Gold 1734,96
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EURUSD 1,1922
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DJIA 32405,50
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OIL.WTI 64,865
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DAX 14553
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For quite some time, investors have disliked silver because of its high volatility and difficulty in predicting prices. Recent data shows that the time has come to take another look at this metal and evaluate the possibility of allocating it a place in an investment portfolio.
Silver
The price of silver was often boring to watch, as it almost always moved with gold. After the COVID-19 epidemic began, this movement changed. Silver began to trade in a wide range between $23 and $28, while gold began a slow decline until now. It is to be assumed that from 2020 onwards silver will not only be used as a commodity but also as an investment instrument.
Why did this start to happen? More than once we have talked about the huge amounts of dollars now being injected into the economy to stimulate it. Inflation is inevitable. Gold has always been the main saver from inflation, and it has risen rapidly in the last couple of years. But investors are now realising that they can’t put their money in just one instrument. One has to diversify risks. Bitcoin is rising because of this, and interesting things are also happening to the silver market.
Global silver ETF stocks have risen by 331 million ounces over the past year and now stand at 1.04 billion ounces, more than the annual application volume.
Another factor pushing up silver prices is a global production recovery. The Silver Institute is forecasting a 10% increase in industrial demand for physical silver in 2021. Electronics and new technologies such as the introduction of 5G networks should be the main drivers for this growth. The solar energy industry is also gaining momentum worldwide. Solar cells use a fair amount of silver, which is indispensable. Furthermore, we should not forget about electric cars, which continue to grow each year, and which also require a sufficient amount of silver for their production.
Many factors indicate that right now silver is expanding its importance as a trading instrument and is becoming a full-fledged investment asset, which, if skillfully used, can bring good profits.
What’s in store for us today?
13.45 ECB interest rate decision
14.30 Initial Jobless Claims in the US
14.30 ECB press conference
Important Notes on This Publication:
The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice.