The general consensus among market watchers, researchers, and precious metals experts is that the long-term forecast for silver is positive. Although no asset is without downside risk, the case for silver is supported by heavy industrial use as well as its strategic importance as a currency hedge during times of uncertainty. However, the strength of the dollar will play an important role in silver’s performance.
Exposure to silver, coins, bars, or even stocks can be a great alternative to gold investment. Much like other precious metals, silver shares a few things in common with gold. It is relatively rare, expensive to mine, forged into fashion items with the immense appeal, and used in various different industries. However, similarities end when it comes to value and price. Silver is arguably now a much better investment than gold and is also much less ‘in-demand than gold. Indeed, one major upside to silver is that it does not get as much attention from investors when geopolitical events spark anxiety. That is to say: silver is not yet hoarded by investors nearly as much as gold.
“Fortunately, many experts are bullish about precious metals. Although the price of gold has risen roughly USD400 per ounce in the past year, some analysts suggest that silver may be the better buy in the medium- and long-term,” says Gallagher.
Why Silver Is A Better Investment Than Gold
The expectation is that buying shares in these ETFs will force investors to buy physical silver and drive prices higher. Silver like gold has strong fundamentals compared to other commodities and a stable outlook due to rising demand and limited supply.
Moreover, the potential for price appreciation toward the highs of the 1980s or 2010s is nearly 100%. By comparison, gold reached all-time highs last year.
Historically, this is a very high value. Just because something is cheap, like silver (compared to gold), doesn’t mean it can’t get even cheaper.
Nevertheless, this ratio should cool down in the medium term. So that silver is likely to make up for the valuation shortfall.
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You have already noticed that WallStreetBets investors (WSB) target stocks particularly, which have a considerable portion of the outstanding shares are sold short.
According to the stock market portal Seeking Alpha, a WSB post circulated on Twitter calling the silver market “one of the most manipulated in the world.”
Thus, there is a risk that the short sellers will have to buy back the stock when their individual loss threshold is reached to reinforce the previously deliberately forced rise.
How to Invest in Silver
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.
The Basics of Silver Investing
Silver is not a true investment since it does not generate a product or service. Silver has value in and of itself, as both a precious and an industrial metal. But it's otherwise inert. It doesn't produce anything, generate cash flow, or provide a steady income.
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