• Home
  • |
  • Silver Has Been Stuck at Lower Prices. Is it Time to Buy? | MarketWatch

March 4, 2022

Silver Has Been Stuck at Lower Prices. Is it Time to Buy? | MarketWatch

Global demand for silver is on the rise and expected to reach a record this year, offering an opportunity for investors to buy the metal at prices that have seen little change in the past six months.

A “compelling argument can be made that 2022 will be a good year for silver,” says Edmund Moy, former director of the United States Mint and senior IRA strategist for gold and silver dealer U.S. Money Reserve. “As the global economy recovers from the pandemic, expect to see silver demand rise from the industrial sector.”

Total global silver demand is forecast to climb by 8% to a record high of 1.112 billion ounces this year, according to the Silver Institute.

Based in part on analysis from precious-metals research consultancy Metals Focus, the Silver Institute said that the “exceptionally promising” outlook for silver demand is driven by record silver industrial fabrication, which includes electrical and electronic applications, as well as green technologies.

The Silver Institute forecasts growth of 5% this year for global industrial silver demand to a new high of 552 million ounces.

Industrial demand is half of total demand for silver, and should be responsible for about half of the price movement, says Robert Minter, director of ETF investment strategy at asset manager abrdn. The other half of demand comes from jewelry and investment use, where drivers are similar to gold, he says.

“Because of the demand sources, silver can be thought of as half gold, half copper,” says Minter. “Yet when we compared returns since the end of 2020, copper is up 28%, gold is down 2%, and silver is down 12%.” That implies silver prices should be much higher, he says.

See also
Beginners Guide To a Gold IRA Investing

For silver just to catch up to half of copper’s performance, that would imply a silver price near $25.50 an ounce, says Minter. On Feb. 16, silver futures settled at $23.605.

Michael Cuggino, president and portfolio manager of the Permanent Portfolio Family of Funds, believes that 2021 served as a “basing and consolidating year” that provides a “good entry point for a long-term investor” in either silver or gold, both of which saw prices fall last year as inflation began to emerge but was “explained away as transitory.”

Still, silver futures have been generally stuck in a less than $5-an-ounce trading range since August.

Likely triggers for a breakout move this year include geopolitical and monetary concerns, inflation issues, and growth in silver demand, says Cuggino.

Demand is expected to come from both traditional and cyclical businesses, as well as from emerging green industries—providing a “strong long-term demand picture for industrial use,” he says.

The Silver Institute, meanwhile, also expects physical silver investment demand to rise by 10% in 2022 to 290 million ounces, according to Michael DiRienzo, executive director at the Institute.

Investors are already buying silver. Moy points out that sales of American Eagle silver one-ounce coins at the U.S. Mint climbed from a prepandemic level of 14.9 million in 2019 to 28.3 million last year.

Silver mining stocks and exchange-traded funds also have their place in a “savvy investor’s toolbox, but owning the physical metal gives the investor a tangible asset without having to factor in management,” he says.

If inflation remains “high and persistent, expect more investors to hedge their portfolios with some silver,” Moy says, and those looking to mining stocks, ETFs, or owning the physical metal will have to decide what works best in their portfolio.

See also
Biden's Proposed $6 Trillion Budget Could Bode Well for Gold and Silver

“Stocks and ETFs are convenient, but their performance is dependent on more than just spot prices,” and when it comes to ownership of the physical metal, storage and portability are key concerns, he says.

https://www.marketwatch.com/articles/silver-has-been-stuck-at-lower-prices-it-may-be-time-to-buy-51645090200?reflink=share_barrons_twitter

Would you like your investment portfolio to meet the gold standard?

Gold Investment Review works with an extensive network of Gold IRA partners. Complete our simple investment questionnaire, and we’ll match you with the right partner to help you grow your portfolio.

Highest Customer Ratings For Gold IRA Companies

 AVG. 

Rating

4.9

Over 550+ total reviews

  • Highest overall average customer reviews
  • Largest investor resource team
  • The most trusted gold IRA company in the United States

 AVG. 

Rating

4.8

Over 340+ total reviews

Related Posts

Causes & Effects of Stagflation | What To Do When It Reaches Financial Markets

Causes & Effects of Stagflation | What To Do When It Reaches Financial Markets

‘Unretirements’ Continue to Rise as More Workers Return to Work

‘Unretirements’ Continue to Rise as More Workers Return to Work

Royal Mint Bullion Review | Product Offerings

Royal Mint Bullion Review | Product Offerings

Fed Will Hike Rates Six More Times Before The End of 2022

Fed Will Hike Rates Six More Times Before The End of 2022
Photo is a selfie of Nathan Rosevear

Nathan Rosevear

Nathan offers insights and reviews around the highest rated precious metal IRA specialists. He is an investor in gold and silver industry.
His passion is helping Americans secure their finances through stable investing and provides such help by blogging valuable information for investors to make sound financial decisions.
Do you want some help figuring out your precious metals Investment? Feel free to give me a call at 604 603 7953.
Let me connect you with the best in the business based on your financial situation and help you save some time and maybe save you some hard earned money.
Nathan Rosevear is not a financial advisor. No financial advise will be given on phone calls. Investors are urged to seek professional advice when necessary.
Gold Investment review is paid to recommend some of the services listed on this website by referring you to the right companies. No additional cost is attributed to the investor.

Get in touch