Why Silver Is Going Up & Can Save You in 2019
The precious metal silver has risen in price to over $19 at one point this year in a short amount of time. Some investors are missing out on these quick silver price increases for silver and other precious metals.
Don't forget, silver is also a reliable long-term investment for those looking to diversify their investment portfolio for years to come. In our yearly analysis, we will go over whether silver will go up or down in the future.
With gold reaching over $1,500.00 USD, the silver price tends to follow along at a similar rate. Silver has been priced at over $15 with some recent significant increases in the silver price on Wall Street. The price of silver peaked this year at $19.08 on Wednesday, September 4th, 2019, shown here.
If you are unsure with the current state of the silver marketplace, here are some key factors to help you better understand whether silver is a reliable investment — factors, including silver demand, market uncertainty, and recent political events we have analyzed.
Table of Contents
- Why Silver is Going Up
- Silver's Demand
- Silver's Relationship With Gold, Platinum, and Palladium
- Silver Hedge Against Inflation
- The Price of Silver in the Past Five Years
- Adding Silver to Your Market Portfolio
Why Is the Price of Silver Going Up?
The silver price continues to go up on the financial markets due to all this recent political uncertainty around the world including the Federal Reserve Central Banks and the change in interest rates (Possible bull market due to trade war with China). The past few years have been quite explosive with the political and economic events occurring between the United States and China and their trade war. The United Kingdom has also been facing the upcoming Brexit date of October 31st and the Conservative Party's closure of parliament.
All of these political events create uncertainty and significantly affect the trading markets and their supply and demand. The risk causes people to choose precious metals investing and other long-term strategies as increaes on the silver prices can be intriguing. This inevitably has an impact on the silver price forecast and on industrial silver demand.
Top Reasons Why the Price of Silver Increases
- The demand for the precious metal
- Silver's relationship with gold, platinum, and palladium
- Silver as an inflation hedge
- Accessibility of the metal
- The convenience of being able to purchase small amounts such as ounce coins (See here.)
Silver's Demand in a Financial Crisis
Silver has been increasing in demand considerably in the past years (including the industrial demand and jewelry demand. The silver bar demand has climbed 20 percent. India has been the leading in silver consumption since 2017 compared to others since the financial crisis.
Silver's Relationship With Gold, Platinum, and Palladium Metals
When looking at the price charts for precious metals such as silver, you will notice that base metals, for the most part, follow the same trends (This is a little different when it comes to the stock market crash where gold (known as the white metal) is secure against a U.S. Dollar Bubble popping). If you view the latest price charts for gold and silver, you will see that they both have a strong relation in their prices (Called the gold-silver ratio) and are worth the cash costs and pay for themselves in their store of value. With the gold price going up, silver will end up tagging along in the markets based on the historical markets.
Silver Hedge Against Inflation: Your Portfolio Insurance of Choice
A diverse portfolio is a smart investment decision. Silver plays a part in this diversification by acting as a hedge against the inflation rates each year. By placing a percentage such as 5% into silver, you can have the metal as a form of insurance on your portfolio. Below you can see the latest inflation rates in the United States.
"The current silver to gold ratio of 80 to 1 is absolutely unsustainable in a world where physical silver is being mined globally at a rate of 10 ounces of silver for every ONE ounce of gold." - CEO, First Majestic Silver
A crucial final driver for silvers resiliency during economic hard times is the fact that it is accessible. Unlike gold which can be quite expensive, silver is much cheaper. You can watch Peter Schiff talk about the "powerful case of silver" featured here.
As a result, more people would want to flock into silver bullion for the silver ratio. This can result in a percentage basis, a higher rate of appreciation than with gold. Since gold is more inaccessible due to its price, it is easier to ride percentage price volatility with silver.
In other words, you get more bang for your investment buck with silver because it's more accessible compared to gold. The downside to investing in silver coins and silver in general is that it's so affordable that if the silver price spikes up too high on the stock market, people might flood the market with their silver spoons, silver jewelry and industrial silver. We discuss more about the upside and downsides to both gold and silver in our other analysis on the topic.
An example of this type of price spike is what happened in the 80s (Also known as Silver Thursday) when speculators attempted to corner the silver market.
The Price of Silver in the Past Five Years
Below are the most recent prices for silver bullion over the past five years from September 2014 to September 2019.
Silver's Value in the Future
So, with these research points considered, will silver go up?
Adding Silver to Your Market Portfolio
If you haven't already, consider adding silver to your investment portfolio, whether that be the best silver coins, bars, or a silver IRA. Diversifying in other items instead of stocks can help protect your assets during the uncertain market ahead. The best types of silver to buy are investment-grade silver from reliable dealers.
Options when purchasing silver:
- Silver Coins (American Eagle, Canadian Maple Leaf, Australian Koala)
- Silver Bars (10oz, 100oz)
- Silver Rollover for Retirement (Either by your IRA, 401(k), TSP, SIPP, or RRSP)
Even a small percentage of your investments going toward precious metals can be a small nest egg for the decades to come. Learn more about doing business with one of the top-rated metal custodians before the silver price spikes again.