Like gold, silver too was or rather is, a monetary metal, and thus, similarly, we find ourselves buying silver bullion bars to secure our future from any economic instability. The British Pound derives its name from a pound of nearly pure or ‘sterling silver’ with a purity of 92.5%.
While people invariably talk about buying gold bullion bars, the importance of buying silver sometimes gets undermined. But that should not be the case.
Monetization of Silver
Sir Issac Newton was appointed the ‘Master of the Royal Mint’ who monetized silver in the 18th century which continued to be used until 1873, and as economist Milton Friedman said the “major monetary metal throughout history is silver, not gold.”
As mentioned before, silver, like gold bullion bars has an intrinsic value and was accepted as a form of money for thousands of years, across the globe. Even after many years, silver, due to its inherent value, can be exchanged at high prices.
Unique features of silver
Silver has some unique features, such as:
- They are malleable.
- Silver is great conductor of heat and electricity.
- They are resistant to corrosion.
These above-mentioned features rise their industrial demands. Silver is used in little amounts in electronic devices (great conductor of electricity) and can be less economical to recycle.
Silver as an asset against inflation
Buying silver, and selling when in need, like gold, acts as a hedge against inflation and helps in portfolio diversification to safeguard yourself from monetary and geopolitical turmoil. Along with many academic pieces of research and journals,
According to their suggestion, portfolios can reduce the market risks, with improved returns, if one owns 7-15% allocation in these three precious metals.
Silver, the affordable metal
Silver happens to be an easier buy, in terms of affordability which helps small investors to invest in more amount of silver, as compared to gold. So, if you have some little money and you want to invest, try to buy and sell silver bars.
In a Bull market, silver prices increase more than gold prices
History says that the prices of silver bullion bars are more volatile than gold prices. While studies show that in the 1970s, the silver price rose 3800% as compared to the 2500% of gold, in the bull markets. Experts predict that in the future too, silver is likely to outperform gold.
The gold to silver ratio is in favor of silver
To define simply, the gold to silver ratio is the proportion between the spot prices of gold and silver.
The current ratio (September 2021), is around 72 to 45, which means it takes 72 ounces of silver to buy 45 ounces of gold.
The gold to silver ratio, a few months back, peaked at a probable all-time high, over 124 to 0.91 during mid-march 2020.
But this isn’t a fixed ratio and tends to change regularly. The changes depend upon the current/latest spot price of silver and gold.
Thus, while everybody talks about buying gold bullion bars, a fine stock of silver bars also deserves a much-needed discussion. As it plays an equally important role in providing a secured future when the times are not so bright.
