Tags: silver | gold | central bank | recession.

Is This the Year Silver Outshines Gold?

Is This the Year Silver Outshines Gold?
(twoellis / 123RF)

Trevor Gerszt By Thursday, 29 February 2024 03:15 PM EST Current | Bio | Archive

While there are four precious metals that you can own with an IRA – gold, silver, platinum, and palladium – only two of them garner significant interest: gold and silver. And while gold gets most of the headlines, silver tends to get left in the shadows.

All of that changes when silver makes a run, however, which it has done a couple of times in its history. And when silver does start to make great gains, its gains (percentagewise) can actually outclass gold’s.

We saw that in the aftermath of the 2008 financial crisis, when gold nearly tripled from its 2008 lows to its then all-time high in 2011 but silver more than quintupled. And there’s no telling when silver might do that again.

What everyone wants to know is, when will silver see that big price break? Given current silver and gold prices, and the high price ratio between gold and silver, many people would expect silver to be trading far higher today than it actually is. Could this be the year that silver finally catches up?

What’s Going for Gold?

Let’s look at gold first, which is enjoying a pretty good year so far. After hitting new all-time highs late last year, gold has traded pretty consistently between $2,000 and $2,050 an ounce this year.

Even though stock markets are at all-time highs, and there’s normally no positive correlation between stock markets and gold prices, the gold price is doing well just like stock markets are. But will they eventually decouple?

If we look back to what happened in the 2008 financial crisis, stock markets started to decline after hitting all-time highs in October 2007. Gold continued to rise for a while in early 2008 before it too start to fall, as growing panic and uncertainty in financial markets led to fire sales across the board.

But gold eventually bottomed out and rebounded while stocks continued on their decline. By March 2009, gold was 25% higher than it had been in October 2007, while stock markets were down by over 50%.

That’s not to say that what happened then will repeat itself, but it's an example to look at and think about when trying to figure out what might happen to gold prices this year.

The gold price has been the beneficiary not just of safe haven buying from investors looking to safeguard their financial well-being, but also of buying from central banks, which continue to add gold to their vaults at near-record rates.

With fear of recession in the U.S. growing, and with the UK, Germany, and Japan already in recession, safe haven buying should continue to be a strong driver of gold demand, helping to keep upward pressure on the gold price this year.

What’s Going for Silver?

Silver benefits to an extent too from safe haven buying. If the next recession is a bad one like 2008, silver could be seen as almost as an extension of gold, a secondary safe haven to help preserve wealth.

But silver also has a few other things going for it. Industrial demand for silver is expected to rise this year, to its second-highest level ever. One of the key drivers remains the photovoltaic market, as silver is the key ingredient in the manufacture of solar panels.

Even if economic activity slows, demand for green energy will likely remain robust. So even if solar panel demand takes a hit during the next recession, it should rebound afterwards and continue to climb in the future.

With solar panel demand remaining strong and the potential for greater investment demand for silver as a safe haven asset, there’s a lot to look forward to when it comes to the future of the silver price.

The main question is, will this be the year that silver outperforms gold, or will it take a while for silver demand to really kick in?

Again, looking back to the last crisis, silver underperformed gold in 2008, but definitely outperformed gold from 2008 to 2011. So while this might not be the year that silver outperforms gold, this might be the year to think about stocking up on silver in order to take advantage of potential price growth in the future.

How to Buy Silver?

If you’ve never bought silver or other precious metals before, you may be wondering what the best way to buy silver is. And honestly, the best way to buy silver is the way that you feel most comfortable.

You can buy silver directly with cash and have that silver sent directly to your doorstep. That can be silver coins or silver bars, both of which are popular silver products.

There’s also the option of a silver IRA , which allows you to use pre-tax dollars to purchase physical silver coins and bars. One popular method of funding a silver IRA is through a 401(k) to silver IRA rollover, which allows you to make a tax-free rollover or transfer of assets from your existing 401(k), 403(b), TSP, IRA, or similar accounts into a silver IRA.

No matter which way you choose to buy silver, now is the time to start thinking about where silver plays into your financial plans and goals. If silver does end up gaining in price in the next couple of years, you’ll want to have bought silver sooner rather than later.

With over $2 billion in precious metals placements and over 5,000 5-star reviews, Goldco has helped thousands of customers benefit from owning silver. We’ve worked hard to become one of the best silver IRA companies in the country through our dedication to customer service and quality silver products.

If you’re looking to buy silver, whether it’s a direct cash purchase or through a silver IRA, call Goldco today to learn more about all the silver options available to you.

Trevor Gerszt is the founder and CEO of Goldco, a precious metals dealer in Los Angeles. For more than 20 years, Trevor has sought out ways to help people build long-term wealth through the security and stability of precious metals and other alternative assets. Goldco is A+ Rated by the Better Business Bureau, a 5-Time INC 500 Winner and has countless 5-Star Reviews for its quality customer service, dependability and strong reputation.

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While there are four precious metals that you can own with an IRA - gold, silver, platinum, and palladium - only two of them garner significant interest: gold and silver.
silver, gold, central bank, recession.
Thursday, 29 February 2024 03:15 PM
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