All tough times have a silver lining and this year’s COVID pandemic is no exception. Ironically, this time silver is the actual silver lining.

 As COVID remains a global challenge that’s still affecting economies negatively, all eyes are on silver. It’s interesting and exciting to watch silver moving up the charts, while many other reputable assets and stocks plummet.

 Even though silver has made significant gains in the past, it is during this pandemic that we are witnessing this white metal outpace gold really fast. Why is that?

Well, there are many reasons for the price of a currency, metal, or stock to move, and the reasons can be primary or secondary. There are three primary reasons among several other secondary reasons that the price of silver is moving up in an unprecedented way. Let’s take a look at them.

#1 Gold Is Too Hot

The price of gold has risen like never before which has made it unaffordable for a large section of investors. So those who were investing or trading in gold are now finding it more profitable to switch to silver. Investing in silver during the COVID period has actually rewarded them by giving them more than double their returns.

As you can see from the chart, the price of gold is at an all-time high which makes it highly unaffordable for most people.

#2 Geopolitical Fears

Geopolitical factors have historically affected the prices of assets, a war especially can send an economy 10 years backward. What’s happening now is an increased tension between China and the US which makes people uneasy. The fear of a clash between the two countries which can potentially collapse the US dollar makes investors lose their trust in the USD as a safe-haven. This usually makes them turn to gold, but gold being at an all-time-high makes them turn to the second and more affordable alternative; silver.  

#3 Market Volatility

With COVID cases increasing and no effective solution in sight, investors and traders alike have started becoming concerned about market volatility. The growth rate of the economies around the world is not promising either. So, people are showing more preference for metals, as they are less volatile and have maintained a constant trend. 

Another influencing factor is that the governments in the west continue to print currency and take debt loads. This will increase the price of gold which will drag the price of silver along with it.

Besides all these factors, the scope of utility for silver is wider than gold with an increasing demand for silver in the industrial section as it’s being used for solar panels, electric cars, and more.

Look at this chart that shows the value of silver going up.

As you can see, silver has not yet reached its all-time high compared to its royal counterpart. And you may already know that gold and silver prices tend to move together. This means that there is a possibility for silver to move further up even by around 50%, and we can consider any price action signals like pinbars during a pullback. So, it may be a wise move to place your bet on silver.

To conclude, silver is hot now. Its production has dropped making a rare commodity, its necessity is increasing by the day, this makes a great combination for a bright future. If you haven’t considered adding silver to your investment portfolio yet, maybe it’s time you do. Grab this golden opportunity and learn more about the fortune-changing white metal. There’s a chance that the price of silver will shoot up and reach three-digit figures in the near future.


About Author

Mithun Girishan is the founder of MMM (Mithun’s Money Market), a consulting firm providing quality training programs in capital markets. He is an investor, trader, coach and a continuous learner. In addition, Mithun provides consultation and mentorship to many retail investors and company directors across the globe for investments, trading and hedging their wealth in stocks and futures. His passion lies in exploring new avenues in financial markets as well as learning theoretical and practical economics and its application in daily lives. This has exposed him to a wide range of markets spanning from equity, commodity, forex, futures to options.

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