Against the background of a number of world events (recovery from the recent economic crisis, the U.S. presidential election, etc.) markets are in a wait-and-see position. One of their parameters is volatility. Recently, this criterion for assessing the profitability of investment instruments has been underestimated, which is not typical of Ag. To understand whether silver will rise in price Forecast is compiled not only for the coming year, but also for subsequent years.
Silver as an investment product
Demand for silver in the industrial sector is much higher than in jewelry and investment. Metal is inferior to gold by more than 2 times by this criterion. This is due to the low cost of production against the background of the costs required to organize the storage of physical material. The cyclic nature of demand affects the volatility. It means that the price changes more often than for gold and other materials, which should be taken into account when choosing an investment instrument.
Over the past 10 years, there has been a bearish trend in the price of silver - the exchange rate has been low. At the end of 2020 and the beginning of 2021 there was a sharp change in value. Now there is a bullish trend - the price has increased. And in the last six months it has changed by 30% (upwards).
The purity of the metal does not allow its use in the production of jewelryBut this variant of the asset is in demand on the investment market. The advantages of the bullion investment method are its low price and quick rate change. Despite the general tendency to maintain a certain price range, surprises are still possible, such as the recent surge in the price of silver. This contributes to an increase in popularity of investing in such a metal. But the method also has disadvantages:
- Despite changes in the price, silver remains the most accessible asset, which does not allow you to earn a lot on the quotes, with the exception of large investments;
- When buying bullion, there is a risk of damaging it, which will further reduce the value;
- costs in the process of creating storage conditions (in a safe deposit box).
This way of investing is simple and available for the population of different categories: from individuals to legal entities and large organizations. Types of coins:
- investment: more affordable, mass-produced, frequent, not rare, and therefore not valued among collectors, because of which cost in the sale is often lower than the real one;
- collectible, jubilee, commemorative - types of coins produced for a special date, event, they are rare, limited edition, and therefore the price is higher than the investment.
If you choose the second option investments, the sale can be good money, as numismatists and antique dealers often offer a price that is many times higher than the original cost.
Jewels From gold It is very rare to consider silver as an investment instrument, and in this case we are not talking about silver at all, because this metal is even cheaper. It means that all the disadvantages of this way of investing will be more evident:
- low price in the sale, because it does not take into account the margin jewelry store (usually up to 100% when buying);
- Precious metal is considered scrap: jewelry (even new) is often mistaken for second-hand, because it already belonged to someone, could be worn at rare events (1-2 times);
- the attractiveness of the products is quickly lost.
When selling jewelry stones (even very expensive ones) are considered separately, which may greatly decrease the value of the piece, especially if the appraiser is not qualified. In this case, he will count only the value of the precious metal and not the stones.
An impersonal metal account is an investment instrument that does not require the purchase of physical metal. This method has several differences from the procedure of purchasing "live" silver:
- the depositor is credited with the metal, but there are no identifying features - you can see on the account how much Ag was purchased (in grams);
- the buyer does not get the bullion in his hands;
- the sale procedure is complicated by the need to conduct auxiliary operations, which contribute to reducing the profit (evaluation of the composition, payment of tax, if the precious metal is withdrawn from the account before 3 years from the date of purchase).
The peculiarity of MLA is the possibility to sell silver when there is a change in the exchange rate. Profit can be made only on the difference in the value of Ag at different times. It is necessary to closely follow the quotes, it is advisable to have experience in this or use analysts' forecasts to predict when the account should be closed.
Silver index funds, stock funds: mutual funds and ETFs
This way of investing has an advantage over the dollar. Thus, index funds are based on money supply, while currency is most often unsupported paper (after the abolition of the gold standard). The principle of investment is based on providing access to the precious metal to potential investors. It is not always necessary to conduct operations by yourself. It is possible to address to intermediaries, having the corresponding status.
- Mutual fund: buying a unit (share of stock) will allow you to receive dividends from the investment the company makes;
- ETFs are exchange-traded investment funds created by foreign companies, some of which are traded on the Moscow Exchange.
Index funds are called index funds because of their course of action - they follow the index. As a result, investors do not need to independently research the market for a profitable investment offer. This is a significant advantage of the method, especially for those who have no experience.
Shares of silver mining companies
The option of purchasing securities of major mining companies should only be considered if you have experience. An individual cannot trade on the stock exchange. It is recommended to turn to a broker. At the same time it is important to choose companiesThe company's shares have been growing steadily or there has been an increase in their price in recent months. In the future it will be possible to receive dividends from the profits of enterprises.
The disadvantage of this method is the exposure of securities to changes at the global level (unrest in countries, environmental disasters, nationalization and market trends).
Silver Value Indicators
Precious metalslike any other investment instrument, are subject to the influence of external factors. They depend not only on external conditions (market, world events), but also on each other. In addition, money, which have strengthened their positions, are also influenced.
Often, mining companies that lift silver from the bowels of the earth do not get even 50% of revenue from this metal. This means that the rest goes to other materials, among which may be valuable (e.g, gold). As a result, the value of Ag is shaped by the Au price and the problems of the gold mining industry.
Among the polymetallic companies, the most reliable are: Pan American Silver, Hochschild Mining, Polymetal.
Global economic and political developments
In order to predict what the silver price forecast will be in some time, it is necessary to understand how things are going on in the economic market and political arena. Weakening of currencies, an entire country, military conflicts, disasters, etc. - All these factors contribute to the unstable stability of precious metals. But 2 options are possible: growth or decline in the value of assets, which one to expect depends on the material. And the same precious metal behaves differently under the same circumstances. For example, in recent years Ag was falling in value, and due to the recent crisis it started to rise in price.
The change in the value of the U.S. currency is a clear criterion for determining the value of the precious metal. But there is an inverse relationship. So if the dollar falls, silver becomes more affordable. Different countries can buy it on this wave. When the currency is strengthening, the value of Ag is increasing. It is necessary to keep in mind that the appreciation of silver is not constant. A change in external factors will cause the exchange rate to jump again.
The quality of silver as an asset
In forecasting, the evaluation of material properties and composition is not the least important. Investment silver does not contain a significant amount of impurities. The pure metal is in demand among the population. Ag and Au are similar metals in their properties. For this reason, silver often ranks second in distribution and demand.
Advantages of Ag that are noted in the study of its properties:
- high electrical conductivity;
- is the most reflective of all metals;
- significant thermal conductivity;
The combination of these characteristics allows the metal to be used in the jewelry industry. It is also used in the production of radio components, contact part coatings and microcircuits. And the value of Ag is mainly determined by its demand in industry, which is the main area of applications.
The main reason for the popularity of the precious metal as an asset is the frequent changes in the rate. The appreciation of silver is replaced by price declines. But regardless of that, Ag will continue to be inexpensive. The demand for this asset grows even if the rate changes to the higher side, because investors have realized that only precious metals keep stability during the market changes.
The protective function of the means
Silver bars и монеты вряд ли когда-нибудь вырастут по цене столь же сильно, что и золото. Рекомендуется рассматривать такой материал, как защитный актив – он позволяет сохранить ценности (и денежные средства) от инфляции. Если приобрести Ag, можно сохранить государственную валюту, при этом падение ее цены не скажется на величине накоплений. Покупка драгметалла решает вопрос лишь частично, т. к. при продаже все равно будет утрачена некоторая доля заработка. Но, несмотря на недостатки, Ag до сих пор часто воспринимается, как способ сохранения денежных средств.
Relative exchange rate stability
White precious metal is known for its volatility. That means a constant change in its value. But more often than not, it rises and falls within certain limits. This peculiarity allowed us to refer the precious metal to relatively stable materials (judging only by the rate). The value usually does not go beyond the predicted values.
How the price of silver is formed on the exchange
Initially the price of precious metal is defined by the London Stock Exchange, then it is taken as the basis by the Central Bank of different countries, and the banks are adjusting the cost to their needs by forming the spread, etc. Silver goes up or down under the influence of factors:
- labor costs in the production of metal and valuable metal products;
- The taxation system is always different; there is a scheme where the miner gives all the recovered material to the state, receiving a percentage, but another common option is when the owner pays his or her own taxes on the precious metal;
- price dumping - occurs when countries do not have time to update the information of the London Stock Exchange, where quotes have already changed, and other indicators hit the market;
- the political situation, since all metals are indirectly related (by extraction technology, properties).
When there is a drop in the price of the precious metal, none of the countries will allow it to fall below the point of no return. This is due to the fact that today almost all states hold silver reserves, which means that they will keep the value of Ag at a certain level (minimum) until the situation improves.
Immediate silver price forecast from analysts
In recent months (2020) there has been an upward trend in the cost of silver. But the price remains affordable. It continues to change in 2021. But if you look closely, you can see that the demand for jewelry, industrial production has dropped significantly (by 9-23%).
The investment component of silver, on the contrary, almost tripled 30%. The forecast for the nearest future is unequivocally positive - there will be a slight increase in the Ag price relative to the value the precious metal reached last year. This is due to the continuation of the same trends that have been developing until recently, when the world economy began to emerge from the crisis.
Table: Long-term forecast for 10 years
It is difficult to predict the exact rate of the precious metal, because it is influenced by a large number of factors. To understand, the dynamics of the dollar rate against silver is extremely high - the chart goes through 400-600 points. For a beginner it is difficult to understand what is happening at the market at this time, how much Ag may go up in price, so it is necessary for specialists to make forecasts about the future value of the precious material.
And the most informative is the analysis of the price for a week, a year or even the next 5 years. The attempt to set the rate for 10 years is of an introductory nature, such information cannot be taken as a basis for realistic silver price forecasts (because it is speculative).
|Average annual price||Silver price range, USD|
Investment houses analyze changes in the price of precious metals. They also often prepare ratings of companies that are the most attractive from the point of view of investments.
Question and answer section
Is it worth buying silver jewelry and coins in a crisis?
Which MLA is better to open: gold or silver?
Shares of which silver mining companies is better to buy: domestic or foreign?
What will happen to silver in the near future?
Schedule for 50 years
The difficulty of making forecasts for decades is due to the fact that precious metal depends on a huge number of factors. If in the period that was taken to estimate the value of silver there is a major catastrophe, a military conflict, etc., the price of the precious metal can change significantly. The key criterion is the value of the dollar. To compare, today you can buy silver for $25.9. But this figure is changing rapidly. In a few days there are quotations with some deviations from the previous value (1-3 dollars).