Is Silver Outperforming Gold?

Since 2006, there have been signs that silver is outperforming gold on a percentage basis. From the beginning of 2006 to the end, silver was up around 75% from its low to its high versus gold being up about 25%. Prior to that gold has been the front runner.

As investors show more concerns on the falling of the US dollar, they look to purchase precious metals for protection and diversity of their portfolio. This is one way they can preserve their wealth if there ever was a global economy melt down. It's also called having hard assets. With the price of gold near $700 an ounce small investors can afford to purchase more silver as it trades closer to $14.

Several factors play key roles in the continuation of the bull run, inflation, the U S Dollar, and interest rates to name a few. Typically when a currency falls, metals like gold and silver go up because of the flight to quality, meaning protection if a government currency fails. Rising inflation creates an increase in metals also, however if the Fed raises rates that controls that. So as you can see, there are several factors one needs to be aware of when wanting to invest in gold or silver.

One reason for the interest in silver is its usage. Silver is not only used in jewelry but has a diverse industrial use. You will find silver applications in photography although since the digital camera that demand has gone down. However there is usage in dental alloys, bactericides, solder and brazing alloys, electrical contacts, batteries, mirrors, solar panels which will increase down the road as we focus on energy savings, and much more. Both have monetary values, however; gold does not have all the diversity of the industrial usage as does silver. Some other recent discovery of usage of silver are:

An approval for silver/copper ionization as a primary treatment of Legionella in hot and cold water systems in hospitals and nursing homes.

The DermaSmart patch for eczema or psoriasis is embedded with silver particles to prevent growth and odor.