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Despite price dip due to vaccine optimism, silver could hit $50 in the coming year with $100 soon to follow.

According to the latest price forecast by Citi, the white metal seems ready to post a 60% gain after hitting a seven-year high earlier this year, giving existing and prospective silver investors plenty to look forward to. This current price target is at least $40, with Citi’s Forex team leaning closer to $50 and listing $100 as a likely possibility.

This past year has caused millions of Americans to reassess their savings while urging investors to consider diversifying their portfolios with safe investments. Although crisis commodities like gold and silver are often invested in simultaneously, gold’s higher market price has repeatedly driven those with a lower budget towards silver as an alternative investment that can accomplish similar goals. In fact, silver investment demand is expected to grow exponentially with increase in industrial and medicinal uses. Furthermore, the ongoing currency debasement and heightened inflation expectations increase the lack of stock market appeal and drive investors further towards the safety of precious metals.

Currently, 80% of silver consumption istied to the nation’s GDP and 50% expected to come from the industrial sector, positioning silver to grow in spte or despite any form of pandemic recovery. The metal is also expected to remain a beneficiary of the global movement towards a greener environment and infrastructure.

Central banks have been some of gold and silver’s biggest price drivers. While they may not give a formal nod to the precious metals, they remain some of its more significant owners. Well known economist and analyst James Rickards is among those who believe the recent climb for gold and silver is just the beginning of a prolonged surge upwards. In fact, central banks could end up propelling these gains despite sky-high demand from the private sector. As Rickards points out, the stock market only managed to avoid a collapse this year due to a massive Federal Reserve bailout, which solidified the threat of inflation and withdrew investors from the appeal of the stock and bond market.

There’s been a noticeable shift in financial managers’ view of gold over the years, as well as a movement towards a recommended portfolio allocation of 30% to properly hedge investors’ portfolios.

Central banks have been hoarding gold and silver to protect themselves from unfavorable outcomes, however there are other concerning factos that bring to light the importance of diversification, such as the increasing national and corporate debts, budget deficits, corporate credit downgrades, a lack of private liquidity, and underperforming hedge funds among others. Overall, however, there’s been a loss of confidence in the weakening dollar and the Fed’s need to restore it. Analysts believe silver and gold’s gains would come in the form of inflation, as the recent multi-trillion dollar stimulus has reassured central bankers and lawmakers that they can print an endless amount of money with no consequence.

The repercussions have already materialized, however, in the lack of confidence in the dollar, one that will be difficult to recapture given the Fed’s loose monetary policies. Furthermore, the Fed’s commitment to low interest rates will continue to push real rates down, creating another price driver for a secure asset that may catapult the precious metals to new all-time highs.

One of the consequences of low interest rates and currency devaluation is inflation. Inflation can wreak havoc on your retirement savings which is why diversification is so crucial for retirement planning. Those who endured the financial crisis of 2008 can recall that retirees were hit the hardest as many lost 50% of their retirement funds and did not have the luxury to weather the storm and wait for markets to recover, which took several years for them to. Panic selling locked in losses resulting in financial catastrophes for many. That wake up call led investors to making strategic decisions about properly hedging their portfolios to attain financial security for their retirement.

Have you been thinking about adding precious metals to your portfolio?

Whether rolling over an existing retirement account to a silver or gold IRA, or purchasing minted coins to grow your wealth, the possibilities of protecting your investments are endless. With a self-directed precious metals IRA, you can easily roll over existing retirement assets from a 401(k), TSP, IRA, or similar account into a gold IRA, allowing you to benefit from investing in silver and gold while still retaining the same tax advantages as a conventional IRA account. To learn more about the best ways to secure your retirement savings, contact an Allegiance Gold Account Executive today!

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