The Magazine for Asian Investors
According to the Silver Institute, the physical silver investment could rise by double digits this year. The reasons for this are the macroeconomic uncertainties and increased inflationary pressure. This is expected to drive investors into silver as a safe haven to protect their prosperity.
In addition, the demand for silver in India is expected to increase again due to the relaxation of the pandemic measures and the recovering economy.
Macroeconomic influences are likely to play a special role this year, as inflation figures have skyrocketed in much of the world. Initially, this came as little surprise to the big thinkers as the economic standstill at the start of the Covid-19 pandemic disrupted the supply chain. Then, as countries slowly resumed economic activity, demand increased but supply chains were not yet restored. Surprisingly, however, inflation stayed longer and continued to rise. Thus, it is obvious that the rising inflation has to do with the massive expansion of the currency supply.
This puts central banks, especially the Federal Reserve, in a tricky position. On the one hand, there is rising inflation; on the other, the economy and the markets. Plans to dare an interest rate hike are already causing the markets to wobble, which is not a good sign if it comes to that in the end. Probably, therefore, a slight increase in interest rates this year and hope that a soft landing of the markets will take place so that the disaster does not end in a recession.
Which in turn will likely be a bull flag for precious metals investors, as with a slow rise in interest rates, real interest rates will remain negative. This means that citizens must continue to worry about their purchasing power.
Of course, global events such as the current crisis in Ukraine must also be monitored. In times of war, safe havens such as precious metals such as gold and silver are in high demand.
In addition, the price of gold should also be closely monitored. In previous bull markets, gold moved first then silver, which is why the gold movement is important here.
So the signs continue to point to a good year for precious metals investors. Safe haven investments are not a bad choice in times of uncertainty.