Should I Invest In Gold Or Silver? – Physical Gold Video
In this video, we’ll take a look at silver’s prospects as an investment. Over the past 5 years, interest in silver has grown exponentially to the point where we now get almost as many silver enquiries as gold.
So is silver a worthwhile investment in 2023 and beyond, and what can we expect from it, we examine silver investing in 2023?
I’d like to start by looking at downside risk. The silver price fell from around £13 an ounce at the start of 2017, to £12.50/oz the following year, and nearer to £12 an ounce in 2019. Clearly, the prospect of owning a depreciating asset is unappealing. However, silver pushed beyond £20/oz in 2020 and has stayed in the £17-20/oz range since then.
This demonstrates that the silver price is much more volatile than gold, both on the downside and upside. We always describe the two precious metals to new investors in simple terms. Gold investment is a way to try and reduce risk in your life. But silver is about taking risk.
The best place to start when choosing whether to invest in gold or silver, is understanding your appetite to risk. If you have £10k to invest, how much do you want to risk in an attempt to gain a turbo-charged return with silver? And how much do you want to protect with more modest returns and downside risk with gold?
However, unlike gold, silver’s demand consists predominantly from industrial use. As the world’s most conductive material, silver is used in most electronic components, solar panels, photography and medicines. The digital age is only going to develop over the coming years, creating new electronic demands on silver. The search for alternative energy will lead to increasing silver demand with electric cars and electric solar energy. So with industrial demand rising, you could argue that downside risk to silver is minimal or at least limited.
It’s also fair to say that the silver price has suffered far worse in recent years than the gold price, with clear suggestions that it’s been oversold. The ratio between the two metals’ prices has widened from a long term average of 47:1 to 70:1 a few years ago, then hit an incredible high of 95:1, but as of the start of 2023 has fallen back to 78:1.
This general widening theme may scare inexperienced investors, but this would suggest a buying opportunity in 2023 for silver. We’ve already seen silver start to close the price gap with gold in the second half of 2022 and beginning of 2023. If you can lock in prices when the silver price is so low, your upside becomes magnified. The silver market is far smaller than that of gold, so prices can be more volatile. It also means that the price can move up in percentage terms far quicker and far greater.
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The silver price could well receive a double boost over the coming years.
As well as the rising industrial demand, there’s plenty of uncertainty in the global economy to boost silver as a safe haven. The high inflation environment experienced in 2022 is not expected to recede quickly. Interest rates are expected to increase and then remain high for some time in an attempt to curb post-Covid energy and material price rises. The continued unrest in Ukraine will prolong and intensify supply squeezes.
The unfortunate economic consequences of these moves will be rising unemployment, business closures and reduced business investment. For the markets, we’re expecting to see significant price corrections in the major equity and housing markets. In a similar vein to the Covid years, gold and silver will likely be the main beneficiaries as investors seek protection and shelter from falling mainstream markets.
Gold will likely rise first, with silver following behind. But once silver starts its upward trend, the pace of increase will outstrip that of gold.
A lot of investors ask me whether they should buy gold or silver. After all the two metals are quite different. For me, there’s a strong case to own both. Diversification is key in today’s digital globalised economy, so investing in silver and gold is a great way to hedge your hedge!
So there you have it. 2023 and beyond are set to be exciting years for silver investing. Courage may be needed to enter a market which has fallen in value, but history will tell you, that’s the exact time to stack your claim.
If you feel silver could play a role in your investment portfolio, or you simply want to buy some silver coins or bars, then don’t hesitate to call our team of experts on 020 7060 9992 for any guidance you need.
I hope you’ve enjoyed today’s video. If so, please check out all 20 videos in the gold & silver investment guide series.