When it comes to investing in safe avenues, you may consider investing in silver as it’s believed to offer a good return on one’s investment. The excellent news is that silver prices have risen above the US$20 per ounce mark recently for the first time in years. This is said to have pushed many individuals to seek opportunities in adding in silver withholdings to their individual American portfolios.
Investors like you may look into many companies that offer a variety of options in investing in silver. If you’re thinking about which platforms you should purchase your silver on, you can buy and trade silver with Gainesville Coins and other similar institutions.
Nevertheless, the essential thing you should be thinking about as a trader or investor is what the future holds for silver assets. Below are some of the ideas that can enlighten you about the future of silver in the investment market.
Silver Prices In The Future
In a five-year forecast, although other analysts project the silver price will remain below US$30 in 2021, most industry analysts foresee the silver price will rise higher.
Although officials from the World Bank have foreseen a less favorable view of silver’s standing in the trading market, most industry observers and experts predict that silver prices increasing even more.
A well-respected silver trading company head believes that white metal could climb even higher until it reaches the triple digits. In a recent interview, they said that silver is the lone trading commodity that hasn’t got its record high points yet. According to them, silver only has hit its highest prices yet on two separate occasions: the first occasion was back in the year 1980 and the second was in 2011.
They concluded that the market will see a high breach in the silver prices cycle, awakening the market. Additionally, they even suggested that precious metals such as silver could reach a price mark of US$1,000.
Trading Precious Metals
Two leading industry players indicate in the 2021 World Silver Survey that the silver market witnessed increased investment demand in 2020. Silver exchange-traded products (ETPs) investment grew by 298%, ending the year at 1.067 billion ounces. In addition, physical silver investment grew by 8% to end the year at 200.5 million ounces. According to the same report, physical demand would’ve been more robust if not for pandemic supply disruptions.
As reported by a leading Canadian bank’s market analysis, due to the transition to renewable energy, higher industrial demand from emerging sectors will be highly-priced supportive for the metal over the next few years. This means that silver’s close relationship with gold’s secure and valuable status will be beneficial in the long term.
Industry players privy to silver trading say that given their expectations for the inflation increase over the coming months. They also believe that financial authorities will strive to maintain a balance between hiking rates to manage inflation versus supporting economic growth. All in all, silver and gold prices are expected to continue to climb over the coming months with prices for silver foreseen to reach an amount of US$32 in 2022.
Factors Influencing Silver Market Prices
When you look at the trend of silver prices over the years, you could say that one of many factors that affect its cost is monetary dilution. Precious metals like silver and gold increase their value when the currency is debased. Further, fiscal and monetary stimulus play a key role in the prices of precious metals.
The monetary stimulus will usually go first to the banking system and will inflate asset prices. Fiscal stimuli are funds that are injected directly into the economy and will be spent immediately. To put it simply, it’s like the same case when someone gives you US$100 and you deposit it in a savings account versus spending it quickly on groceries.
In an ideal economic setting, tax revenue will increase as more entrepreneurs open up shop and create jobs to fuel economic growth. But the unfortunate reality is that national deficits and debts are so high. Based on the history of the United States (U.S.) economy, this shows that uncontrolled financial obligations usually lead to higher consumer prices or inflation. This then forces the federal government to create funds for stimulus programs. The government may need to borrow funds for such initiatives which means another increase in an already bloated deficit.
The basic rule is, the more you create something, the less valuable it becomes. Inflation along with more currency units for large spending plans will make the U.S.’ currency less valuable. Monetary stimulus alone is said to be currently 95 times greater compared to annual silver production. And for this reason, some key silver traders confidently predict that precious metals like silver will become more valuable over the next five years.
Although the price of silver made a significant gain in the past year before pulling back again, it’s becoming more apparent that silver is a great investment opportunity to achieve your financial goals for your future. The points above discuss the basic merits of adding metals to one’s portfolio such as silver assets.