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Is Silver the NEW Golden Investment?

by Chirag Sharma
Is Silver the NEW Golden Investment?

With instability in the economy and financial markets due to the coronavirus pandemic, there's been renewed interest in precious metals such as silver.

Like gold, silver has been on a steady upswing since March. Precious metals can function as the ultimate alternative investment, prospering when other investments become unstable and decline.

While talking about silver, I will occasionally tell you how silver got its name in history. Until the 1960s, the price of silver stayed below $1 per ounce. That was one of the basic reasons the U.S. government commonly minted silver coins.

  • 550 BC: First silver coins were minted in the eastern Mediterranean
  • 206 BC-220 AD: During the Han Dynasty, silver coin was included in the official currencies of China, but it was limited to use by the royal family only.
  • 775: The Saxon kingdoms issued silver coins known as "sterlings," 240 of them being minted out of one pound of silver, the weight of which was probably about equal to the later troy pound.
  • 1545: Discovery of Potosi, Bolivia and the Cerro Rico silver ore mine, which was deemed the world's greatest silver deposit. Production peaked in 1615.
  • 1792: Alexander Hamilton, then U.S. Treasury, proposed the adoption of a gold and silver-based monetary system.
  • Oct 15, 1794: The first official U.S. silver dollar was minted, in accordance to the Coinage Act of 1792.
  • 1875: The Resumption Act of 1875 that was enacted in 1878 established the U.S. as the de facto monometallic gold standard. This foreshadowed the increased demand for gold and decreased demand for silver as a monetary reserve in the world, thus leading to a dip in market prices.
  • 1900: The Gold Standard Act of 1900 officially renounced bimetallism, and pegged the U.S. currency to gold.
  • March 6, 1933: To curb mass panics and bank runs, President Roosevelt declared a four-day Bank Holiday to stop hoarding and export of gold and silver. The "Emergency Banking Act" passed on Day 3 shut down banks, which needed to be deemed "financially secure" to be reopened.
  • Jan 18, 1980: Silver hit an all-time high just below $50 an ounce, when gold prices also rose dramatically in response to the Soviet invasion of Afghanistan. Silver prices dipped to about $15 an ounce by the end of that year.
  • 2010: Spot silver rose to successive 30-year highs, and prices gained more than 80 percent, outperforming gold.
  • April 25, 2011: Spot silver rose to $48.84 an ounce and U.S. silver futures to $49.82, highest since 1980.

Humans have been investing in silver for decades, with the precious metal serving as a valuable alternative to traditional stock trading. Like gold, silver is a safe haven asset. During 2020, as more alternative investment options open up, many are wondering if silver is still a safe investment.

The State of Silver 2020

Silver hit an eleven-year low this year. However, in March 2020, the metal reached $11.74 an ounce.

Since then, it had recovered to some degree, even hitting a seven-year high of $30 an ounce this August. From there, the asset ranged from the low to high $20's, where it still remains as of this writing.

However, despite these uncertainties, experts believe the future of silver is a positive one.

Why to invest in silver

  1. Silver can provide safety - As talked about, buyers typically flock to treasured metals throughout occasions of turmoil. When political and financial uncertainty are rife, authorized tender usually takes a backseat to property like gold and silver. Whereas each gold and silver bullion may be interesting to buyers, the white metallic tends to get neglected in favor of people investing in gold, regardless that it performs the identical position.
  2. It's cheaper than gold - Between gold bullion and silver bullion, the white metallic shouldn't be solely inexpensive and subsequently extra accessible to purchase, but it surely's additionally extra versatile to spend. Meaning in case you are seeking to purchase silver within the type of a coin to make use of as foreign money, will probably be simpler to interrupt than a gold coin as a result of it's decrease in worth. Simply as a US$100 invoice could be a problem to interrupt on the retailer, divvying up an oz of gold bullion could be a problem. Consequently, silver bullion is extra sensible and versatile than bodily gold, making the sort of silver funding extra interesting.
  3. Silver is More Practical For Everyday Small Purchases - Silver isn't just cheaper to buy, but can be more practical when you need to sell. Maybe someday you don't want to sell a full ounce of gold to meet a small financial need. Enter silver. Since it frequently comes in smaller denominations than gold, you can sell only what you want or need at the time.
  4. Silver affords larger returns than gold - As a result of the white metallic is price round 1/79th the worth of gold, shopping for silver bullion is inexpensive and stands to see a a lot larger share acquire if the silver value goes up. In reality, previously, silver has outperformed the gold value in bull markets.

We can talk about more topics: Silver inventories are falling, Silver outperforms gold in bull markets, Industrial use is growing, Supply is about to fall, World demand is growing, The Gold/Silver ratio favors silver etc.

If you're thinking of investing in silver, here are some things to keep in mind:

  • Coins and bars are the traditional way to buy silver.
  • ETFs and stocks give investors a different way to own silver.
  • There are various exchanges online where you can buy silver in the form of coins or bullion. While you need to pay some additional fees for this, you can also have them professionally stored and held. Or, depending on the exchange, you can have the silver shipped to you. Otherwise, you can buy silver online utilizing cryptocurrency. There are various coins you can purchase that represent a stake in silver. This is the only way to buy fractional amounts of silver, saving you money if you can't afford too much.

Overall, it appears that silver is a reasonably safe investment to make in 2021. Despite cryptocurrencies barreling their way into the investment space, traditional assets like silver are holding their own. In fact, it looks like they'll perform quite well in the years to come.

It is recommended that you should have about 2-3% silver in addition to gold which should be about 8-10%; both as an investment portfolio diversifier.

However, prior to making any investment in precious metals, please consult an expert financial adviser.

Own some silver now.

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