The decline in silver prices in recent years has been widely publicized, and silver critics have used it as an example of why you shouldn’t buy silver. While silver’s decline from record highs was, in fact, steep and swift, the market appears to have found equilibrium at current levels.
Now ask yourself this question: Would you rather buy something at all-time-highs or would you rather buy it at a substantial discount from those highs?
Assuming you answered “buy at a substantial discount” then right now could represent an excellent long-term buying opportunity and value in silver.
In fact, we would not be surprised to see silver prices double from current levels in a short period.
What could potentially drive such a move in silver?
Here are a few reasons:
- The gold/silver ratio at current levels: The gold/silver ratio currently stands at over 81, meaning it takes 81 ounces of silver at current prices to buy one ounce of gold. To put this in perspective, this ratio’s average over the last two centuries is estimated to be 37. Using the current price of gold, this would equate to a silver price of over $33 per ounce – more than double current levels. While this ratio could potentially “stretch” even further from its present reading, we are of the opinion that this ratio will eventually revert to more average levels and silver prices will do a lot of catching up to the price of gold.
- Production levels: Demand for silver has remained robust. This makes sense given the metal’s usage in coins and industrial processes. Silver is an essential component in many modern products and factories. It stands to reason that more and more uses for silver will be discovered, and demand for the white metal could potentially increase significantly. On the flip side of demand is supply. Silver production has seen some significant cutbacks as lower prices took a toll on miners and producers. As demand potentially increases, silver prices may rise without a corresponding growth in supply.
- Investors may seek out alternatives: The stock market got the New Year off to a very rocky start. Since that time, however, equity markets have once again come roaring back and are not far from previous all-time highs. Are stocks more likely to jump higher or are they more likely to be sold off? What might happen if the Fed raises interest rates further and markets do not have massive QE to act as a crutch? Some would say that stocks could enter a bear market, a severe bear market that could potentially wipe out crazy amounts of investor value. If stocks begin to falter, investors may seek out perceived haven assets such as silver and gold. A mass exodus from stocks into precious metals could potentially drive silver prices sharply higher from current levels.
The bottom line is this: Silver is not likely to go much lower from current levels and could potentially go much, much higher in our view.
If you are interested in buying silver for diversification, now is the time. Fortunately, buying physical silver today is simple, convenient and hassle-free. You may want to consider using your IRA account or opening a new precious metals IRA. These accounts allow you to accumulate physical silver with the potential benefits of an IRA account.
Don’t wait for prices to double. Explore your options today. Speak with an Advantage Gold account executive today and we will answer any questions you may have and show you just how easy it is to begin buying physical silver in an IRA account. Call us today at 1-800-341-8584.Tags: add gold to my ira, add silver to my ira, advantage gold, coins, diversification, gold/silver ratio, invest in silver, investing in gold and silver, investment alternatives, manufacturing, physical silver, portfolio diversification, precious metals, silver, silver production, supply and demand