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The Silver Lining of The New Gold Standard

By August 7, 2020 No Comments

As gold keeps soaring to unprecedented levels, investors are looking to silver for increased profit margins on their portfolios.

Precious metals have been known as safe haven commodities, particularly in times of economic turmoil so their extraordinary surge in these unprecedented times is quite timely. Gold is advancing now for the ninth consecutive week, with the biggest pops occurring over the past three weeks, passing the $2,000 and breaking records daily.

Silver, meanwhile, has also been on the same trend, soaring significantly in value. Since its March 2020 $11.63 price, silver prices have more than doubled, trading today (August 2020) at over $29, gearing up to triple its price point. While many analysts believe it will soon surpass the $50 benchmark, some are even predicting triple digits for the white-hot metal.

What’s Next for Silver Prices?

 

With other white metals such as platinum and palladium hitting price milestones, the move to precious metals is contributed to a number of factors creating the perfect storm. At the forefront of this movement, one major catalyst if the Federal Reserve’s embarking towards unprecedented currency creation, monetizing the national debt and raising the inflation rate.

The US dollar asset is also becoming less and less attractive as the Dollar Index has been sliding and both international and domestic investors are seeking alternatives. Seemingly, the dramatic takeoff of the precious metals markets is directly reflective of what is likely the start of a longer-term decline  in the Federal Reserve Note’s value and status.

The gold and silver markets are also significantly smaller compared to global currency and bond markets. It can easily scale even with a small proportion of investors and institutional asset managers allocating new capital to these precious metals.

That said, these precious metals are scarce and becoming more and more rare, driving supply down and demand way up.

Investors looking to hedge their portfolio with gold to see long term gains, are now also considering diversifying with other precious metals, particularly silver.

With the gold bull market in full swing, silver’s price may become more attainable to some investors. Given its incredible growth, it provides an opportunity for significant returns and increased profit margins. At this point, the prospect of seeing the silver spot price go past $50 in the near future, is not so far fetched anymore.

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