How The Two Metals Compare As Investments

The recent worldwide monetary crisis has yielded historically high prices for gold. Closed-end funds (CEFs) are similar to gold ETFs and trade like a stock but are structured as trusts. CEF shares represent an undivided interest in the fund’s entire investment portfolio. Tax treatment of CEFs is more complex and presents both advantages and disadvantages. An advantage of non-U.S. CEFs is that long-term investments are taxed as LTCGs rather than as collectibles, which can increase after-tax returns. The disadvantage of non-U.S. CEFs is that federal tax reporting is more complex because they are passive foreign investment companies. Although beyond the scope of this article, the tax complexities can be mitigated by making a qualified electing fund election under Sec. 1295 on Form 8621, Information Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund.

Silver coins, are a popular way to hedge against inflation and balance portfolio risk. It has historically been the most affordable precious metal. Unlike Gold, Silver purchases do not have to be reported. It has unique properties, which make it ideal and essential for global industry. And creates a situation where there is simply no substitute. Silver has huge industrial applications. It is found in most everything from cell phones to computers. As the worlds thurst for electronics continues to grow, so does the demand for more silver. Also, the medical industry has found almost as many ways to use silver as the industrial world. These applications makes it a consumable investment. And not just another pretty face.

Compared to gold, the price of silver is very much more volatile. It is most driven by demand and supply (and speculation), and thanks to its high industrial demand, it is also more exposed to economic cycles than gold, which is most used for ornamental jewellery.

Bank certificates are simply gold on paper; a promise to pay you for your investment. Because of the international nature of some of these certificates and the possible lack of regulation, you may be only buying a piece of paper with no gold backing its value.

As well as gold, why not consider silver investing with Physical Gold Limited and view products in our silver shop. Whilst the concept of investing in gold may be familiar, even to those who have never done it, silver investing through reputed silver dealers remains slightly more marginalised and outside of the thought process of many investors.

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