3 Reasons to Own Silver Today
As geopolitical and economic uncertainty continues around the globe, more consumers have looked to physical precious metals to help protect and grow their wealth.
But while gold has been taking center stage in financial news, physical silver has also been experiencing significant growth—and it may be primed for its own historic run.
Here are three reasons you may want to consider taking a position in physical silver:
1) Silver is outperforming gold.
As of September 23, 2024, silver has thus far outperformed gold year-to-date. While gold has made a significant increase of around 27% since the start of the year, silver has climbed an even more remarkable 29%. In fact, if you look back over the last 10 years, you’ll see both silver and gold making similarly impressive gains.
Silver’s price growth has not gone unnoticed. On September 17, 2024, MarketWatch noted that silver “may be gearing up for a significant rally that lifts prices toward all-time highs.”
2) Industrial demand for silver is breaking records while supply is slowing down.
Though mostly known for its uses in jewelry and silverware, silver has numerous industrial and electronics applications thanks to its high level of conductivity. For example, every electrical connection in a modern car uses silver-coated contacts, and silver powder is used in the construction of solar cells. As an antibiotic, silver is also an important tool of the medical world and is frequently used in water purification.
According to the Silver Institute, silver demand grew more than 14% between 2015 and 2023, driven heavily by electrical and electronic demand and by photovoltaics (solar energy). Meanwhile, total silver supply has dropped by more than 4% in the same timeframe. This has led to an expanding supply deficit of more than 180 million ounces as of 2023, according to the Silver Institute—one that could contribute to significant price increases for silver over the long term.
3) Silver can add another important layer of diversification to your portfolio.
In addition to its increasing industrial demand, government and consumers alike are seeking out silver for many of the same reasons they are seeking out gold—both metals have served as time-tested hedges against volatility and uncertainty. This is how International Banker puts it:
“As is the case of its elder sibling, gold, China’s voracious appetite for precious metals, including silver, could result in a dramatic price appreciation for the shiny transition metal in the coming months.”
—International Banker, August 15, 2024
Why would China be so interested in both silver and gold? Because each metal is driven by unique factors in addition to those they share. In other words, adding both gold and silver to your asset mix can help add to your portfolio’s diversification, thereby decreasing your overall risk exposure and increasing your protection against adverse factors—like market and geopolitical volatility—that can send paper-based assets like stocks plummeting.
