Gold vs silver: which is better?

Price and the gold/silver ratio

Gold is many times more expensive than silver by weight. The gold/silver ratio — how many ounces of silver buy one ounce of gold — has ranged between roughly 40 and 120 over the past fifty years and has often sat between 70 and 90. When the ratio is high, silver is cheap relative to gold; when it is low, gold is cheap relative to silver. Some investors switch between the two based on the ratio, but there is no guarantee it returns to any particular level.

Our live price page shows today's spot price for both metals per gram and per ounce, so you can calculate the current ratio yourself.

Volatility

Silver is typically one and a half to two times as volatile as gold. About half of silver demand comes from industry — solar panels, electronics, brazing alloys, medical uses — so it reacts to the economic cycle as well as to investor sentiment. In a strong precious-metals rally silver often rises faster than gold; in a downturn it usually falls harder. Gold's demand is dominated by investors, central banks and jewellery, which makes it steadier.

Tax and VAT

In the EU and UK, investment gold — bars and coins of at least 99.5% purity for bars and 90% for coins that meet set criteria — is exempt from VAT. Silver bullion is not, so buyers pay standard VAT (for example 20% in the UK, 19% in Germany) on new silver bars and coins, unless they are bought under special margin schemes or stored in a bonded vault. That VAT is not recovered when you sell, so silver has to rise significantly before you break even.

In the UK, gold and silver coins that are legal tender, such as Britannias and sovereigns, are exempt from Capital Gains Tax. Other gold and silver investments may be taxable above the annual allowance. Rules differ between countries, so check locally.

Storage and handling

Because gold is so valuable per gram, a large sum fits into a small space: €100,000 of gold weighs under a kilogram and fits in your hand. The same value in silver would weigh around 80–100 kg. That makes silver more expensive to store, insure and transport, and harder to sell quickly in large amounts.

Selling scrap: gold vs silver

Scrap silver is much less valuable than people expect. A typical sterling silver cutlery set of 1 kg contains about 925 g of pure silver; at today's prices that is a modest sum, and because silver is cheap per gram, buyers' fixed costs take a bigger share. Payouts of 60–80% of melt value are common. Check today's figure with the sterling silver 925 price per gram calculator.

Scrap gold, by contrast, is valuable even in small amounts: a single 18 carat ring can be worth more than a whole canteen of silver cutlery. Specialist gold buyers often pay 80–90% of melt. See how much scrap gold is worth.

Be careful with plated items in both metals. EPNS, A1 and 'silver plate' marks mean nickel silver under a thin silver layer; GP, RGP and GF mean plated or filled gold. Our hallmark guide lists the marks.

Which should you choose?

For long-term saving, wealth preservation or a simple hedge, gold is usually the better choice: lower volatility, no VAT on investment products, and cheap storage. Silver suits people who want a smaller entry price, accept larger swings, and are comfortable holding for a long time to overcome VAT and wider dealer spreads.

Many investors hold both, with most of the value in gold and a smaller allocation to silver. Whatever you choose, buy from reputable dealers, compare the premium over spot price, and keep receipts.

Platinum and palladium

Platinum and palladium are the other two traded precious metals. Both are dominated by industrial demand, especially catalytic converters, and have had extreme price swings. Platinum jewellery, usually 950 fine, can be valued with the platinum 950 price per gram calculator. For most savers they are a niche addition rather than an alternative to gold.

A quick comparison

Summarising the main differences:

• Price per gram: gold many times higher than silver.
• Volatility: silver roughly 1.5–2× gold.
• VAT on bullion (EU/UK): gold exempt, silver usually taxed.
• Storage: gold compact; silver bulky and heavy.
• Scrap payouts: gold typically 80–90% at specialists; silver 60–80%.
• Industrial demand: about half of silver demand; small for gold.

Premiums and dealer spreads

When you buy bullion you pay a premium over the spot price, and when you sell, the dealer pays slightly below spot. For popular one-ounce gold coins and larger gold bars the total spread is often only a few percent. For silver, premiums are proportionally much higher — frequently 15–30% over spot for coins once VAT is included — because handling and minting costs are similar per coin while the metal is worth far less.

That is a key reason why gold tends to be more efficient for saving: less of your money goes to costs on the way in and on the way out. Compare the price you pay with today's spot price on our live price page before buying either metal.