Among the many investment options are raw materials. That is, you can invest in physical products such as oil or precious metals. “Precious metals tend to behave well in periods of low real interest rates and economic transition”, stand out from Renta 4. And among them, gold or silver stand out.
Investors can purchase these metals directly in the form of bars or coins. But, in addition, also other options to invest in gold or silver – or any raw material – is to buy shares of companies closely linked to these markets, resort to an exchange-traded fund (ETF, for its acronym in English) or hire derivative products s. Derivative products are financial instruments whose value derives from the evolution of the prices of another asset, called the “underlying asset”.
Among the derivative products, from eToro they explain that “a simple way to invest in the raw materials market is using contracts for difference -CFD, for its acronym in English-“. However, the CNMV, the financial regulator, warns of “the possible peculiarities and specific risks that may arise in each case.”
Hedge against inflation
Whichever option is chosen to invest, many investors want to choose only one precious metal to invest in and must choose between silver or gold. Both are recurring assets in periods of inflation. They register gains, “partly because the rise in the prices of goods and services often coincides with a weaker dollar,” they point out from Selfbank. But each metal has its own characteristics.
The experts of the IG platform highlight that gold has been considered “the best refuge asset to save savings” and point out among its advantages the volatility and liquidity of the market. Its current price exceeds 1,900 dollars per ounce (about 1,760 euros each ounce of gold). Falls have been recorded in recent weeks, especially after concerns about an economic slowdown in China, the world’s largest consumer of gold.
Beyond past profitability-which, as in any investment, does not ensure future returns-other factors must be taken into account. From Raisin they affirm that the profitability of gold is influenced by the moment of purchase and sale, especially if we do not acquire physical gold, as well as the cost of storing and insuring physical gold.
Silver, a more volatile asset
In the case of silver, its price is well below that of gold. Its current cost is around 22 dollars per ounce (just over 20 euros per ounce of silver). It also registers falls in recent weeks, but it is a more volatile asset than gold. In his case, the IG platform points out that it is an asset that “moves faster than gold and has high volatility with broad movements that are easily identified.”
Furthermore, while gold is an asset that has historically been highly valued, silver is gaining weight thanks to its increasing application in heavy industry and high technology. This is one of the factors of its performance and its link to the evolution of the world economy. “When the economies take off, the demand for silver tends to grow,” they say from Selfbank.
