When you think of precious metals, you probably think of gold. For thousands of years, gold has played a vital role in civilization, supporting trade and even spurring wars. However, gold is not the only precious metal, nor is it the only precious metal product offered by Gold Safe Exchange. Silver is also a precious metal and has an important role to play both historically and now.
Over time, silver has generally gained in value. At the turn of the century, silver sold for less than $5 an ounce. Recently, silver has been fetching about $24 per ounce. So, if you bought silver bullion back in 2002 at a fair price and held it, it’d be worth a lot more now.
Silver also offers an excellent way to diversify your precious metal assets. If you read up on stock investing, you’ll often hear experts urging people to diversify their stock portfolios. You don’t want to have all of your wealth in one asset because if that asset loses value, it could wipe out your wealth.
Similarly, people who buy precious metals often diversify. While gold is perhaps the most common precious metal asset, many also purchase silver. If gold prices drop, silver may offset the decline.
Silver, The Great Recession, and the COVID-19 Pandemic
History doesn’t repeat itself, but it often rhymes, as the old saying goes. In 2005, silver sold for about $9 an ounce. By 2006, silver retailed for about $12-13 an ounce. Then, during the 2007/8 financial crisis and resulting “Great Recession,” silver prices steadily climbed, reaching roughly $20 an ounce in 2008. Likewise, silver sold for $17-18 in the opening months of 2020. Then, the COVID-19 pandemic set in, and by August 2020 silver was selling for more than $25 an ounce.
Like gold, many people see silver as a safe-haven asset and during periods of economic turmoil, demand for safe-haven assets may climb, sending prices higher. Silver may also be used to hedge against currency risks. Trade rates between different currencies, including the dollar, euro, yen, ruble, and more can swing wildly. Precious metals may offer stability amid fluctuating exchange rates.
Parties may also purchase silver, gold, and other precious metal assets during periods of high inflation. When inflation sets in, money steadily loses value. Back in 2019, $20 at the grocery store would have typically bought you more stuff than $20 today. Silver prices were also cheaper in 2019 than today.
Silver is cheaper than gold, palladium, and platinum. This means you can buy more of it. People who store wealth in bullion may appreciate having more silver on hand. Silver also offers a variety of tangible uses.
Silver is also found in electronics, media storage, batteries, and more. Silver is even used in advanced industries and technologies, like 3-D printing and solar panels.
Such myriad uses may help keep silver in high demand. Prices are typically influenced by supply and demand, with high demand and limited supply often sending prices higher. Given all the benefits silver offers as an asset, it’s no surprise that so many of Gold Safe Exchange’s customers purchase it.