The Buyt Desk
Time has proven that investment is the only way to grow money. The gold and silver jewelry purchased once for use acted as a hedge during the crises for most Indians.
In the last few decades, many investment products came in, but gold and silver remained on top of the list of investors with limited liquidity and risk potential.
Both gold and silver are considered safe investment avenues because of being precious and risk-free. But, when the question of choosing between two metals comes, gold always overshadows silver, for the reason that it is usable and considered prestigious.
Silver is also precious, but it never got the importance equivalent to gold. However, after the rise in the gold price, investors’ attention shifted to silver, and its demand rose significantly.
The magnificent increase in supply and demand of this metal has made investors of all levels think about it.
Gold Or Silver, Which One You Should Buy
The return from an investment highly relies on the liquidity put in and the risk-taking potential of investors. Gold’s performance is consistent, and it has given good returns in the past, but the cost of owning this product is high. At the time of writing this piece, Gold is trading at 57,790 per 10-gram 24 Karat. On the other hand, silver is trading at Rs. 727.50 per 10 grams. It is evident that there is a vast margin between both precious metals, but that does not mean silver is not a performing investment product.
Next, the rule of volatility says the assets that cost less are likely to give more gains or losses because a slight change in their price leaves a significant impact.
Example: With 50,000 liquidity, if you wish to invest in gold, you will get 10 grams of metal. The same corpus when you invest in silver, you get roughly 100 grams.
Suppose gold gained Rs 100/10 grams and silver Rs 10/10 grams. The 10 grams of gold will get you a profit of Rs 100, while silver will earn Rs 600-700. A slight variation yielded a great return.
Gold Vs Silver Performance in 2021-22
The financial year 2021-22 was challenging for both metals because of the volatility. Gold fluctuated between Rs 47,895 to 50,005 per 10 grams and failed to deliver the anticipated return.
The same happened with silver too. However, analysts are still optimistic about both precious metals. In fact, considering the industrial use of silver, they anticipate more from silver than gold.
According to reports, Global demand for silver is anticipated to reach Rs. 1,155 million ounces by 2025. It means silver will grow at a CAGR of 2.98%.
It would touch 1.29 billion ounces in 2023. The last this metal breached the one billion figure was in 2015. Green infrastructure demand and investment in renewable energy will further spurge the demand for silver, and it will help silver give magnificent returns in the long run. The metal’s rate in 2019 was Rs 40,600/kg and currently trading at 63,800.
Conclusion – Silver is an investment avenue for those having less liquidity. Increased industrial use of metal may contribute to the rise of its demand and give investors a reason to smile.
