Silver vs gold: Which metal can give me a bigger profit when selling them?
Looking to sell silver jewellery? You may have a more difficult time finding a buyer
Dubai: Just like gold, silver has a great resale value. Though it is less precious than gold, it is significantly more expensive than other precious metals. In case you are in dire need of money, you can sell your silver deposits and arrange for cash. More so, because the cost of silver is much more stable than gold.
“Apart from a better resale value, a perk to selling your silver for cash is that the metal’s price stability offers you instant payment, as opposed to selling your gold and possibly missing out on profits due to a number of volatility-related factors,” said Georgina Effel, a Dubai-based precious metals analyst.
“Also, the stability of prices also allows licensed silver buyers to offer you what is the realistic value of your belongings. Moreover, as the buyers are certified, the chances of them duping you are rare, while on the other hand, an uncertified buyer can be a potential threat.”
Apart from a better resale value, a perk to selling your silver for cash is that the metal’s price stability offers you instant payment
How price stability of silver, gold affects its profits?
As of January 12, the silver resale value in the UAE was at $23.59 (Dh86.59) per ounce, or $0.93 (Dh3.42) per gram. Over the last 10 days, the price of the metal has stayed more or less the same. But how much of a profit can you make when selling silver?
Indicative of its price stability, the precious metal traded up from around $22 (Dh81) per ounce in late January to about $26 (Dh95.5) per ounce in early March before falling to approximately $18 (Dh66) per ounce in September. It has since rebounded to around $21 (Dh77) per ounce in late November.
In comparison, it’s even more difficult when selling gold given that its price fluctuates a lot more and to a greater degree than silver. A 3 per cent gain in December last year took gold to $1,814 (Dh6,662) per ounce, eked out a yearly gain of a mere 0.4 per cent, with sellers not being able to make a sizable profit.
In terms of investing in gold versus silver, it is noted that silver is still traded at a much more economical price
Can you profit when you sell your silver jewellery?
“As a rule, it's difficult to resell silver jewellery for the original value. That's primarily because most silver jewellery is an alloy, which means refiners have to melt it down before they can repurpose it for coins, bars, or even different jewellery. In translation, the value of jewellery is often subjective,” said Effel.
So if you were looking to sell silver jewellery, you will likely have a more difficult time finding a buyer compared to if you were selling gold jewellery.
“Another reason that’s most often cited as the reason for this is the gold market’s recognition as being comparatively more widely known and the fact that it offers a wider array of safer, reputable places to invest,” she added.
• Inflation hedge: Silver also acts as an inflation hedge, given its inherent worth, unlike currencies. Silver holds long-term value, especially when interest rates are low and fixed-income investments aren't earning much.
• Relatively cheap: Silver is comparatively less pricey when compared to gold. Globally, its price has never exceeded $50 (Dh183) an ounce. Gold trades in the four figures. So silver is much more affordable.
Gold versus silver: Which is better?
The two precious metals have several major differences. “The silver market is much smaller than the gold market, and as it's more thinly traded than gold, silver can demonstrate far greater volatility, or price swings, than its glittering counterpart,” said Zubair Shakeel, a UAE-based investment manager.
For instance, historically, the grey metal has frequently leapt nearly 15 per cent in a single day, for example. Moreover, silver also takes up more physical volume than gold.
“Since the same size investment literally buys more silver than it does gold, meaning holding silver will take up a lot more space and will cost more to store and transport – not to mention that it tarnishes too,” added Shakeel.
Key takeaways
As opposed to its shinier counterpart, silver can be a good investment — both as a cheaper alternative to gold and also for some intrinsic qualities of its own. However, silver also comes with unique considerations and risks that investors need to consider.
Gold dominates the spotlight when it comes to safe investing, often considered the go-to for those looking for an alternative investment to traditional stocks. But from time to time, the financial spotlight falls on silver, and it shoots up in price, even outperforming its yellow-metal peer in the market.
This is why many investors, both new and experienced, turn towards commodities like silver when the stock market has a poor outlook or in times of global economic recession or geopolitical turmoil.
Since the same size investment literally buys more silver than it does gold, meaning holding silver will cost more to store and transport
“Price of gold has always trades at exorbitant prices because of the huge imbalance in its demand and supply. The global trend and brand name of gold also contribute in its unreasonably high pricing,” added Shakeel.
“But comparatively, in terms of investing in gold versus silver, it is noted that that silver is still traded at a much economical price. Even the petty investors can go ahead and invest in silver easily.”
This is why silver is known as a poor man’s gold, because comparatively gold, which is traded at over $1,800 (Dh6,611) per ounce, silver trades at about $25 (Dh100) per ounce.