Silver’s value changes every day. When it comes to value, silver is second to gold. It is a precious metal that has special properties that make it very useful and highly sought after. Pure silver is the best conductor of heat and electricity of all the other metals. It also is the best reflector of visible light. Silver is a very popular metal for jewelry because it has a bright and metallic luster and is easy to form into jewelry. For most products like jewelry and tableware, pure silver is too soft. Therefore, these products are often made with sterling silver, which is an alloy of 92.5% silver and 7.5% copper. In terms of industrial use, silver is a vital component in semiconductors, LED chips, batteries and even water purification. Just like gold, silver is an important metal that makes almost everything in the world function.

Silver is both rare and not rare. Although gold is more rare than silver, above-ground silver is actually more rare than gold. Gold is about 5 to 7 times more abundant above ground than silver. However, beneath the surface, silver is about 19 times more abundant than gold. A key difference in rarity between the two metals is that when most silver is brought to the market it is consumed. About 90% of all mined silver has been consumed. This is due to the nature and wider use of silver in more industrial-grade products. Mining silver is actually too expensive to make a profit so most silver that is found is a byproduct of mining other metals. That being said, right now silver is considered a very rare and undervalued above-ground precious metal.

In total, silver is rare and not rare at the same time. There is a large amount of it underground on the earth, but it is too expensive to mine it alone. However, it is rare above ground and the demand for the metal due to its commercial usefulness keeps it in a supply deficit.

Speculation, supply, and demand drive silver prices. Silver’s value is much lower than gold. In other words, the silver market is much smaller in value in comparison to the gold market. Because of this, it is much easier for the price of silver to be influenced by a large trader or a private institutional investor. An example of this was in 1980 when the Hunt Brothers helped cause a spike of London Silver Fix to $49.45 per troy ounce. Short selling also artificially decreases the price of silver. Because silver has more applications than gold, the price of silver can be affected by industrial, commercial, and consumer needs. This will also cause the price to fluctuate.

Lastly, the fluctuations of silver prices often mirror gold price fluctuations. This means factors that lead to gold changing in price, can end up being tracked by the silver price as well. In total, silver has more factors that affect its price due to it its smaller market value and the fluctuations in the price of silver reflect that.    

Within the last two years, silver experienced a 70% price increase. And some commodity strategists say this trend is likely to continue. Even though silver’s demand is 50% industry and 50% investors, the former is what is driving its recent rise in value. With solar panels becoming more financially accessible along with government investing in renewable energies, green programs are hungry for silver. This is because silver is a major resource needed for the manufacturing of solar panels and other green technologies. Additionally, the rise in silver price during this time was also because of the disruption of the economy by the pandemic. Silver is a hedge against inflation as well as economic and geopolitical uncertainty. Seeing the price of silver rise within that time frame since the start of the pandemic definitely seems to back that theory up.

Looking towards the future, there are a lot of good indications that the value of silver will continue to increase. With the supply of silver increasing, the demand for silver will outpace two-fold that supply two-fold. Overall, the silver within the next couple of years seems to have all the indicators that it will be increasing.   

Silver is a great alternative investment to complement a diverse portfolio. There are many reasons that people invest in silver. However, investing in silver has its unique considerations and risks that investors need to consider. Investing in silver functions like gold in the way that it is a good hedge against inflation as well as economic and geopolitical turmoil. Silver can be a good way to counterbalance your portfolio the same way investing in gold does. Just like gold silver holds its value in the long run and fares well when interest rates are low. However, in the shorter run, silver is more volatile. Some of the factors that affect silver differently are that it is sensitive to the recession, vulnerable to technology shifts, and has more unpredictable price fluctuations.

A big reason that people invest in silver is that it is cheaper than gold. This allows an investor to get more metal for their money. This is a benefit because your return on investment can yield higher exponential profit. Overall, the reason people often invest in silver is that it can be a good alternative to investing in gold. It is an attractive alternative because silver is cheaper than gold, it is easier to liquify, it has more industrial uses, and silver is arguably undervalued currently. 

There are favorable windows to invest in silver. If your interest is investing in silver, it is best to understand the overall trends to invest at the right time. Currently, the outlook for silver investing in 2022 and beyond looks promising. Some of the factors that are compelling for silver to be a good investment now are: Chinese silver demand at an all-high, returning demand for physical silver, delays in production from the United States Mint, and the global silver supply is in a deficit. All these reasons bolster the claim that silver has a great prospect in the near future. In other words, the best time to invest in silver is soon based on many indicators.

In terms of price analysis, silver traded as high as $29 per ounce in 2021 and as a low at about $21 an ounce. Many professionals and investors predict for 2022 that silver will break over $30 an ounce by the end of the year. If you invested in gold today, what would the price of gold be in ten years? Obviously, no one knows the future for certain, but there are four key reasons why the price of silver will climb even higher. The reasons are: it is possible the amount of silver in the mines will decrease, there will be demand for silver in the future, silver demand will increase with more production of solar panels and electric vehicles, and silver prices are volatile in the short-run, but have a trend of rising over time. All these factors point towards good investment potential for silver right now.

When it comes to the best times to invest in gold throughout the year, on average the best time to invest in silver is January, March, or late June. However, historical data shows that the best price for investors of silver is in early January or the previous year. This is because typically silver doesn’t come close to revisiting its prior year price. In total, 2022 is most likely going to be a great year for silver.

Sterling silver is not the same as “Karat gold”. Many people think that sterling silver is the indicator of the purity of silver just like how gold’s purity is measured in Karat. This is not the case, however. Sterling silver is a percentage of pure silver alloyed with other metals to increase its strength whereas “Karat gold” is an actual measurement of fineness. This is usually done when silver is being made into jewelry, silverware, coins, or other products. The reason the alloy Sterling silver is used is that pure silver by itself is a relatively soft metal. Sterling silver composes of 92.5% silver and 7.5% other metals. Usually copper is a part of this alloy, but sterling silver can contain zinc, germanium, platinum, boron, or silicon. 99.9% silver is known as “Fine silver”.

The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.