Why invest in silver in 2023?

A powerful asset for the future

Thanks to its growing demand as an industrial metal, silver’s future looks shiny.

Silver’s future appears promising due to its increasing demand as an industrial metal, making it a powerful asset.

Similar to gold, the reasons to invest in silver are manifold, and often, silver’s value is amplified in comparison. What sets silver apart from other precious metals is its expanding demand in industrial applications. Every year, new uses for silver’s unique chemical properties are discovered, spanning from biotech to electronics. Concerns are growing that, within less than 15 years, the available silver supply may be depleted.

The rising demand for silver in various industries, such as medicine and electronics, contributes to its scarcity. Once silver is utilized in industrial processes, its remnants become challenging and costly to extract, particularly from discarded electronic items. Consequently, the market is recognizing that if the supply of silver diminishes to zero, it could become the most precious metal of all. This scarcity factor adds to the attractiveness of physical silver as an investment.

DOWNLOAD INVESTOR GUIDE

Silver is often considered an affordable and undervalued investment, and historical ratios highlight its potential attractiveness.

In Roman times, the gold-to-silver ratio was traditionally around 12/1, indicating that 12 ounces of silver could buy 1 ounce of gold. However, this ratio started fluctuating in the 1900s and has varied widely over the last century, going below 20 and exceeding 100. The ratio’s movements are influenced by shifts in the prices of both commodities. A high gold/silver ratio is often interpreted as an opportune time to buy silver, suggesting that silver is undervalued in comparison to its more expensive counterpart.

As of December 2022, the gold/silver ratio stood at 78:1, implying that silver’s price is significantly undervalued. Analysts and experts argue that silver should be trading at a level five times higher than its current value. The demand for silver is supported by various factors, including industrial uses, investment buying, jewelry, tableware, and photography. Despite economic challenges in 2023, the post-pandemic recovery has contributed to a 16% increase in silver demand in 2022. Silver’s value as a store of wealth, coupled with sustained industrial demand, provides long-term investment assurance.

HOW TO BUY SLIVER

The benefits of silver

Private investment

Physical silver ownership does not require registration, distinguishing it from shares or banking. In contrast to many other forms of private investment, holding physical silver provides a unique level of privacy and autonomy.

To diversify your portfolio

Silver has shown a tendency to increase in value when other commonly held assets experience declines, making it a potential hedge against market downturns. This characteristic is one reason why experts often recommend including precious metals, such as silver, as part of a diversified investment portfolio.

Tax advantages

Individuals purchasing physical silver within the EU are typically subject to VAT. However, The Pure Gold Company offers the advantage of supplying physical silver free from VAT when stored outside the EU. Additionally, silver coins minted by the Royal Mint are exempt from Capital Gains Tax, providing a potential tax advantage for investors.

Universal currency, easy to liquidate

Physical silver holds universal recognition and demand, making it a sought-after commodity worldwide. As a result, it can be exchanged for global currency, goods, or services, and possesses high liquidity, allowing for easy conversion into cash or other assets when needed.

Inheritance & legacy

Historically, over the long term, the value of silver has shown a tendency to increase in alignment with other products and commodities. This characteristic positions silver as a potential hedge against inflation, offering a means of preserving value over time.

Capital growth & returns

Silver has proven to be one of the top-performing UK assets in the 21st century, exhibiting an average annual growth of almost 10% since 2000. In comparison, the FTSE 100 grew just over 4%, and the UK house price index recorded just under 6% annual growth during the same period. This performance underscores the potential attractiveness of silver as an investment over the past two decades.

Sits outside the banking system

Individuals who purchase silver are effectively withdrawing it from the banking system, mitigating potential counterparty risks associated with keeping assets within the financial system. Holding physical silver provides a tangible and direct ownership of the precious metal, reducing dependency on financial intermediaries.