Should I buy Gold or Silver?
Many investors ask us whether they should buy gold or silver when investing in precious metals. For those with a limited budget it is worth taking the time on deciding whether to buy gold or silver, but the savviest investors will usually own both. While gold can offer the ultimate insurance and protection against uncertain economic times, silver is usually a more speculative investment. Both metals are commonly invested assets, but silver is an entirely different investment which can realise substantial profits despite the initial VAT outlay. It’s because of these differences that owning both gold and silver together can be beneficial.
Gold v Silver
A speculative investment
Silver does not offer the same level of security as gold, due to its price volatility, however it
remains a physical asset that is incredibly useful. This means that like gold, silver will
always have an intrinsic value, and as a finite asset cannot simply be devalued by inflation.
One of the big differences of silver over gold is it's industrial demand. Silver is used widely in
electronics and a number of other manufacturing channels. This means that high production
output will mean higher demand for silver. The price fluctuations of silver result in more
opportunities to buy and sell at profit, making it a more speculative investment. The price
can move significantly and quickly, requiring careful monitoring of the world's financial sector,
but offers buying and selling opportunities.
Silver has proven to be a very good investment. In the three years between December 2008 and
December 2011, the silver price increased 233%, substantially outperforming many other popular
investment type such as stocks, property and even gold. 2019 saw silver gain 28.9% at its peak,
and outperformed gold in Dollars, again demonstrating its appeal as a speculative investment.
As of 2024 silver is up more than 40% for the past five years, but has remained relatively flat for the past three years. With gold climbing to new all-time highs, and the gold-silver ratio rising, silver continues to look undervalued, and ready to make significant price gains.
UK Gold v Silver Tax Considerations
Unlike gold bullion, all silver bars and coins are taxed at a rate of 20%. Paying
Value Added Tax
VAT often encourages investors to turn to gold. However, silver is still a good option, it is simply
advised that buying silver is very much a long term investment and should be owned for at least
Ideally, silver investments should be kept many years, however it is believed based on recent history
keeping your silver for at least a year may be long enough to recover the 20% VAT initially paid,
and to return a profit. For example, if an individual had invested £10,000 (£12,000 including VAT) in
silver in December 2008, their silver bullion would have been worth over £33,000 three years later in
Gold and Silver Portfolio Diversification
can offer an effective way of diversifying an
individual’s investment portfolio, therefore spreading risk and providing additional protection
against other investments.
Despite silver being relatively low versus the 2011 peak, it is widely thought that silver will
continue to strengthen in price and demand due to the fact that silver is still widely used in
industry despite its status as a precious metal. As one of the best electrical conductors in
the world, more and more tech is using silver in a variety of forms; in electric cars, solar
panels, and in the newest computers. Read our silver price forecast for our thoughts
on the prospects for silver.
Easy to exchange
With the world economy mired in uncertainty and slowdown, many individuals choose to buy
silver as an alternative form of currency to protect themselves against any possible situation
where money loses much or all of its value.
It's more than a bit of a stretch to say that
(Pound coins and notes) will be scrapped
by the Bank of England and the economy will collapse, but the point is that British bullion coins
DO have a face value and ARE legal tender in case some disastrous event does happen.
With this in mind, silver offers a different option to gold, as small units of silver - such as 1oz coins -
provide the ideal currency to exchange or pay for everyday items due to their relatively small value
per unit. In comparison, gold coins and bars, which are around 80 times more valuable than silver,
would be better used to exchange for much larger items or assets.
If you have any questions about gold bullion investment, please feel free to contact our knowledgeable and friendly team on
0121 634 8060 who will be happy to talk your through any queries you may have. Alternatively, you can email us at firstname.lastname@example.org
and we will get back to you as soon as possible.
- How To Buy Gold
- How to Buy?
- Payment Options
- Delivery Options
- Gold Storage
- Storage at Brink's
- Gold Investment Guide
- Why buy gold?
- Is gold a good investment?
- Why Physical Gold?
- Best Time to Buy Gold
- Gold Bars vs Coins?
- Gold vs Silver
- Gold - Silver Ratio explained
- VAT on bullion
- Captial Gains Tax & Gold Bullion
- UK Legal Tender Coins
- Top 5 Gold Investments
- Top 5 Silver Investments
- Gold vs ISAs
- Gold vs Buy-to-Let
- Gold vs FTSE 100
- Gold vs Bitcoin
- Where to buy gold?
- Why buy from us?
- Where to sell gold?
- Coin Shops
- Gold Price Forecasts
- Top 10 Gold Producers
- Top 10 Gold Reserves
- Gold Britannia vs Sovereign
- Britannia coin designs
- Sovereign coin designs
- Sovereign Mintages
- Sovereign mint marks
- British coin specs
- What is a proof coin?
- Royal Mint bullion
- The Queen's Beasts
- Royal Mint Lunar Coins
- Bullion Refiners
- British coin mints
- Gold Tola - India & Pakistan
- Bullion Index