Four Key Differences Between Gold and Silver – Morgan Stanley

To a greater or lesser extent, Both Gold and Silver can serve as a hedge against a possible economic or market recession, as well as during prolonged periods of rising inflation.. The economists of Morgan Stanley They point out four factors to take into account when investing in Gold or Silver.

Silver may be more tied to the global economy

“Half of all Silver is used in heavy and high-tech industry, according to the World Silver Survey. As a result, Silver is more sensitive to economic changes than Gold, which has limited uses beyond the jewelry and investment. When economies take off, demand for silver tends to grow.”

Silver is more volatile than Gold

“Silver price volatility can be two to three times that of Gold on any given day. While traders can benefit, such volatility can present a challenge in managing portfolio risk.”

Gold has been a more potent diversifier than silver

“Silver can be considered a good portfolio diversifier with a moderately weak positive correlation to equities, bonds and commodities. However, Gold is considered a more powerful diversifier. It has always been decorrelated to equities and has very low correlations with other major asset classes. Unlike silver, gold is less affected by economic downturns because its industrial uses are quite limited.”

Silver is currently cheaper than Gold

“Per ounce, silver tends to be cheaper than gold, making it more accessible to smaller retail investors who want to own the precious metals as physical assets.”