1 U.S. Dollar = 0.89 Swiss Francs






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Gold vs. Other Investments

Gold vs. Silver

Although gold and silver are often cast as similar commodities, one of the only commonalities between the two is their status as precious metals.

Gold attracts investors who are concerned about the state of the global economy; silver derives its appeal from its myriad of industrial applications. In other words, gold is strongest when the economy is weak and people are looking for value retention in their investments. Silver is strongest when the economy is flourishing and industrial demand (from which silver derives most of its value) is high.

During bear markets (periods of economic decline), gold tends to be in greater demand than silver. During bull markets (periods of economic growth), investors covet silver more than gold.

Because the price of silver is pegged to industry demand, silver’s price fluctuates more than the price of gold. Over the last year, the price of silver darted up and down like a seismograph needle. Each period of rapid gain was met and neutralized by a counteracting period of decline.

Beyond appealing to investors for different reasons, gold and silver are difficult to compare with one another because the price of gold is much higher than the price of silver. One aspect that can be compared is the percentage mark-up that investors must pay when purchasing gold or silver. Because silver is so much cheaper than gold, dealers must charge a higher percentage mark-up to turn a profit, eating away at any capital gains you may otherwise make.

More information on the relative advantages and disadvantages of gold and silver can be found on our Gold vs. Silver page.

Gold vs. Platinum

As scarce a resource as gold is, platinum is even scarcer. The annual supply of platinum is just 130 tons, or roughly six percent of the yearly production of gold. Despite its rarity, platinum is viewed more as an industrial metal than as a store of value.

Like silver, the price of platinum is directly correlated to market growth. But unlike silver, its primary industrial application is in vehicles. Because of the volatility of the automobile industry, investing in platinum can be a risky proposition. When the U.S. auto industry nearly crashed in 2008, the price of platinum dropped from more than 2,300 USD per ounce in March to 800 USD per ounce by the end of the year.

Gold vs. Fiat Currencies

“At the end fiat money returns to its inner value–zero.” -- Voltaire

Historically, every fiat currency (money that derives its value from a government) has eventually lost all of its value.

One of the most important aspects of any commodity, from gold to paper money, is how well it stores its value. And although fiat currencies hold their value well over short periods of time, inflation is guaranteed to erode their value over time.

After the United States abandoned the gold standard in 1971, the U.S. dollar (USD) was no longer backed by gold. Instead, it was backed by the “full faith and credit” of the government. Forty years later, the USD has only a fraction of its former purchasing power.

The solution of governments in times of economic duress has always been to print more money. Yet all this influx accomplishes is further erosion of a currency’s purchasing power. Unlike paper money, there is a finite amount of gold. It cannot be printed at will, and therefore cannot have its value artificially eroded.

For these reasons, gold is far superior to paper currencies as a store of value.