Buying silver or gold is an excellent way to build long-term wealth and diversify your investment portfolio. Both precious metals have a history of maintaining their value through market volatility and can be stored as a physical asset, like paper currency, which you can access at any time.
Whether you buy gold or silver coins, including investment coins, numismatic coins, or bars, understanding the differences between gold and silver bullion can help you decide which metal to invest your money in.
Learn why buying gold or silver in the Wolverine State is an excellent investment and how buying gold and silver in Michigan at AU Precious Metals can help you decide the right option for diversifying your portfolio.
Affordability Per Ounce
Silver is much more affordable than gold, making it a more popular choice for investors in Michigan. As of November 15, 2022, the current silver spot price is $21.78, while the spot price for gold is $1,771.99.
While investors always pay a premium for physical gold bullion on top of the spot price, precious metals are exempt from sales tax in Michigan. This tax exemption makes buying from a dealer located in Michigan an excellent choice.
Gold or silver can boost your financial wealth depending on your available capital. If you have a limited investment budget, opt for silver; if you can afford gold, it may be the better long-term option.
Consumer Demand
Michigan’s high demand for precious metals is because of a number of factors, including a strong economy, industrial applications, and a robust manufacturing sector. Michigan’s leading industries include advanced manufacturing, medical device fabrication, and automotive manufacturing, all of which require precious metals.
More broadly, the demand for gold rose 10% in 2021, while the demand for silver surged by 19% in the same year. Silver can prove a worthwhile investment based on consumer demand, even during economic downturns. This makes it a preferable investment option for those who keep an eye on the demand market.
Market Volatility
Although it’s more of a behind-the-scenes factor, each metal’s industrial usage may impact your decision to buy silver or gold. The world’s gold supply only accounts for a minimal amount of industrial uses, whereas a significant portion of silver stores go towards industrial uses such as electronics, automobiles, and solar panels.
Due to its many industrial uses, the value of silver is more volatile and easily influenced by the global economy. As industries grow, so may the demand for silver, whereas gold values remain relatively stable despite economic swings.
Consider your threshold for investing and whether you prefer to buy an asset that can grow or fall quickly or whether you’d prefer a stable investment. If you want a less volatile investment, gold is the clear winner.
Hedge Against Inflation
Michigan’s gold and silver prices are closely watched by investors and market analysts around the world. In the past year, gold prices have ranged from around $1,619 per ounce to an intraday higher of $2,074.60 per ounce, while silver has fluctuated between $18 and $26 per ounce.
In times of inflation, gold and silver values have risen. This is because they are inversely tied to the U.S. dollar; when the dollar’s value falls, the value of these metals rise because they are easier to buy with other currencies.
In this economic situation, silver values increase more than gold because of its industrial demand. While both can hedge against inflation, silver may be a better choice.
Portfolio Diversification
Portfolio diversification mitigates investment risk, so you are less likely to experience financial distress due to a negative event that impacts a single holding. Investing in any physical commodity can help diversify a portfolio primarily based on stocks, bonds, or real estate. Both gold and silver offer unique diversification opportunities.
Silver has a low correlation to stocks and bonds. Correlation is the degree to which two variables or assets relate to each other. This means that as traditional assets decrease in value, silver’s value rises, making it a good way to diversify your portfolio. However, gold has a significantly lower correlation with stocks and major asset classes. This is due to gold’s limited industrial use, making it less affected by economic fluctuations.
Buy Gold and Silver at AU Precious Metals
If you’re looking to invest in gold, silver, or platinum bullion, it is crucial to consult an experienced professional and make an informed decision. AU Precious Metals is a locally-owned gold, silver, platinum, and palladium bullion dealer in Michigan. We use decades of knowledge and experience to give you the best price for your precious metals.
At AU Precious Metals, we guide you through precious metal investing as a form of wealth preservation or portfolio diversification. Whether you’re a first-time customer or a seasoned investor, we can help you navigate the United States and local tax laws regarding precious metal investments and help you find the right solution to buy or sell gold and silver to meet your financial goals.
Contact us at (248) 833-6133 to take advantage of the current precious metals market and grow your investment portfolio.