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 with different supply and demand factors to consider. Both metals are commonly invested assets, but silver is an entirely different investment which can realise substantial profits but has a considerable initial VAT outlay and higher premiums. It’s because of these differences that gold remains the primary choice for most UK investors, but owning both gold and silver together can be beneficial for a diverse portfolio.

Gold v Silver

When considering gold v silver as an investment, it's important to understand the differences between the two metals. 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 struggled in recent years to keep pace with gold's record-breaking gains, until 2025 that is. In 2025 silver gained 148%, rising from a low of $28.96 per troy ounce, to hit a new all-time high of $71.99. Silver then hit a new all-time high of $11845 on 29th January 2026 before dropping back.

One of the key factors for investors to consider when thinking about gold v silver as an investment however, is the tax considerations.

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 or VAT often encourages investors to turn to gold, and is sunk cost for silver that is important to weigh up. Gold can often be bought at low premiums of a few percent above the market spot price, this means gold doesn't have to go up much in price before you break even. With silver's 20% VAT, and generally higher premiums, investors buying physical silver would need the silver price to rise much more to make a profit.

However, silver could 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 12 months, and timing the sale may be more important.

Ideally, silver investments should be kept many years, however it is believed based on recent history keeping your silver for at least a year could 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 December 2011 and over £72,000 18 years later in March 2026.

Pre-owned silver could give investors in silver an alternative option. With lower premiums, second hand silver bars or second hand silver coins are a great way to buy silver closer to spot price, meaning more silver for your money.

Pre-Owned Silver Coins

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from £7.60

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from £7.60

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Pre-Owned Silver Bars

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from £2.40

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from £2.40

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Gold and Silver Portfolio Diversification

Owning physical silver bars and silver coins can offer an effective way of diversifying an
individual’s investment portfolio, therefore spreading risk and providing additional protection
against other investments.

With silver now setting new records and holding at historically high levels, an investor may
question whether now is a good time to buy. Some analysts believe 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 and AI data centres. 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 fiat currency (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. The smallest gold items typically sold are worth around £100 at the time of writing, while smaller silver coins or bars could be worth a few pounds at most, making them a good option for those seeking a lower-value option.

Gold Bars

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from £85.70

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from £85.70

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Gold Coins

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from £72.60

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from £72.60

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Gold Britannia

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from £363.00

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from £363.00

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Gold Sovereign

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from £756.30

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from £756.30

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Silver Britannia

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from £8.52

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from £8.52

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Silver Bars

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from £2.40

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from £2.40

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Silver Coins

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from £3.72

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from £3.72

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1kg Silver Bars

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from £1,541

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from £1,541

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Related Links: 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 sales@bullionbypost.co.uk
and we will get back to you as soon as possible.