At a time when both The American and European economies are facing uncertainty, two precious metals are increasingly being looked at as safe havens. These are silver and gold. Both of these metals have seen their prices go up substantially, as the largest economies have been in doldrums.
Even though there has been a scurry by investors to invest in both of these precious metals one is sometimes forced to wonder, which of these two is a safe bet? Or rather, in times of a crisis which metal would fetch you more returns? Let us try to answer this question by examining the merits of both metals.
The glitter of gold
Gold, as you may already know is the only precious metal has seen its prices rising for more than a decade at a stretch. On the other hand, silver has seen its price per ounce triple since the year 2009 and even touched an all time high of $ 49 per ounce in the middle of the previous year. Gold is looked at, not only as an investment; its sheen has been dazzling mankind from times immemorial.
Till date, people in the east especially in countries such as India and China procuring gold on a special occasion is considered auspicious. Both these countries are going are all out to dint into retail investors that some part of their income should be dedicated to purchase of gold for investment purposes.
This seems to have had an impact and the therefore the demand of physical gold has gone up over 10 per cent from the previous year from these two countries alone, despite a 25 per cent rise in the price of gold. Having said that about gold , there is enough reason to believe that the price of silver will go up considerably in the near future.
The upwards journey of silver
Consider some statistics to understand this. A common theory used to analyse silver is the silver and gold ratio. Or in other words this ratio determines how much silver would be required to buy one ounce of gold. This is based on a mathematical assumption that states that the quantity of silver that is to be found on the crust of the Earth is 17 times the quantity of gold. If that is true, the silver gold ratio should not go below 17:1.