Silver and Inflation

The global demand for silver has been on the rise offering silver investors opportunities for investors to buy silver Brisbane at prices that haven’t seen a lot of change in the last six months. 

Investors and economic analysts can argue that 2022 should be the year that silver outshines all the precious metals. As the world recovers and risks abate, we can all expect to see the demand for silver rise especially as the industrial sector picks up steam. 

According to the Silver Institute, the global demand for silver is set to rise to 8% or 1.112 billion ounces this year alone. The institute has stated that the positive outlook for silver demand is driven mostly by the rise in industrial manufacturing which includes electronic applications and solar energy technologies. Industrial demand account for half of the total demand for silver. The other half comes from the jewellery industry and investments. 

2021 could serve as a consolidating year that could provide a good entry point for investors looking for a long-term investor in silver. The price of silver did react to rising inflation but it seemed to be a transitory reaction. Silver has been stuck in a $5/oz. The trading range for silver has been stuck at $5/oz. since August. 

The factors that could cause silver to make a breakout over include inflation, rising demand, and monetary policies. The demand for more silver is expected as green industries keep evolving and growing. The Silver Institute predicts that the demand for silver to rise in 2022 by 10% to 290 million oz. Investors are already buying up a lot of silver but it isn’t just coming from industrial customers but other investors. For instance, the American Eagle silver 1.oz coins increased from 14.9 million in 2019 to 28.3 million in 2021. 

Another way to invest in silver is with Exchange-traded Funds (ETFs). These however are silver paper shares. A savvy investor will want to own physical silver and not invest in an intangible format like EFTs. The performance of silver ETFs and stocks might be convenient by their performance depends on a lot more than just the spot price.

With inflation rising high and persistently, more investors will move towards hedging their investments by including silver in their portfolios. 

The rising inflation in the US and around the world has forced investors to assess the effects on “risky” assets like stocks and bonds; and “safe” assets such as physical precious metals. Traditionally investors are often advised is to allocate their wealth according to the 60/40 rule. 60% of an investor’s portfolio should be in high and volatile stocks. 40% should go to low-return, lower-volatility precious metals. The reason for this is that stocks and bond prices are negatively correlated to the price of gold and silver (when one rises, the other drops). This mix offers a balanced portfolio.

This is the best time to buy silver Brisbane. During a “risky” period when inflation is a threat, precious metal prices will rise and stocks will fall. When the economy is doing well stock prices rise and the price of silver will fall and in a recession the reverse is true.

If you’ve ever worried about the stability of fiat currencies, you might have questioned whether silver is an appropriate alternative. It is. For one thing, unlike fiat currencies, silver like gold tends to hold its value. Using silver to save and liquidating it when you need cash for something means your money can go far. 

Regardless of what the future hold, silver will still be a valuable asset. No one knows – we have lived in a world where silver and gold were widely accepted currencies. It has happened before. 

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