Why Gold Will Outpace Silver Through The End Of 2020

Gold and silver have been on a tear in 2020.  Search the web for these precious metals and you will find plenty of articles touting the merits of both yet silver is getting most of the media shine (pun intended).  It is now en vogue to predict silver will outpace gold for the remainder of 2020 and beyond.  However, gold is still the better investment of the two precious metals for the rest of the year and across posterity.  Here’s why.

Gold is a Legitimate Safe Space to Place Your Money

Whether the economic tanks, the presidential election is contested or there is a war, gold is likely to hold its value or increase.  Gold has fared quite well across history regardless of how bad the economy has performed.  The same cannot be said of silver.  Though silver represents a safe haven, it does so to a lesser degree than gold.  The bottom line is periods of uncertainty are nearly guaranteed to steer money toward gold as opposed to silver and other precious metals.

Gold is Held in High Regard Across the Globe

Gold is essentially a form of global currency.  Gold can be used to barter regardless of one’s physical location.  The same cannot be said of silver.  Though cultures throughout the world certainly value gold, they do not view it in the same light as gold.  If the economy continues to sour, that many more investors will turn to gold in the months ahead as they are well aware of its inherent value that transcends geography.  Furthermore, gold also holds comparably more value than silver as it serves more practical purposes than silver.

The Fed’s Money Printing Will Continue to Boost Gold

The Fed is pumping the economy with money in an attempt to stimulate consumer spending.  However, the onslaught of cash is not doing much but sitting in the banks’ coffers.  Banks are not inclined to lend the money due to the inherent risk of doing so.  Furthermore, consumers and businesses lack the confidence necessary to borrow from the banks. 

The abundance of newly-printed cash ultimately decreases its value, sending that many more investors toward gold and stocks rather than holding cash positions.  Though silver is certainly attracting some money, history shows those looking to exit cash are more inclined to invest in gold than any other precious metal.

Silver Follows Gold’s Lead

The historical charts show silver follows gold quite closely.  Therefore, if gold increases, silver is not likely to be far behind.  However, silver is quite volatile compared to gold, meaning it has the potential to quickly decrease by a considerable amount while gold holds steady or slowly climbs even higher. 

In short, silver has more inherent risk than gold.  This period of economic uncertainty is not the right time to take risks with your hard-earned money.  Though gold might not have the same upward potential as silver, it is more of an investment as opposed to a gamble simply because it is less volatile.