The Magazine for Asian Investors
Silver fell below $23.50 last week after the U.S. jobs report was better than expected.
Gold and silver are experiencing a rough patch. Gold futures fell towards the $1700 mark but quickly rebounded. At the moment, gold is at $1780/ounce. Silver was able to overcome the damper with a small jump above the $23.50 hurdle and is currently trading at $23.73/ounce.
Under pressure, too, are the exchange-traded gold and silver funds..
Short-term under pressure, long-term bullish?
Experts believe August and September will be volatile times for precious metals. That could trigger a short-term wave of selling.
But the outlook for precious metals is clearing more and more. The U.S. Senate recently approved President Biden’s infrastructure plan, which is expected to free up about $3.5 trillion in federal funding.
Key points in the plan include the expansion of renewable energy and electric cars.
Immense amounts of metals and other raw materials will be needed to realize the plan.
Especially silver, which is used in many industrial applications. Whether electric vehicles, solar cells, wind turbines, or charging stations. Silver is a key component when it comes to the future. Other metals like nickel, lithium, and copper will also play a key role. Nickel and lithium especially in energy storage and copper is probably the most needed metal when it comes to electrification. Not to mention rare earth elements, which to this day are mainly controlled by China. In particular, neodymium is needed for permanent magnets in electric motors.
Experts agree that silver will benefit from the coming electrification.
The major auto markets of China, Europe, and the U.S. are already in transit away from the internal combustion engine to the electric vehicle.
Even though short-term factors have put a small damper on the silver price, the long-term factors are in place to lift silver at least above the $30 level.
How can I participate in the silver market?
The easiest alternative is to go to a bullion dealer and buy physical silver.
If you don’t want to bother with storage and transportation, ETFs and trusts are a great alternative.
Examples such as Aberdeen Standard Physical Silver Shares ETF (SIVR), iShares Silver Trust (SLV), and Sprott Physical Silver Trust (PSLV) are ways to get exposure to the silver market.
Silver miners are another option. This alternative is probably the most comprehensive as it requires a lot of work and time. A comprehensive analysis should be done by every investor before investing in any equity.