Many precious metals investors are now looking to silver as opposed to its yellow, much more expensive counterpart. So much, in fact, that some reports show more people investing in silver at a higher rate than gold. Is this the right move? As with any investment, it depends on your situation and your investment goals. But let’s take a look at some reasons why you should look into silver as your next physical precious metal purchase.
As of fall 2013, silver’s futures were outpacing gold’s, and demand from North America, Asia, and several industrial segments (medical and technology, to name a few) is rising. Also, U.S. debt issues, political tensions, and the constant fear of a stock market crash have more people turning towards precious metals, especially silver, due to its significantly lower price. You can invest in physical silver for about the same cost as two movie tickets.
Silver and gold often share the same trends, though silver’s movements are usually more extreme, because of its lower price (roughly $20 an ounce, compared to gold’s price of roughly $1,200 per ounce as of late 2013).
According to Bloomberg, Chinese physical silver investments are expected to grow by 10% in 2014. 33% of that demand is jewelry and coins, while the rest is used for solar panels, electric appliances, and photography devices. Keep in mind that many consumer products are produced in China, which is also the current second largest economy in the world. So a 10% increase has significant global effects for other silver investors.
Silver coin sales are also outpacing gold coin sales, according to the US Mint. For the past 6 years, the ratio of silver coins sold to gold coins sold has been roughly 48:1 (again, mostly because silver is so much more affordable). However, in July 2013, that number nearly doubled to 87:1, and in August, the ratio jumped exponentially to 315:1.
The reason? Many people believe silver is undervalued, and is essentially on sale with prices that have fallen below $20 an ounce in 2013. Others feel it is more trustworthy and reliable as an investment than gold, because it has so many other uses in industrial product manufacturing. Still others just like the fact that they can afford to buy silver without breaking the bank.
As a physical precious metals investor, you should give silver serious consideration for all of the reasons stated above. Gold has historically been the go-to choice for precious metal investors, but silver has made a compelling case for itself, and may one day become the new king of the precious metals world.