Is Now the Time to Start Investing in Silver?

If you invested in silver 4 years ago, chances are that you’re not too happy with your decision. Unfortunately, silver has been declining for quite some time now. Nonetheless, I believe that the precious metal has reached the bottom and is likely to start climbing from here. Today, we’ll talk about why.

Demand For Physical Silver Is Growing Rapidly

When it comes to commodities, the leading reason for price movement in the market is supply and demand. In fact, that’s the reason we’ve seen the massive declines in the value of oil that we’ve seen as of late. Essentially, the world is producing far more oil on a daily basis than it is using. As a result, the price of oil has to fall to help increase demand. However, the exact opposite is happening when it comes to physical silver.

While some may argue that physical supply and demand of silver isn’t the only indicator, and rightfully so, it’s definitely an important one. I understand that silver futures and ETFs play a big role as well, but in all reality, the ultimate factor boils down to supply and demand. With that said, when it comes to silver, the demand for the metal is growing exponentially. In fact, people are purchasing old silverware and jewelry just to get their hands on the precious metal. In fact, in the United States, silver imports climbed by 11% in the month of August and are likely to continue doing so. However, the supply of the metal isn’t keeping up with the pace at which demand is growing. That’s a perfect storm for growth in price.

Market Conditions Are Also Increasing Demand For Silver

Another major factor in the growth or decline of the price of silver is the current state of the market. The reality is that like gold, silver is considered to be a safe haven investment. That means that when markets decline, we tend to see investors flocking to the metal as a way to keep their investments safe. Now is a great time for that. If you haven’t been watching the markets recently, we are in the midst of volatility. The year 2015 simply hasn’t been good for the global market as a whole. To push silver even further up, other safe havens are being rejected, and for good reason. Two of these safe havens include…

  • US Treasury Bonds – US treasury bonds used to be in competition with silver as a safe haven. However, as long as the Federal Reserve keeps their interest rates low, returns on these bonds are likely to stay low. Therefore, investors are more likely to look to silver as a way to keep their money safe than to look to treasury bonds.
  • Swiss Franc – The Swiss Franc was also heavily regarded as a safe haven in the past. However, the currency has declined recently, pushing it out of safe haven status.

Final Thoughts

In the end, silver has fallen for quite some time, but at this point, it has met support. The reality is that as demand continues to grow and supply continues to fall, we can only expect one thing… growth in price. This trend is just starting and likely to last quite a while. So, if you’re looking for a safe place to invest, look no further than silver!

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