Precious metals such as gold and silver have many attractions from an investment point of view.
Both metals are viewed as a long-term store of value. They are durable, portable, and easily valued. As a result, civilizations across the world have used both gold and silver to protect their wealth for thousands of years.
Gold and silver also offer excellent portfolio diversification benefits. Their price movements are uncorrelated to the movements of other asset prices, such as shares and property. Adding precious metals to an investment portfolio can increase the diversification of the portfolio and reduce the overall portfolio risk.
Furthermore, precious metals offer protection against financial system risk. Gold in particular is viewed as a “safe haven” asset. This means that during times of financial uncertainty or stock market panic, investors often buy large amounts of gold, pushing its price up.
However, gold and silver each have unique investment features. If you are considering adding precious metals to your portfolio, it’s important to understand the difference between the two metals.Read More