You can easily see that, in percentage terms, silver rises much more than gold in bull markets and falls much more than gold in bear markets. So, as an investor, if you buy during a bull market, the story goes that silver will give you a higher return than gold. Gold and silver are especially popular commodity investments, largely because of their historical relationship with money. Governments once used gold and silver to make their currency.
Buying Gold with IRA is also a popular option for investors looking to diversify their portfolios. Although no major economy is using gold or silver as the basis of its currency anymore, investors continue to view these two metals as active deposits of value. Silver is more volatile, cheaper and more closely linked to the industrial economy. Gold is more expensive and better for diversifying your overall portfolio. One or both of them may have a place in your wallet.
Both silver and gold can function as safe haven assets, but gold tends to have a better track record over longer periods of time. Therefore, when the ratio is higher and investors believe that it will fall along with the price of gold compared to silver, they can decide to buy silver and take a short position on the same amount of gold. It may be a better financial decision to expose yourself to gold through the funds and stocks of gold companies. Demand for gold and silver comes from different sources, with gold being primarily an investment asset and silver an industrial asset.
The end of the gold standard, together with double-digit inflation, caused an almost mythical rise in the price of gold. Therefore, even if gold mining production were to double (which would be an extraordinary feat), the flow of new gold to the market would only be 3%.