Over the last few months Bleyer has written about the key features of investing in Palladium and Platinum. But there is a third more famous sister to this pair; Silver. In many ways, Silver is more akin to the former pair than to Gold. That’s because Gold is purely an investment metal, bought as bullion and jewellery, whereas Silver is an industrial metal as well as an investment metal, just like Palladium and Platinum.

Bleyer has regularly focussed on writing about the characteristics and advantages of investing in Silver over the years. But it is particularly timely now. Here are some interesting reasons why:

 

1) Analysts say that Silver is positioned to outperform Gold

“When it comes to investing in bullions, Gold has always been the preferred mode on festive occasions. Silver, the poor cousin, always lags behind while Gold takes away all the glitter. But this time, Silver will glitter more. If experts are to be believed, the white metal will outperform Gold in the next year, “Things are looking up for silver. A 20% increase in silver prices is expected compared to about 6% for gold from current levels.” (Business Today)

 

1KG Harraeus Silver Bullion Bar

 

2) October is one of the best months to buy Silver

This is really simple and a wonderful piece of insider knowledge for our clients. Although I researched these figures via Nasdaq – which focuses on paper Silver investing – because the price of Physical Silver bullion is still currently priced at exactly the same value, this gives us crucial historical information regarding the most advantageous months to purchase more physical Silver. “Silver is moving into one of the best seasonal periods during the year, as evidenced by the below chart from Sentimentrader.com.”

 

Graph showing an average monthly performance of Silver from 1973-2007

 

3) A Caveat: Silver price moves are more volatile than Gold

Silver prices tend to be more volatile than those of gold prices. This is succinctly explained by Simon Constable of U.S. Money News: The reason for this is because changes in the supply of silver are less reactive to changes in the price than is the supply of gold. When gold prices fall dramatically, some gold miners will find it less profitable to continue mining and so will stop digging. That lower supply tends to put the brakes on a price fall. That doesn’t happen as much with silver because the metal is often a by-product of mining other metals. Therefore whether the price goes up or down, the supply of the metal doesn’t necessarily change. As the demand for the metal increases, the supply doesn’t move and the price increases.

 

1oz 2017 Silver Krugerrand

  

4) Silver is currently greatly undervalued compared to Gold

The current gold to silver ratio stands at 75, which is close to extremes of 84. This indicates that silver is undervalued as compared to gold and is an early indication that it will outperform gold. It is the right time to buy and invest in silver from a medium to long term perspective,” states Jayant Manglik, President of Religare Securities, India leading Stock and Investment broking platforms. India is the world’s second largest Gold buyer, only (unofficially) surpassed by China. Back in July Seeking Alpha published research entitled “Is India About To Set The Silver Market On Fire?” So, Indian investment opinion regarding Silver is worth following.

 

100oz Silver Baird & Co Bullion Bar

 

5) The correlation between the Gold and Silver price has significantly shifted

In addition, in a separate piece published only yesterday, Seeking Alpha explain that “What many investors don’t understand is that the relationship between gold and silver is not as rock-solid or as closely correlated as many believe. This is because both metals have very different qualities which have separate and distinct influences on their prices. To understand this, it is important to come to grips with silver’s role as a precious metal and its relationship to gold. As the chart shows, silver and gold have both shared a closely correlated relationship, but in recent years, the closeness of that relationship has declined:

 

Graph showing Silver Prices per oz against Gold Prices per oz

 

From this graph it is very clear to see that since the price of Silver was punished in 2011, it has not behaved characteristically in following Gold’s recovery. This adds to the potential forthcoming upswing in Silver comparative to Gold.

 

Bleyer stock a wide range of Silver bars and coins with next day delivery. In addition, the Bleyer team can order many more pieces by working with a variety of refiners and Silver producers to get you the Silver order you want as quickly as possible. Silver is available in bulk cases of coins through to individual bars. Call now on 01769 618618 or sales@bleyer.co.uk to start or increase your physical Silver ownership and investment.

 

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Spot Prices

    Gold£41.19
    Silver£0.53
    Platinum£23.24
    Palladium£48.26