June 15, 2024

Most investors who find themselves having to choose the best precious metal to buy as an investment always get presented with two options: gold and silver. A lot will gravitate towards gold because it has a higher value but what about silver, why should anyone consider buying silver bullion?

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There are some great and compelling reasons why anyone should want to buy silver bullion Brisbane.

#1. It is money

Like gold, silver has real monetary value. Unlike conventional fiat currency, silver’s value does not depreciate.

Silver has no counterparty risk

When you buy silver bullion Brisbane, you need some other party to make good on a promise as is the case with other types of investments like stocks and bonds. 

There is no risk of defaulting when you hold physical silver bullion.

Silver has been used in coinage longer and more often than gold has. 

#2. Silver is a hard, tangible asset

In the world of stocks, paper and digital trading, currency creation precious metals like silver stand in stark contrast because you can literally hold silver in your hand and carry it around in your pocket.

#3. Silver is Cheap

Silver is much more affordable than gold. It is 1/80th the price of gold and it will still protect you well in a crisis.

#4. It is practical

Silver isn’t only cheaper but it is more practical when it comes time to sell. Silver comes in smaller denominations compared to gold. You can sell small amounts of silver to meet your immediate needs.

#5. Silver’s Industrial use is growing

Silver is used in most major industries. You can find silver in most things from electronics, batteries, solar panels to medical equipment.  This is because of its electrical and thermal conductivity. The demand for silver is always growing. Unlike gold which can be recycled, most industrial silver is either consumed or destroyed in the fabrication process. This means the amount is always diminishing. This could be a problem because supply is falling. 

The price of silver crashed after peaking in April 2011. It fell by a massive 72.1% in five years and miners had to find ways to cut the cost of mining and the biggest cuts were made in the exploration and development of new mines. If miners aren’t finding new mines to get silver from then that means everyone is relying on existing mines to meet growing silver demands. Soon the consequences of increasing demand and diminishing supply will come into play but these will be positive consequences if you own silver.

Precious metal investors always consider the Gold/Silver Ratio. It gives us an idea of which metal to buy at any given point. In the 20th century, the gold/silver ratio averaged 47/1 and in the 21st century it averaged 61/1. A ratio that lies above 70 is good for silver however at the peak of the 2011 bull market, the ratio dropped to 30. But that isn’t the lowest it has been. In 1980 it was 17. Such a compression shows how much silver can outperform gold.

It’s not easy to find an asset which isn’t just a good hedge whose price will be forced to go up by fundamental factors coming into a perfect storm. Silver might just be the underrated, undervalued metal of the last decade that you should definitely consider investing in.