In a perfect world, you'd know with 100 percent certainty that your financial portfolio would carry your family through thick and thin, boom or bust, growth or recession. Unfortunately, such a world does not exist. A surprising election outcome has sparked cultural turmoil and a somewhat uncertain economic outlook. During such times of transition, being able to protect your wealth can feel increasingly important. Silver, while often overshadowed by gold, could prove to be a means of protecting and growing your wealth in 2017. Read on to see why diversifying your portfolio with silver may prove beneficial in the coming year, plus two key reasons silver prices could move higher.
Factor #1: Trump's economic infrastructure plans may shine spotlight on silver
Though many may not realize it, silver has dual properties as both an industrial metal and a precious metal. Silver is heavily used in electrical power switches, machinery control panels, batteries, radiography, small electronics, and especially photovoltaics (solar energy). Prices for industrial metals move along with signs of rising or falling economic growth, notes CNBC, and while copper is currently winning as the top industrial metal, silver is poised to follow should Trump's infrastructure plans take off.
As noted on Trump's website, “Americans deserve a reliable and efficient transportation network and a Trump Administration seeks to invest $550 billion to ensure we can export our goods and move our people faster and safer.” An increased focus and emphasis on building the nation's infrastructure is good for silver, as its uses span almost every sector of industrial application. Plus, if Trump passes the corporate tax cuts he touted along the campaign trail, he could also stimulate the manufacturing industry by boosting the need for silver in technology and high-value products like automobiles, televisions, and heavy machinery.
Industrial demand is expected to increase outside of the U.S. as well. Silver demand from the photovoltaics industry, primarily solar panels, is forecast to increase by 11 percent to a record high of 83.3 million ounces, an increase that's primarily driven by solar installations in China, report analysts at Thomson Reuters Silver Institute.
Daryl Guppy, CEO of Guppytraders, has been watching industrial metals in the wake of Trump's election and infrastructure plans. In a commentary piece to CNBC, Guppy argues that “from a charting perspective, silver is the way to go for better returns.” According to Guppy, “if silver can break through $18.75 per ounce it can then move towards a longer upside target of $26.00,” offering silver holders a “potential gain of more than 36 percent from current levels.”
Factor #2: Silver supply deficits are a serious reality for 2017
The silver market is expected to see a physical deficit of 52.2 million ounces by the end of the year, making 2016 the fourth consecutive year in which the precious metal has experienced a physical shortfall, reports Thomson Reuters via Engineering News. While this deficit doesn't tend to have an immediate impact on silver prices in the near term, notes Engineering News, “multiple years of yearly deficits can begin to apply upward pressure to prices in subsequent periods.”
Analysts at Thomson Reuters forecast silver prices to average $17.15 an ounce for 2016, a 9.4 percent increase over the 2015 average. Trump's plans for infrastructure growth coupled with an ongoing silver supply deficit could mean the precious metal has nowhere to go but up come 2017. Call 1-844-307-1589 for live pricing and our complete inventory selection of one of the world's most popular and awe-inspiring silver coins, the 1 oz. Silver American Eagle Coin.
Overall, “silver is much more dependent on supply-and-demand factors,” says Maxwell Gold, director of strategy at ETF Securities. “We see constructive fundamentals for silver going forward both by continued expansion of global industrial activity and reduced mine activity.” And as the law of demand implies, the quantity of a good demanded falls as the price rises, and vice versa.
“We see more potential for silver [than gold] given its high correlation to the industrial-production cycle, which [will] be driven by the continued recovery in the global economy,” adds Gold. His securities firm estimates silver prices trading between $22 and $24 an ounce in 2017, which would be, at minimum, a 24 percent gain for silver.
Choosing the right type of silver, at the right time
The question is no longer if you should buy silver, but how to buy silver and which type to buy. Should Trump's plans to upgrade and expand the nation's fraying airports, highways, bridges, ports, and waterways come to fruition, silver could face increased demand from both the industrial and precious metal sector. Private silver buyers may find it more difficult to purchase silver coins and bars at a price they're comfortable with, especially if the silver supply continues to face constraints.
In the end, the type of silver that's right for you depends on your personal financial goals. Are you interested in fast, high-volume diversification? Silver bars may be best for you. Or are you more comfortable with a type of silver that offers some insulation from quick changes in spot market prices? If so, certified silver coins could be the right option for you. Explore your silver coin and bar options online and call 1-844-307-1589 to learn more and lock in your price over the phone. Friendly and knowledgeable Account Executives are standing by to answer your call and are ready to discuss how silver can be used to increase your portfolio diversification, hedge against innumerable economic risks, and limit your family's exposure to potential market declines.
