Ultimate Silver Investment Guide “In a world where stability is highly valued, one precious metal stands out as a symbol of optimism:Silver.”

Many experts recommend investing in precious metals, with silver being one of the promising investment options. But you may wonder- ‘why silver investment is essential’, ‘what makes it so special?’ So here we are to provide you with the ultimate reason why you should choose silver investment by exploring its historical performance throughout the years during the economic crisis. Another reason silver is a popular choice for investors due to its high industrial demand, affordability, high liquidity, and potential for growth.

    What History Tells Us about Silver Performance

Silver, a precious metal cherished for centuries, has always been a reliable store of value. Its limited supply and enduring worth have made it a go-to asset, especially during economic instability. In the mid-nineteenth century, the United States witnessed a remarkable silver rush from 1859 to 1893, igniting local economies and transforming communities. This pivotal moment marked a significant chapter in American history.

Over the years, silver has demonstrated its ability to preserve wealth during inflation. Investors often flock to silver as a safe haven asset during economic uncertainty and rising inflation.

If you want to learn more about silver spot prices and stay updated on current prices, visit BOLD’s ‘ Silver Spot Price’ page before making any investment decision.

With the help of the above chart, you just learned that the price of silver has increased over the last two decades. However, you may be wondering what caused this increase. Several past events, listed below, have contributed to the rise in silver prices.

    Events in the Past Half-Century Made Precious Metals Prices Go Up.

1. 1970s Oil Crisis:

The oil crisis of the 1970s destroyed the world economy. It contributed to a stock market meltdown, skyrocketing inflation, and widespread unemployment, eventually resulting in the overthrow of the UK government. During this challenging time, people started moving toward safe-haven assets.

To give you an idea of just how much the price of silver rose during this tumultuous time, consider this: Before the crisis in 1967, silver was trading at around $12 per ounce. When the crisis peaked in 1973, the price had risen to $14.82, representing a hefty 23.5% increase. And when the crisis finally ended, the price of silver skyrocketed to $30.51 in 1979.

So, what does all of this mean for investors? It suggests that purchasing silver during normal economic conditions could allow you to buy at lower prices and potentially benefit from its higher value during financial hardships. Today's lower silver price could be tomorrow's savior!

2. Hunt Brothers' Attempt to Corner the Silver Market (1979-1980):

In 1979, the Hunt brothers tried to corner the silver market, and they owned one-third of the world's privately held silver supply. This led to a speculative bubble and a price increase. When the Federal Reserve raised interest rates, the brothers couldn't meet their margin calls, and the price of silver collapsed. This event led to changes in regulations and higher margin requirements for trading silver futures, highlighting the importance of futures markets for risk management and price discovery. The introduction of silver futures trading has been crucial in promoting investment, controlling price risk, and providing a stable and liquid market.

3. Economic Recession (1990-1991):

A global economic recession in the early 1990s affected many people. The US was characterized by a sharp drop in GDP, high jobless rates, and severe banking and financial crises. Silver prices fell slightly during the early recession. Still, they gradually increased from an average price of $4.83 in 1990 to an average price of $5.22 in 1999 due to the high demand for silver across several industrial sectors.

This was a mild recession and did not affect the prices of silver to a large extent, as there are many other broader global factors that show a greater impact on silver prices.

4. Global Financial Crisis (2007-2008):

The 2007–2008 Global Financial Crisis, or Global Economic Crisis (GEC), was one of the most severe worldwide economic crises. Before the start of the financial crisis, the price of silver was around $10- $15, but during the time of crisis, it increased from $20.70 per ounce in January 2007 to $28.99 per ounce at the end of February 2008. In 2011, silver prices reached an all-time high, three years after the 2007–2008 financial crisis.

In 2023, Forbes reports that silver prices have increased by around 400% in the three years after the Great Recession. This states that whenever any financial crisis occurs, people tend to move toward safe assets like physical silver bullion .

5. COVID-19 Pandemic (2020):

The COVID-19 pandemic not only caused a global health crisis but also had a significant impact on the economy. The uncertainty led to a surge in silver prices as investors pursued a safe haven for their money. Before the pandemic, the silver spot price was around $19. During the crisis, the silver spot price increased to $21 and peaked at $29.77 when the lockdown lifted in the USA in August 2020. According to the WHO, the COVID-19 pandemic ended on May 5th, 2023. At that time, the spot price of silver was around $24, much higher than before the crisis. It just shows how much of an impact a global crisis can have on the economy!

These are past economic crisis events during which silver has outperformed as a hedge against inflation and a safe asset. Given current circumstances, this leads us to our ultimate question: Is silver a good investment in 2024?

    Role of Gold Silver Ratio in Silver Investment

The ratio of gold and silver prices, known as the gold/silver ratio (GSR), is calculated simply by dividing the current price of an ounce of gold by the current price of an ounce of silver. For instance, if the price of gold is $2,000 per ounce and the price of silver is $50 per ounce, then the gold-silver ratio is 40 to 1. It is a widely used indicator among precious metals investors worldwide, showing how many multiples gold is trading relative to the price of silver.

During the 1930s Great Depression, the silver market was characterized by low demand and high inventories. The onset of World War II caused the price of gold to soar, leading to the ratio of gold and silver prices reaching nearly 100:1 at its peak.

After 1945, there was a shortage of silver due to the ensuing economic boom and rising industrial consumption, which sharply increased the price of the metal. As a result, the metric returned to normal and dropped to a low of 17:1.

Prices for silver increased in the 1970s due to a spike in demand for this precious metal. During this period, the 'Hunt speculation' also exerted a significant influence on prices. Furthermore, this indicator's value varied over the years 1900–2012, from as little as 15:1 to as much as 100:1.

Currently, in the industrial sector, silver is used in a wide range of applications, including electronics, photography, and solar cell manufacturing. The demand for silver is predicted to increase further as the world economy grows, especially in emerging markets.

But unlike gold, silver is still undervalued despite its strong demand and clear industrial significance. Many experts believe that this low rating is misplaced. They believe that due to silver's significant role in the industrial sector, its value may increase dramatically in the medium term.

    Reasons that will help you decide is silver a good investment in 2024

1. Safe Haven

One precious metal that can hold its value well in uncertain times is silver. Frequently regarded as a secure investment, it can help distribute risk and lessen the effects of market fluctuations. Generally speaking, there is little correlation between silver and other asset classes like stocks and bonds.

The historical events mentioned above should have clarified that silver is regarded as a safe haven asset, as evidenced by the fact that people turned to silver investments during the financial crisis.“Global silver demand is forecast to reach 1.2 billion ounces in 2024, which would mark the second-highest level on record,” the Silver Institute said in a recent report.Electronics, solar panels, jewelry, and cars contain silver.

2. Liquidity

Liquidity is the ease and speed with which an item can be sold without significantly changing its price. It supports your ability to maintain financial stability even during a significant market decline or unplanned life disruption. Silver is considered to be an extremely liquid asset. This indicates that there are many reliable precious metal buyers and sellers, which could be advantageous, particularly in using silver to diversify an investment portfolio.

3. Silver as a Legal Tender

Eleven states in the United States recognize gold and silver coins as legal tender, and additional states are either in the process or have attempted to reintroduce these precious metals as money. In states where gold and silver coins as legal tender, capital gains taxes on metals sales would be removed by the state laws announcing the shift in currency from gold to silver.

4. Silver Performs in All Economies

The way that silver performs under various economic circumstances is fascinating and complex. Silver has proven exceptionally resilient throughout history, frequently flourishing during recessions, economic downturns, and times of high inflation.

For investors contemplating silver, knowing the various factors influencing its price fluctuations—from industrial demand and supply limits to investment trends and global economic indicators—can be informative. Silver's numerous uses and past performance trends demonstrate its potential as a flexible element of an investment portfolio, regardless of the state of the economy.

5. More Affordable than Gold

Scarcity is the primary response to the query, "Why is silver more affordable than gold?" Since gold is far rarer than silver, most of the price difference between the two metals can be attributed to this mismatch in supply and demand.

    Uses of Silver in Different Sectors

Precious metals like silver have been prized for ages. Silver has the highest reflectivity and electrical and thermal conductivity of all the metals. It is utilized in many contexts, including currency or investment in coins and bars, solar panels, water filtration systems, medical equipment, photographic and X-ray film, and jewelry.

This chart shows the demand for silver in different sectors, measured in million ounces. The major sectors driving the demand for silver include electrical and electronics, investment in bars and coins, and the jewelry industry.

    Estimated Silver Demand in 2024

Supply for silver is influenced by the fact that it is both a precious metal and used in industrial and consumer applications. Demand for silver is driven by mine supply, industrial demand, green technology demand, and investment applications.

The Silver Institute's report predicts that the global demand for silver will reach 1.2 billion ounces in 2024, making it the second-highest level ever recorded.

This growth is driven by the continued strength of industrial end-users and a recovery in the demand for jewelry and silverware.

    As per Fxempire's 2024 Silver Market Forecast :“Economic Environment Supports Price Rise to $34.43”.

Here are some insights from Fxempire: 2024 Silver Market Forecast

Supply, industrial demand, green technology demand, and investment applications that determine the demand for silver.

The supply of raw silver in 2024 will either remain low or average, while the industrial demand for silver will increase. The two main factors impacting the industrial demand for silver in 2024 are the growth of solar and battery-electric vehicles.

In 2024, silver is expected to remain a popular investment choice through physical bullion, such as silver coins and bars, silver ETFs, and stocks.

According to reports and predictions, silver demand and prices will increase. Therefore, now is a good time to diversify your investment portfolio with silver for long-term investment safety and better value in the future.

    Notable Projections of Global Silver Demand

The demand for silver in various sectors is increasing globally. Here are some projections and expert reports on future silver demand.