One of the issues facing the purchase of any sort of asset is the uncertainty of its price. Every purchaser or investor hopes to buy low and sell high, but it doesn’t always work out that way. And that’s why investors try to do as much research as they can before they buy.
That’s no different when it comes to buying gold and silver. Precious metals face price fluctuations over time, even if their general trend has been to rise in price over the decades. And even investors who trust that precious metals like silver and gold will rise in price in the future want to ensure that those price increases take place over the course of their investing time horizon.
Right now silver is in position to increase in price as demand for silver is increasing from all sides. The long-term potential for silver to increase in price is rising, and the price could very well set all-time highs in the coming years.
Right now there are three primary drivers behind silver’s potential rise in price: industrial demand, photovoltaic demand, and investor demand.
1.) Industrial Demand
Unlike gold, much of silver’s demand normally comes from industrial demand. Silver has had a long history as an industrial metal, and was formerly used heavily in the photographic industry in the production of film for cameras.
That use of silver has naturally fallen away as digital cameras have taken over, but silver nonetheless remains in heavy use in numerous industries. In particular silver’s electrical conductivity makes it a popular metal for use in electronics. Silver is used in electronics as small as RFID tags, and its use in electronics is forecast to grow into the future.
Overall, industrial demand (excluding use in the photovoltaic industry) is expected to rise at least 10% by 2025. That would push overall silver demand to over 245 million ounces each year, exceeding previous recent highs.
2.) Photovoltaic Demand
Silver is the primary metal responsible for the production of electricity in solar panels. Silver currently makes up around 10% of the cost of solar panels, but without that silver the panels cannot be made.
Solar panel manufacturers are trying to reduce the amount of silver in each panel in order to reduce costs. At some point in the near future, solar panels may only use 20% as much silver as they did just a few years ago. But despite that, demand for solar energy is growing so much that overall silver demand from the photovoltaic industry continues to rise.
Silver demand from the photovoltaic industry could very well become the dominant source of industrial silver demand in the coming years. With California mandating solar panels for all new single family homes, and with pushes for more green energy all around the world, things are looking up for silver’s future.
3.) Investor Demand
Silver demand from investors tends to fluctuate. During times of relative economic calm, demand remains stable but doesn’t dominate overall demand for silver. But when the economy begins to show signs of weakness, investor demand for silver can pick up dramatically.
We saw this last year, as collapsing stock markets and a locked down economy led investors to flock to precious metals, including silver. Investor demand for silver skyrocketed, and it hasn’t let up. Silver prices remain far higher than they were before the pandemic, and with continuing high inflation, supply chain issues, and shortages of crucial goods and commodities, the outlook for the economy doesn't look too good.
That should play into the hands of silver bulls, as a weakening economy often translates into higher silver prices. During the 1970s, for instance, silver prices rose at an annualized rate of over 30% for the decade. And in the aftermath of the 2008 financial crisis, silver more than quintupled in price.
It’s not unreasonable to expect that silver could eclipse its all-time high during the next bout of economic weakness. And that could very well be only the beginning for a sustained long-term rise in the silver price.
Taking Advantage of Silver Price Growth
Buying low and selling high means getting in before prices take off. For investors who bought silver a few years ago when it was only $15 an ounce, they have already reaped some of the rewards of their foresight when it comes to the silver price. But they could see even greater gains in the future, as could those who buy silver today if silver lives up to expectations.
When it comes to buying silver, however, it’s important to work with people you can trust. That’s especially true if you’re using portions of your retirement savings to buy silver. The last thing you want to do is invest thousands or tens of thousands of dollars into silver without knowing who you’re buying from or what you’re getting.
At Goldco, we have helped thousands of investors just like you benefit from buying silver. With over a decade of experience in the precious metals industry, our numerous satisfied customers speak to our devotion to customer service.
Goldco offers you the ability to buy silver coins or bars produced by mints around the world, guaranteed to be authentic. We work with trusted custodians and depositories so that if you’re investing in silver through a silver IRA and funding your purchase with assets from your retirement accounts, your retirement savings remains safe and secure once you’ve converted them into silver.
If you would rather make direct purchases of silver coins or bars, we can also offer secure storage options for your silver. And if you prefer to take possession of your coins yourself, we offer secure shipping to ensure that your silver gets to you safely and securely.
No matter which silver product you choose, Goldco’s precious metals experts can help you through the process and answer any questions you may have. Buying silver shouldn’t be difficult, so our representatives do everything within their power to ease the process for you.
Don’t let your savings remain at risk of the whims of Wall Street, or at risk of devaluation in the face of high inflation. Contact Goldco’s experts today and learn more about how silver can safeguard your savings.
Trevor Gerszt is founder and CEO of Goldco Precious Metals, a privately held retirement services firm in Los Angeles specializing in wealth and asset protection. Offering a range of investment accounts including traditional, self-directed and Self Storage IRAs; as well as IRA rollovers, Goldco has been named the #1 gold IRA provider in the U.S. by Inc. 500.
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