3 Reasons the Silver Price Could Soar

The performance of gold in recent weeks has been great for gold owners, with gold hitting new record highs. But for silver owners things haven’t been nearly so good.

Normally when gold enters a bull market, silver does too. But while silver performed well earlier this year after the bank failures, it’s not matching gold’s performance right now. Is that cause for concern?

On the one hand, this isn’t necessarily unusual. Look back at the 2008 financial crisis, when gold gained 25% during the same period that markets lost more than 50% (October 2007 to March 2009).

Silver didn’t match gold’s performance during that period, but it went on to outperform gold between 2008 and 2011. So a temporary divergence in the performance of silver and gold isn’t necessarily a cause for worry.

Besides, there are numerous trends in the silver market that could help drive the silver price higher. Here are three reasons the silver price could end up soaring.

1. New Technological Developments

Unlike gold, silver normally sees about half of its demand coming from industry. A growing portion of industrial demand today is coming from the photovoltaic industry, as silver is a vital component in the manufacturing of solar panels.

With solar panels in great demand worldwide as the push for green energy increases, silver demand from the solar industry has been growing by leaps and bounds. But solar panels aren’t the only modern use for silver.

Fuel cell technology is also growing significantly each year, and silver could play a large role in making fuel cell technology affordable enough for mainstream use. Right now researchers have successfully replaced the expensive platinum catalysts with silver, enabling hydrogen fuel cells to be produced much cheaper.

With growing demand for vehicles that don’t pollute with emissions, particularly in large urban areas, fuel cell technology could become the next big thing. If that happens, and if fuel cell demand increases as much as some people think it could, silver demand from that sector of industry could increase exponentially.

2. Silver Shortage

Another aspect of silver that could lead to price increases is the fact that silver is in short supply. Nearly three-quarters of silver production comes as a byproduct of mining for other metals, such as nickel, zinc, or lead.

Mining production, although projected to increase in 2023, is still lower than it was a few years ago. And even though overall silver supply has increased, silver demand has increased faster.

The past few years have seen a switch from supply outstripping demand to demand outstripping supply. Demand was over 200 million ounces greater than supply last year, and is projected to be over 140 million ounces greater than supply this year.

At some point those supply imbalances will have to reflect themselves in higher prices, as such an imbalance can’t go on forever. At some point, above ground stores of silver will be depleted if demand continues to outstrip supply, unless the price of silver rises to equilibrate supply and demand.

3. Investment Demand

The final major driver behind the potential increase in the silver price is sustained investment demand. Investment demand for silver has increased substantially since 2020, and is now about 50% higher than it was back then.

Because silver often acts as a safe haven asset and store of value, just like gold, demand for silver tends to increase during times of financial turmoil. Since we haven’t even entered recession yet, the fact that silver demand is already high would seem to indicate that silver demand could increase even more once a recession occurs.

If silver demand remains elevated in the coming years, it could contribute to overall elevated silver demand and help boost the silver price. In the aftermath of the 2008 recession, for instance, the silver price more than quintupled in price from its 2008 lows.

With the likelihood of recession growing all the time, that could boost demand for silver, which could further impact the silver price.

Is This Silver’s Time to Shine?

While silver’s performance this year may have been disappointing to many silver owners, there’s a silver lining. Just like silver recovered from a disappointing 2008 to outperform gold in the subsequent years, silver could very well repeat that performance during the next financial crisis.

With gold already leading the way and setting all-time highs even before a recession has occurred, there’s every indication that gold could lead precious metals into another strong bull market. And where gold leads, silver very often follows.

If silver outperforms gold during the next recession just like it did in the aftermath of 2008, then owning silver could end up being even more beneficial than owning gold. But that would mean stocking up on silver before its big breakout.

If there’s one thing that can be said about the next recession, it’s that it is incredibly slow in coming on. Millions of Americans have been anticipating it for a while, and numerous indicators point to recession on the way.

But in the meantime, since recession hasn’t yet begun, that gives you plenty of time to prepare for it and to protect you against recession-related losses. Buying some silver could be one way to do that.

Numerous Americans have already protecting their hard-earned savings with silver, and one increasingly popular option of doing that is through a silver IRA. A silver IRA is just like any other IRA except that it holds physical silver coins and bars rather than conventional financial instruments.

A silver IRA offers all the same tax advantages as any other IRA, along with all the benefits of owning physical silver. And you can fund a silver IRA with a tax-free rollover from your existing 401(k), 403(b), TSP, IRA, or similar retirement accounts.

If you’re worried about the effect recession could have on your wealth, maybe now is the time to start thinking about silver. With thousands of satisfied customers and over $2 billion in precious metals placements, Goldco has helped numerous people just like you benefit from owning silver.

Call Goldco today to learn more about how silver can help you safeguard your financial future.