Silver has long languished in gold’s shadows, with the white metal playing second fiddle to gold. Gold is unique in its color, its density, and the physical properties that make it the ideal money. Silver tarnishes and has to be maintained, and its color and shine are often imitated and replicated by nickel, stainless steel, and other base metals. But for investors who understand precious metals markets, silver can’t be duplicated.
Silver’s ability to protect investor assets is on a level with that of gold. And while the silver price does see a bit more volatility than gold due to the greater industrial use of silver, that volatility can have some pretty great benefits on the upside. That’s exactly what investors are seeing today, as silver’s price has risen over 17% this year. That’s a great return so far, but there’s still a long way to go. Many analysts expect silver to break through the $20 barrier this year, and even that may be conservative.
Investor interest in silver is picking up significantly, especially as measured by exchange-traded funds (ETFs), which have been boosting their silver holdings significantly this summer. Everyone wants to get in on the rising tide of silver prices, which shows no signs of slowing down. With a trade war that is strengthening all the time, stock markets that are set to drop, and a slowing economy, expect that demand for silver to continue increasing in the future.
The real question is how long it will take silver to regain its previous highs. In the aftermath of the financial crisis silver traded for a long time between $25 and $30 per ounce. And in fact, while spot prices for silver have decreased since then, premiums on silver coins have increased, meaning that investors can still get the same prices for many of their coins today as when silver was 50% more expensive.
As a price target, $25-30 per ounce is well within reach, but many investors would love to see silver hit $50 an ounce again. That would be nearly triple its current price, which would be phenomenal growth and certainly far better than stocks and bonds will do over the next few years. And it’s not out of the question for silver to see that kind of price growth either. Just as investors who invested in gold during the financial crisis saw their portfolios protected and their assets gaining value, those who invest in silver today could see the same thing happen in the coming years.