Many investors consider silver primarily as a financial asset. However, the metal's industrial role impacts its price more than its financial role in terms of price trends and movements. The contradictory nature of silver is often beneficial to investors who can diversify their portfolios two-fold.
Recent silver price trends have caused concern regarding the metal's strength (in terms of its price). However, with industrial demand for silver expected to increase in the foreseeable future, is silver a wise investment?
What Makes Silver Lucrative Industrial Investment?
The industrial applications of silver are widespread across a number of sectors. These include microchips, alloys, medical equipment, batteries, solar panels and more. Silver is also found in a wide range of consumer commodities. And of course, the metal is also used by the jewellery industry.
However, in order to continue efforts toward a green economy, silver is also needed for future technology. Silver's green energy applications currently include solar energy, nuclear energy, and the appliance charging sector. The demand for silver, whose properties aid in zero-emission, will always be sustainable.
Silver as Smart Financial Investment
The silver price tends to fluctuate more than the gold price, but it still performs strongly as an inflation hedge and store of value. The silver price generally trades at a ratio of 80:1 to the gold price. This means that approximately 80 ounces of silver equal 1 ounce of gold in terms of price.
Even if silver investments come with a higher level of volatility than gold, there still exists a negative correlation between silver and stocks. In other words, silver prices and the stock market tend to move in contradictory directions. If the stock market is underperforming or in a state of recession or depression, then silver prices increase.
As with most commodities, the speculative nature of the silver price is influenced by supply and demand. Financial and industrial investors are able to influence the market by taking large positions in the metal, which in turn reduces the supply of silver and increases its price.
What are the Prospects of Silver in 2022
According to industry experts, the global demand for silver is expected to continue growing. The Silver Institute's World Silver Survey 2022, found that demand for the precious metal could jump to a record high of 1.112 billion ounces this year.
Even with the recent drop in price, both silver demand and price are expected to remain well-supported throughout the rest of the year, especially as inflation concerns loom.
Although market trends can seem rocky due to the high volatility in the industry, Silver's long-term prospects remain excellent. If you are looking to buy silver online, and take advantage of the upward prospects in the future of this precious metal, then visit Suisse Bullion. SwissBullion.eu sells silver bars and coins in wholesale quantities for investors looking to take larger positions in the grey metal.