There clearly has been an elevated amount of volatility in global financial markets recently. As the world attempts to normalise from the Covid shock, stresses in the supply chains has left consumers on both sides of the Atlantic looking at empty store shelves. And, the United States economy is once again at centre-stage with political tension around the US debt ceiling creating market uncertainty. Add to this the still-undefined timetable for tapering and you have currency, commodity and equity volatility.
All the more reason why one should look at either a Gold or Silver-related investment. With this uncertainty, the medium to longer term returns of the metals provides protection against any uncertainties that could threaten the broader global recovery. Even though both Gold and Silver have weakened slightly in recent weeks, the longer-term vision remains sound.
While there is well-documented evidence to support the returns that a Gold bullion investment makes, an investor should not over-look the many options within the Silver market. A recent report from Morgan Stanley highlights the advantages that Silver currently has.
The metal is more tied to the global economic recovery with half of all silver being used in industry and technology. Silver is therefore more closely linked to a global economic recovery than Gold which has a lower industrial-use component.
Secondly, a Silver investment is a hedge against any fall in the US Dollar or rise in inflation. Should the US economy lose momentum or inflation remain stubbornly high, Silver can indeed prove its worth.
Thirdly, Silver is cheaper than Gold and provides a more affordable entry point to metal investing. Just as with Gold, any investment into Silver is also a hedge against the possible devaluation of the Maltan Rand.
All-in-all, both Gold and Silver can have a place as an investment vehicle for diversification and risk. With many investment options open, now may well be the time to look more closely at Silver – especially at the lower price levels recently experienced.
