Is Silver a Better Investment Than Gold? Silver Investment

For centuries, both gold and silver have been symbols of wealth and safety. But when it comes to investment—especially in uncertain economic climates—gold has long held the spotlight. However, investment silver is increasingly gaining attention. This article explores whether silver is not only a viable alternative to gold but potentially a better-performing one, especially for EU-based investors and entrepreneurs seeking diversification.

Why Precious Metals?

Precious metals are known as “safe-haven assets.” They tend to retain value or even appreciate during:

• Economic crises
• Currency devaluation
• Inflationary periods
• Geopolitical uncertainty

In this environment, silver offers a unique dual role: it acts as a precious metal and as an industrial commodity.

Silver vs. Gold: Performance Snapshot

Let’s begin by comparing silver and gold over key timeframes:

Historical Role of Silver as Money

While gold has served as reserve currency for central banks, silver coins circulated widely in everyday transactions throughout Europe. In Hungary, for example, silver forints were used from the Middle Ages well into the 19th century.

Even the U.S. dollar was once backed by silver certificates. This monetary legacy still fuels silver’s appeal as a store of value.

The Industrial Angle: Green Energy & Tech

A major reason silver has investment potential beyond gold lies in its industrial applications:

1. Solar Panels

Silver is a key component in photovoltaic (PV) cells. As the EU and China expand renewable energy mandates, silver demand is projected to grow 15–20% annually in this sector.

2. Electric Vehicles (EVs)

Silver is used in battery contacts, charging stations, and power electronics.

3. 5G & Consumer Electronics

Mobile phones, laptops, and 5G towers all require silver due to its superior conductivity.

These applications make silver both a precious and an industrial metal, tying its price to real economic activity, not just speculation.

Volatility: Friend or Foe?

Silver prices can swing more dramatically than gold. Here’s why:

• Smaller market size than gold
• Thin trading volumes amplify price movements
• Industrial demand is cyclical

This volatility might scare conservative investors, but for active traders or long-term holders who buy on dips, it can be an opportunity for high returns.

For instance:

• In March 2020, silver dropped to $12/oz.
• By August 2020, it had soared to $29/oz—a 140% jump in five months.

Inflation Hedge: Is Silver as Effective as Gold?

Gold is traditionally seen as the better inflation hedge. However, silver has shown superior performance in high-inflation, high-growth periods.

Case Study: 1970s Inflation

• Gold rose from $35 to $850 (24x)
• Silver rose from $1.30 to $50 (38x)

So while gold preserved purchasing power, silver multiplied wealth more rapidly—albeit with greater risk.

Physical Silver vs. Silver ETFs vs. Mining Stocks

1. Physical Silver (Coins & Bars)

• Most tangible
• No counterparty risk
• Ideal for long-term holders
• VAT is applicable in some EU countries, unlike gold

2. Silver ETFs

• Easy to trade
• Tracks spot price
• Examples: SLV (iShares), ZKB Silver ETF (CHF)

3. Silver Mining Stocks

• Leverage to silver prices
• Business risks (debt, regulation, labor)

Strategy: A diversified approach (50% physical, 30% ETF, 20% miners) can offer safety, liquidity, and growth.

Silver-to-Gold Ratio: A Powerful Tool

Historically, the silver/gold price ratio was about 15:1. As of 2024, it’s around 82:1. A high ratio suggests silver is undervalued relative to gold.

Many investors use this ratio to time trades: when the ratio drops, they convert silver into gold, locking in gains.

Geopolitical and Economic Trends That Favor Silver

1. Dedollarization – Countries like Russia and China stockpile gold, but silver is being increasingly demanded for tech.
2. Central Bank Digital Currencies (CBDCs) – May drive people to physical assets for privacy and autonomy.
3. Energy Transition – Silver is essential in green infrastructure, a pillar of the EU’s Green Deal.
4. Declining Silver Reserves – Few new major silver deposits have been discovered in the last decade.

Risks of Investing in Silver

Like any asset, silver carries risks:

• Price manipulation concerns (notably in COMEX futures)
• Illiquidity in physical silver markets
• VAT in EU nations (unlike investment gold, which is VAT-exempt)
• Storage costs

Mitigation tips:

• Buy from reputable dealers
• Consider offshore storage or private vaults
• Track premiums over spot price before buying

How EU Investors Can Buy Silver

1. EU Bullion Dealers – Many offer Swiss-stored silver free from VAT under specific schemes.
2. Online Platforms – Like BullionVault or Silver Bullion SG.
3. Brokerages – Trade silver ETFs via European exchanges (e.g. Xetra, Euronext).
4. Collectible Silver – Hungarian forint-era coins or EU-minted silver commemoratives may also carry collector premiums.

Final Verdict: Is Silver a Better Investment Than Gold?

So, is silver better than gold for investment?

It depends on your risk profile. If you want safety and low volatility, gold remains king. But if you’re seeking undervalued assets with industrial upside and historical precedent for exponential returns, silver may be the smarter play over the next decade.

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Disclaimer: This article is for informational purposes only and does not constitute financial, tax, or investment advice. Readers should consult with a licensed professional before making any financial or business decisions.