The rise in the price of gold has received most of the market’s attention in recent days. Still, silver could outperform the metal in the long term. Fundamental factors make the metal the most attractive asset and investment to own against gold. However, that doesn’t mean that precious metal investors shouldn’t own gold. Investors must hold both precious metals, but silver will provide better returns than gold in the future, some analysts say.
According to precious metal analysts, central banks will have to strengthen their currencies with gold and go back to the “Gold Standard”. The idea is that gold will be reset at a much higher price.
Analysts estimate that there are around 2.4 billion ounces of gold and 2.45 billion ounces of silver in public and private vaults. There is also likely to be a large amount of physical gold and silver held by investors in their homes or in secret vaults that are not included in those figures. But, this still would not change the values of these metals too much.
Silver is invaluable in industrial and medical use
Silver has many traditional industrial uses. Historically, it was a crucial component in photographic and filming cameras. However, the rise of digital cameras has practically outdated the roll of the film. The development of cell phones and other technologies has helped fill the gap.
Silver is in virtually every appliance in the world due to its low resistivity. In photovoltaics, the method by which solar radiation converts into electrical energy, silver is useful for both semiconductors and solar panels.
Silver is increasingly in use in the medical profession as it has antibacterial properties. Other new applications for silver include its use in wood preservatives, water purification, and food hygiene. Everyday items such as refrigerators, cell phones, computers, washers, vacuums, keyboards, countertops, and even clothing contain varying amounts of silver.
Gold, on the other hand, has limited industrial uses. The jewelry sector, particularly in countries like India, represents more than two-thirds of the annual demand for gold. Dental and medical applications account for about 12% of the market. But if the price of gold continues to rise, at what point will demand decrease?
Investing in Silver
At some point, people stop buying luxury items. However, products like consumer electronics and solar technology still seem to have a significant advantage. This is because they use silver, a still quite reasonably priced metal.
Because of it being more affordable, silver is an ideal choice for people looking to buy ornaments and invest in bullion and coins.
Market experts and economists always recommend investing in a low-risk, low-value asset like silver. This is because neither will your money be blocked nor the value of silver will be depreciated.
Investing in gold for the past seven years has been a successful idea. The same goes for silver, although it is still not as popular with significant investors as the yellow metal. The extreme volatility of world markets has contributed to a higher level of fear in the investment world than in previous years. Holding gold and silver can be a valuable hedge against economic instability and balance an investment portfolio, especially in terms of dollar risk.