Silver may be the running second to gold, but nobody can deny that it also has quite the potential. For one, it’s also an investment that investors hope will increase in value.
The market is volatile, with prices ranging from USD$18 to USD$26.50 from September 2021 until today. But it’s even difficult to say when the price will increase. This article will shed some light on whether you can find a bright future as a silver investor. Here are some things you need to know.
#1. Silver Is Becoming In-Demand For Industrial Use
Silver isn’t just a precious metal on its own because it continues to find its way into industrial purposes. It’s also used as a component that makes up half of why it’s in demand currently.
According to the Silver Institute, the demand for physical silver experienced a hike back in 2021 due to its applications as a component. Silver’s usage rose to 9%, equaling over 500 million ounces.
Among the trends influencing the rise of the need for silver is its use for photovoltaic panels, the 5g infrastructure, and as parts for consumer electronics. The surge is expected to be 5% in the current year.
In the United States and Europe, retail investments in silver bars and coins bought from sources similar to Gainesville Coins reached a new high since 2015, from 36% to 278.7 million ounces. Inflation issues influenced the purchase. According to the Silver Institute, investors bought silver at momentary low prices.
Precious metals tend to retain their market value due to the dipping purchasing power of regular currencies. That makes the investment demand for the current year possibly due to the global inflation rates spiking.
#2. Factors Influencing The Future Of Silver
It’s no secret that when there are uncertainties in the economic environment in the country, investors turn to purchase precious metals. These can serve as backup assets during inflation.
Besides that, supply and demand also impact the price of silver. However, CPM Group Managing Partner Jeffrey Christian believes that silver prices can rise during the current month and possibly become more robust later. It could be why those who see silver for the long term might see the volatility as an opportunity.
Christian still advises investors to have realistic expectations regarding the possible rise in silver market value. They won’t be seeing three-digit prices any time soon.
Others still believe that silver will be performing better than in 2008. Silver rose five times from the bottom because of either the recessionary or digressionary beginnings. Silver manipulation by specific players in the banking sector is also a factor.
These mentioned factors don’t affect the possibility that silver could reach almost USD$50. It’s plausible that silver prices could continue to rise this year and beyond.
#3. The Stock Market Is Rising
Economic tensions are subsiding, and the world stock market has risen in the last few years. The major countries around the world are also experiencing political stability. The economic area, however, is a different story because it moves in a loop.
Investors should prepare for future economic crises or geopolitical tensions associated with debt management. History will repeat itself when many investors will begin purchasing silver and gold once more. Both precious metals could also rise in market value.
That being said, silver’s volatility is due to various reasons. Investors who want to dabble in silver must keep track of future rates. If you observe, silver prices tend to rise when the stock market is declining.
#4. Positive Silver Value Predictions For 2023
Market watchers predict a spike in silver value, moving to USD$34.70 per ounce. It was also a price cap expected before the year ended. There are solid indicators for the prediction, such as the price of gold, the expectations for inflation, the value of the Euro, and the futures market positioning.
The rise of the U.S. dollar and a significant decrease in inflation expectations showed resistance in a secular breakout during the first quarter when silver broke into USD$27. But a turnaround during the third quarter showed a bullish market period when the silver futures report indicated an improvement.
Reports show positive signs of a more robust silver for next year. But as nothing is set in stone, reading more information from other reputable sources is still advisable. The information mentioned is only among many you need to know before investing in precious metals. Investing in silver is volatile, making it better for the long term. First-time investors must also measure their risk appetite because silver investments take knowledge and patience.