Is Silver Becoming a Good Long-Term Investment?

By Staff Writer / March 13, 2021 / Article Link

With gold cooling off after peaking in 2020, investors are turning towards silver and mining stocks of silver miners as a long-term game plan.

Silver has been reacting to the raw demand that’s filling its pipeline. For this reason, The Silver Institute forecasts global silver demand to rise by 11% in 2021 to reach an eight-year high. As the industrial demand is nearing a four-year high of 510 million ounces, increasing by 9% over 2020, this is expected to lead the push.

Amid a global crypto frenzy, we’re seeing a new wave of 'silver holders’ coming to the scene and the potential ROI is tremendous. With silver being in a long-term bull market, there is plenty of opportunity for trading silver stocks that are cheap now when their price goes up later.

Increased adoption of renewable energy sources is opening a new, fast-growing end market for silver. The expected influx of cash to the renewable energy industry following Biden’s victory in the U.S. Presidential elections will likely continue to benefit silver prices. Analysts are growing bullish on the white metal and silver stocks are benefiting as a result.

Many analysts point out that if silver was going to crash, it would have done so by now. However, it has been rangebound and par for the course. This means that investors have every reason to expect more of it, not less. After the gold to silver ratio peaked at an all-time record high near 125 last March, it appears to have marked a turning point.”

The outlook is encouraging, and that could lure more investors to silver bullion and silver stocks.

Silver miners involved in every stage of silver production, from exploration to refining, are currently well positioned to benefit from soaring production. Prospects for some mining stocks are better than others due to the miners’ project portfolio and balance sheet. For silver stocks, experts are looking towards Pan American Silver (PAAS) and Fresnillo (FRES:LSE) , the world's largest silver mining company, which is listed in London. Other major players include Endeavor Silver Corp. (EXK) and Fortuna Silver Mines (FSM).

What form of silver to invest in depends on several factors, including your tolerance for risk and desire for convenience and appreciation. Owning silver bullion is the most direct, purest play. However, it comes with the problem of storage and illiquidity. This is why most investors turn towards silver stocks and silver ETFs as a more economical way to achieve appreciation.