How Much do Gold & Silver Investments Pay?

• Investors may choose between gold and silver investments for their investment goals.
• Gold is typically viewed as a safe haven and precious metal, while silver is viewed as an industrial commodity. Both metals have their benefits and their drawbacks.
• Gold is seen as more valuable and scarce, while silver is considered to be more malleable. The gold-silver ratio compares how many ounces of silver it takes to purchase one ounce of gold.

While gold prices historically have fluctuated greatly over time, they generally have risen over time and fallen dramatically at times. In 2019, for example, the price of an ounce of gold was $1,224.65, according to the U.S. Commodity Futures Trading Commission (CFTC).
Silver, on the other hand, trades for a lower price per ounce. In 2019, the price of an ounce of silver was $15.73, according to the CFTC.
One of the major attractions of gold and silver investments is that they are less volatile than many other investments. While the value of gold tends to rise and fall dramatically, silver's value is more likely to fluctuate within a relatively narrow range.
Both gold and silver investments have displayed historically strong returns over the long term. For example, between 1970 and June 2020, the price of gold rose nearly 2,000%, according to Investopedia. Silver, too, has displayed strong returns over the long term. The price of silver rose nearly 600%, between 1970 and June 2020.

How Much is Gold Worth?

The fixing of the gold price, which is done twice daily in London, is $1,250 per ounce. The price per troy ounce of gold, also called the spot price, is constantly changing. The spot price fluctuates based on a number of factors, including:
Hoarding and demand: The volume of gold held by investors, manufacturers, and central banks is a good indicator of global demand. For example, in 2015, demand from China exceeded 1,000 tons for the first time.

Supply: The quantity of gold held by investors, manufacturers, and central banks is an indicator of global supply. The supply of gold rises and falls based on demand.

New discoveries: Gold deposits are sometimes found in new locations. New discoveries lead to higher supply and a drop in prices. For example, in 1986, gold was discovered in the Witwatersrand Basin in South Africa, which led to a glut of supply and a drop in prices.

Inflation: When inflation rises, investors buy currencies, bonds, stocks, and commodities, which can drive up the price of gold. Most of the time, gold prices rise when the U.S. dollar falls.

Interest rates: When interest rates fall, investors buy gold.

Currency value: Falling currencies generally lead to higher gold prices. For example, in 2015, the Canadian dollar fell more than 30% versus the U.S. dollar, which drove up the price of gold by 25%.

U.S. dollar value: When the U.S. dollar falls, the price of gold rises.

Gold value: The price of gold per troy ounce depends on supply and demand as well as other factors.

Other Gold Investments

Gold and Silver Bullion

Gold and Silver bars: These are the most popular bullion products. They come in 1, 10, 100, 1,000, and 1,000-ounce weight denominations. Due to their weight, they are quite portable.

Gold and Silver rounds and bars: These are similar to bullion products, but rounds and bars are more dense. They tend to be more expensive than bullion products.

Gold and Silver coins: These are similar in design to bullion products, but they are legal tender. Coins come in 1, 5, and 10-ounce denominations.

Gold and Silver certificates: These are issued as proof of ownership of a specific amount of gold or silver.

Gold and Silver derivatives: These investment products derive their value from the price of gold or silver.

Gold and Silver mining stocks: These are stocks of companies that mine gold and silver.

Gold and Silver futures: These are futures contracts, which pay out the value of gold and silver at a set date in the future.

Gold and Silver options: These are contracts that grant the right to purchase gold or silver at a set price at a certain date in the future.

How Silver is Measured

Ninety-five percent of the world's silver is held in the form of bars, coins, and rounds. The coins and rounds vary in size, weight, and purity, but their weight is given in grams (g).
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How Gold is Measured
Gold's purity is measured in karats (K). 24K gold is 100 percent pure, while 22K gold is 91.67 percent pure.
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Other Silver Investments

Aside from mining, there are a number of other investments you can lock into silver.
Exchange Traded Funds (ETFs): ETFs are traded on the stock exchange, and like mutual funds, trade on an exchange at prices that are often very close to their actual net asset value (NAV). Since ETFs are traded on an exchange, they require a brokerage account to buy.

Investing in Silver ETFs is similar to investing in any other ETF. You have to select the ETF that meets your investment goals.

There are silver ETFs designed for short-term traders, while others have long-term strategies. Some silver ETFs are mutual funds, and others trade like stocks.

The advantage of silver ETFs is that you don't have to buy physical silver. You can invest in a silver ETF through an online broker.