Fiat currency constantly fluctuates in value, driven up and down based on unpredictable social and political circumstances. During times of volatile economies and currency depreciation, smart investors turn to precious metals. This way they try to diversify their portfolios and protect their hard-earned wealth. Nowadays, precious metals are the best hedges against uncertainties. The question we hear quite often is, “What is better: stacking gold or silver? Coins or Bars?”
Trying to be impassionate, lets’ talk about pluses and minuses of both metals.
Staking Gold or Silver?
- Liquidity
Gold has a much larger liquid market with investment and jewelry demand essentially driving it.
- Volatility
Gold is less volatile than silver since it falls less in a bear market and rises less in a bull market.
- Price & Storage
Gold takes up less space to store than silver since the latter requires 128 times more storage space. Gold is lighter and easier to carry: $50,000 worth of gold weighs about 2.6 pounds while the same value of silver – about 189 pounds. Apart from that, it is cheaper and hassle-free to store gold, as it doesn’t tarnish over time.
- Speculative nature.
Silver is more speculative than gold since it can be attractive during down cycles when the price of the metal is low.
- Government’s attitude
Central banks own over 34,000 tonnes (1.09 billion ounces) of gold in official reserves, whereas they have only a very small stockpile of silver.
- Susceptibility to economic booms
The state of the world economy has a more significant impact on silver demand than gold. The silver demand for industrial uses is higher in a stable economy and weaker in a recession or deflation. 56% of silver’s supply is used in the industry, while it is only 12% for gold.
Considering all the features mentioned above, we may assume that answering the question “Stacking gold or Silver”, gold is still a better investment for the average precious metals holder.
Coins or Bars?
What is the difference between a gold coin and a gold bar?
It is an essential question, especially if you’re a beginner investor.
- Legal tender
Coins have legal tender status being produced by a sovereign government’s mint. On the contrary, bars are produced by private mints and have no legal tender.
- Collectibility
Coins are more collectible than bullion bars.
- Premium & Spot Price
Gold and silver bars generally have the lowest premium over spot price. That’s why serious, large-scale investors are more interested in holding bars at the lowest price (as opposed to collecting legal tender coins). Coins’ premium is generally a little higher than the metal’s spot price, mostly because of their collectability, status as legal tender, and rarity.
- Storage & Transfer
Bars are compact, stackable, and easy to store. Apart from this, You can stack bars from various mints.
- Authenticity
Private mints typically issue bars with certificates that authenticate their value.
- Barter
It is easier to trade coins in a crisis, making them highly liquid. The largest bars (10 oz gold bars and 100 oz silver bars) are harder to barter than smaller bars or coins in the face of a financial crisis.
Basically, the choice of a gold bar or gold coins generally depends on your needs and the amount of precious metal you want to obtain. Mind, that apart from buying standard gold and silver coins, investors can purchase “junk coins.” Junk coins are the ones whose value is driven by its metal content only. Remember, that opposite to bars, these coins are not pure gold or silver, but rather have a percentage of precious metal.
Easy Gold Ownership Process from Novem Gold
Novem Gold has designed digital gold ownership products that enhance the access and flexibility of gold trading.
Meanwhile, Novem Gold’s NNN tokens are gold-backed coins that are revolutionizing the gold trade. 21 kilos of securely stored LBMA-certified physical gold back the tokens on the NEO blockchain. These tokens can be fully redeemed for the precious yellow metal. With the NNN token, you can own gold without the hassle of access, validation, and storage from anywhere in the world.
Recent Articles
