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June 19, 2024
PI Global Investments

Gold IRA vs. silver IRA: What investors should consider

Both gold and silver IRAs have unique benefits for your portfolio.

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Investors were driven to precious metals throughout 2023 for a variety of reasons.  

“Primarily, economic uncertainties, including inflation fears and geopolitical tensions sparked by the wars in Gaza and Ukraine, as well as logistical concerns in the Persian Gulf, have driven investors toward ‘safe-haven’ precious metals such as gold and silver,” says Collin Plume, the founder and CEO of Noble Gold. 

For those looking to diversify their portfolios and hedge inflation long-term, gold and silver IRAs are worth considering. Like other types of IRAs, they’re tax-advantaged retirement accounts that come with annual contribution limits. However, instead of investing in assets like stocks, bonds, CDs and money market funds, account managers use the funds to buy gold and silver. 

But is a gold or silver IRA better for your portfolio? We broke down some considerations below.

Start by exploring your precious metal investment options here to see if it’s right for you.

When a gold IRA is the better investment

“Gold IRAs are often preferred by those seeking long-term wealth preservation. Gold is less volatile than silver and has a consistent track record of holding its value,” says Plume. “Over the past 20 years, gold has yielded a 1,012% return versus silver’s 941% return,” explains Plume, “It’s an excellent choice for investors looking for stability and a hedge against economic downturns.”

When a silver IRA is the better investment

“Silver IRAs, on the other hand, are attractive due to silver’s lower price point compared to gold, which is 8,525% more expensive according to today’s market data,” says Plume. “Silver has industrial uses, especially in electronics and electric vehicle manufacturing, which further adds to its value,” he adds.

Explore your gold and silver IRA options here today.

Why might you want to invest in gold and silver?

You may want to invest in both gold and silver IRAs, but silver tends to be a better short-term investment.  

“Both gold and silver IRAs offer unique benefits and can be vital components of a diversified investment portfolio. Most IRA investors prefer concentrating their holdings in gold, and gold-heavy portfolios are what constitute the majority of our accounts,” says Plume. 

He adds, “However, silver may appeal more to non-IRA investors with a higher risk tolerance and an interest in capitalizing on market fluctuations via commodities trading. It’s also a good option for investors starting with a smaller budget.”

Is a precious metal IRA right for you?

Whether a gold or silver IRA is right for you will depend on factors like your risk tolerance and your confidence in the fiat system. While precious metals historically offer lower returns than the stock market, they tend to perform well during stock market downturns and recessions. If you want that protection, a common rule of thumb is to invest around 5% to 10% of your portfolio in precious metals. 

If you’re still on the fence deciding between gold or silver, Plume suggests asking yourself if you are comfortable with the inherent volatility of silver, or if you prefer the steadiness of gold. “For most IRA investors, the latter is the clear choice. With that said, a mix of both gold and silver can provide a balanced approach, leveraging the strengths of both metals to complement one’s retirement portfolio,” he says. 

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