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How to invest in gold and silver

There are multiple ways to invest in gold and silver. Getty Images

With inflation and a possible recession on the horizon, you may be looking to shore up your finances or adjust your investment strategy to better safeguard your wealth. One option during times like this is a precious metal investment — or, more specifically, gold or silver.

But how exactly do you start investing in these metals, and when would you want to choose one over the other? That's what we will discuss below.

Start by requesting a free investors kit to learn more about this unique opportunity.

How to invest in gold

There are many ways to invest in gold depending on your budget, appetite for risk and the level of involvement you want to have in your investments. The six main gold investing methods include:

  • Gold IRAs: These are types of retirement accounts that allow you to purchase physical gold (though you must use an IRS-approved account custodian, choose specific types of coins and bars and store the gold at an approved depository. 
  • Physical gold bullion: This involves buying raw gold in coins or bars. Just make sure you have somewhere to safely store the gold if you go this route.
  • Gold futures: Buying futures lets you bet on or against gold's future performance. To do this, you'll need to go through a brokerage.
  • Gold ETFs: There are some ETFs — or exchange-traded funds — that hold either gold or gold-related assets, like mining companies, for example. As with stocks, you buy shares of ETFs, allowing you to customize just how much exposure you want to the category.
  • Gold stocks: You can also purchase individual stocks in gold-related companies that mine or process the precious metal.
  • Jewelry: Gold jewelry is another option. This can be particularly appealing to those who want to pass their investments down to heirs.

You may also choose to invest in gold using more than one strategy. This can help diversify your portfolio. Find out which gold option is best for you with a free investment guide

How to invest in silver

You can invest in silver using the same methods you can in gold. That means futures, physical gold, silver-related stocks and more. Here's a full list of your options for silver investing:

  • Silver IRAs
  • Physical silver coins and bars
  • Silver futures
  • Silver ETFs
  • Stocks in silver-related companies
  • Silver jewelry

Silver IRAs are often just called precious metals IRAs, but they have the same rules as gold IRAs do: You need to use an IRS-approved company to open and manage the account, you can only purchase approved types of silver coins and bars, and you have to store it in one of a few approved facilities.

When it's better to invest in gold

While both gold and silver can be smart investments, gold tends to be a good one when inflation is high, as it holds its value more steadily. It's also a good choice when nearing a recession.

"Gold is perceived as a safe haven during recessionary times, during wars, and during times of uncertainty," says Sankar Sharma, an investing educator and CEO of Risk Reward Return. "Even countries keep gold reserves in vaults, as it has a store of value."

Finally, you also might invest in gold if you need liquidity. Thanks to its scarcity and value, gold can typically be sold quickly and for most, if not all, of its original value (or more). 

Learn more about investing in gold now.

When it's better to invest in silver

Silver, on the other hand, is better if you need short-term returns. 

"Silver can be a better choice for those looking for potentially higher returns, as it has more industrial applications and can experience higher price swings," says Andrew Latham, a certified financial planner.

If you don't have much money to invest, you also may consider silver, as it's typically much cheaper per ounce than gold. 

The importance of diversification

Having a diversified portfolio is important, especially in an uncertain economic climate. When you diversify, you ensure you're not overexposed in one asset class, which would mean big losses should that class nosedive.

For this reason, Sharma says, "There are no drawbacks to adding some gold and silver to your portfolio" — as long as it accounts for 10% or less of your investments.

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