The Silver Investing Climate in 2016

Thursday, February 25, 2016

silver bullion

When you ask people what they’re doing to stay out of the stock market in what appears to be a year of a bear market, most people will say that they’re going to safe havens like real estate and gold. But what many people forget about is the completely viable alternative to gold: silver. Silver is not only one of the world’s safest investments due to its uses as a precious metal, but its use in industry as well. But does that translate to an opportunity-rich investment climate this year, or will the metal continue to move sideways?

Silver: Is It a Viable Alternative in the World of Precious Metals?

In February, an e-mailer asked The Telegraph if now might be the time to look at safe haven investments—particularly in the context of a sluggish stock market—and whether or not silver represented the best opportunity for that safe haven. Although other exposure to gold, platinum, and palladium might serve the same purpose, one has to wonder: is the silver investing climate ripe for a boost in prices? Or is silver just along for the ride?

In the case of the Telegraph, they quoted Russ Mould of AJ Bell as saying: “Only 10pc to 15pc of gold demand comes from jewelry and industrial uses, while for silver this figure exceeds 50pc as it is used in areas such as batteries, LEDs, solar energy, dentistry and photography.” In short: silver has more industrial uses, which could boost its value as a “safe haven” bet if you aren’t comfortable with too much exposure to gold.

But what does this mean for silver prices this year? Let’s take a closer look at silver as an investment in the remainder of February—and then for the remainder of 2016.

Understanding the Silver Investing Climate

Silver has been hovering in the $14-15 range for a while now, and investors are looking at whether or not this is the time to jump in before silver begins another ascent towards $20. Of course, none of those prices are guaranteed—which is why many investors have been a little wary before jumping in the deep end of the silver pool.

“Price is now trading sideways and flanked by this week’s low of $14.95 and this week’s high of $15.60,” reported DailyFX.com this morning, apparently expressing little confidence in the remainder of silver’s outlook for February.

But let’s zoom out. There’s more to the silver investing climate than the waning days of February. Looking at macroeconomic factors, DailyFX found that there may be a reason to be bullish on silver, after all, particularly as economic problems continue to provide a hazy outlook for all other markets.

For now, it appears that investors are waiting and seeing. And if you’re the kind of person who likes to get in ahead of the market, it may be the time to consider investing in silver. When the investors come in earnest, you’ll want to have solidified your position on silver. The only question is: when?  

Darren Capriotti

Darren Capriotti has been a market analyst for the past decade and is an expert in precious metals. He prides himself on his ability to analyze the market and offer true value to investors with questions about gold, silver, and other precious metals. Highly educated, incredibly passionate, and more accurate than most, Darren offers a true, unbiased look into what investors can expect in the precious metals market. You can reach Darren at dcapriotti@gold-eagle.com.