Is silver metal a good investment? How to invest in silver? Is it a good time to buy? So many questions that may come to mind when you begin to consider “poor man’s gold”.
When it comes to investing, you have surely heard of the complementarity of gold and silver. The price of silver tends to correlate with that of gold, but not in the same way. Indeed, the heavy industrial use of silver makes the price of silver much more volatile. Given the current economic situation and the constant increase in the demand for physical silver, we have listed for you the 9 reasons to invest in silver.
An affordable precious metal
It is an affordable investment, within the reach of all budgets. Currently, silver costs 74 times less than gold: indeed, today, the gram of silver is trading around 0.66 euro cents, against 48.82 euros per gram of gold. Still, it will protect you as well as the yellow metal in the event of a crisis.
Thanks to a VeraCash account, it is possible to buy 100% physical silver for 1 €.
Silver, a real value
Silver, like gold, is the ultimate form of money because it cannot be created out of anything (and therefore depreciated) like paper or digital forms. To own money is to own a real asset that has served as money for thousands of years. History shows that silver has been used more than gold for making coins: the fact that silver is cheaper than gold makes it extremely liquid, it is circulated and exchanged very easily. . A silver coin makes it easier to buy everyday consumer goods than gold.
Increasing demand
It is above all in the industrial sector that we find the greatest consumption of silver (56%), in particular in the “green industry” which is a very demanding and growing sector. Silver is also sought after by traditional industries such as the automotive industry, as well as in high-tech sectors, such as nanotechnology and the medical field.
Global demand is constantly changing, especially in China and India where physical silver is used to make jewelry and offerings. In the space of 4 years, in India, demand has increased by more than 600%! That of gold was maintained …
Another example, a cell phone contains 333 milligrams of silver. According to the IDC (Consumer Disparity Index), 1.7 billion smartphones were sold worldwide in 2018. This is equivalent to 510 million grams of silver, or 16,396,604 ounces of silver that were used only for phones.
Complex extraction and recycling
There has been a significant drop in investments for research and prospecting for new deposits. Mining companies have indeed had to reduce their costs to generate profits, despite everything.
According to figures from the Silver Institute, silver mining was down in 2017, a trend that was confirmed in 2018; the fact that had not happened for 14 years. Every second in the world 0.77 kg of silver ore is produced, or 24,282 tons of this precious metal per year.
Silver is a non-renewable resource, which threatens to run out in the coming years given the current rate of exploitation. Silver metal is not recycled very much today, because when it is used in small quantities, in smartphones, for example, recycling is too expensive and too complex.
Exhaustible reserves
According to the USGS (the Institute of Geological Studies of the United States), an American government agency dedicated to earth sciences, 1,740,000 tons of silver would have been extracted until the year 2017, of which 7-10% were lost. It would not, therefore, be 79,308 tons of silver that would have been extracted from the ground since the beginning of the extraction of silver, which is situated as for gold, at the end of Prehistory.
A devalued course
According to a large majority of experts, the price of silver is strongly depreciated. While an ounce of silver is currently trading around $ 25, several market elements are leading many financial analysts to judge these prices, on the one hand, particularly undervalued, but also likely to rise sharply.
Historically, the ratio of the price of gold to that of silver has always been in the order of 16 to 1 . Thus, from antiquity to modern times, except for a few very specific moments in history, an ounce of gold has always represented around 16 ounces of silver. However, in recent decades, it has been observed that the financial value of silver tends to gradually erode compared to that of gold to the point that an ounce of silver now represents only 1/74 th. worth an ounce of gold! Silver is a non-renewable resource, which threatens to run out in the coming years given the current rate of exploitation. Silver metal is not recycled very much today, because when it is used in small quantities, in smartphones, for example, recycling is too expensive and too complex.
Exhaustible reserves
According to the USGS (the Institute of Geological Studies of the United States), an American government agency dedicated to earth sciences, 1,740,000 tons of silver would have been extracted until the year 2017, of which 7-10% were lost. It would not, therefore, be 79,308 tons of silver that would have been extracted from the ground since the beginning of the extraction of silver, which is situated as for gold, at the end of Prehistory.
