Should I buy Gold or Silver?

This is a question we hear quite often at AJPM. Although there is not a specific answer for this, we can help clarify a few points that may help you with a decision. For years Silver has been regarded as a secondary purchase option next to Gold, a poor man’s entry into metals one might say. Here are a couple of facts you may want to take into account while making your decision.   

One chart we like to look at is the Gold to Silver ratio chart. This shows how many ounces of Silver it would take to buy one ounce of Gold. Today, September 23, 2016, with Gold at $1337.00 and Silver at $19.73 the ratio would be 67.76. Meaning you could purchase 67.76 ounces of Silver for every one ounce of Gold you could buy.  Historically this ratio has been all over the place. It has reached close to 100 two times (1941 and 1991) and has also sunk below 20 three times (1919,1968 and 1980). With all of that being said, ratios tend to fluctuate so investors might say right now is a better entry point for Silver  over Gold because history shows that the ratio could drop at some point.  We wish there were a magic eight ball that could tell us when that will be but until then we can only speculate.

Another question to ask yourself while buying Gold or Silver is how and where do you want to store it? Obviously with the prices of Silver being lower than Gold, you could find yourself looking for more storage space if buying silver (Remember 67 ounces of Silver to every 1 ounce of Gold). 

So what it boils down to when picking the right metal to buy is personal preference. Do you want to spend more money on investing in Gold or do you want to take advantage of the high Gold to Silver ratio and buy Silver at a lower price point? Fortunately, we believe that with prices at these levels, there is no right or wrong answer.

Tags: what to buy, gold, silver, ratio, storing gold & silver
By: AJPM Staff
Posted: 27 Sep 2016