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Morgan Stanley highlights four critical differences between gold and silver as investment assets.
Economic Sensitivity: Silver has stronger ties to the global economy. Half of all silver is used in heavy industry and technology – including smartphones, automobiles, and solar panels. This makes silver more economically sensitive than gold, which is primarily used for jewelry and investment. When economies grow, silver demand typically increases.
Price Volatility: Silver shows significantly higher price volatility – two to three times greater than gold on a given day. While traders may benefit from these swings, such volatility creates challenges for managing portfolio risk.
Portfolio Diversification: Both metals can diversify a portfolio, but gold has historically been more effective. Gold maintains consistently low correlation to stocks and other major asset classes, partly because its limited industrial applications make it less vulnerable to economic downturns.
Accessibility: Silver’s lower price per ounce makes it more accessible to retail investors seeking physical precious metal assets.
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