workmanship on the gilding.

Gold items were worth their weight in gold - which also matched the currency system.

The obsession with ratios, 1:12, 1:15 or 1:16 all came from the days when silver and gold were tied together through their official role as currency.

Gold and silver are no longer currency - they are either industrial metals or investment vehicles and are 'something else' when compared to currency.