Silver is ‘the best trade’

It’s sporadic but prices could hit $60 this year, says ex-JP Morgan MD

After receiving a wave of retail attention earlier this year and briefly trading above $30 an ounce, silver’s mainstream media coverage is fading. But keen investors are still buying up the physical metal, which is a sign that the physical silver squeeze is far from over, according to Deane.

“Short-term, silver is your best trade. There is a lack of silver around the world. There is not much silver at any refineries and getting your hands on physical silver is still difficult. There is a risk of a real silver squeeze this year,” Deane told Kitco News.

This year, silver is also a good leverage play on gold considering the supply issues as well as the climate change angle, which is why the precious metal is likely to outperform gold this year.

Deane does not rule out silver hitting $60 sometime this year. “Silver could trade $40-$50 and potentially $60 this year,” he said.

At the time of writing, March Comex silver futures were trading at $26.69, up 0.18% on the day.

It is important to remember that silver is a highly volatile metal, and even if it does reach $60 this year, it doesn’t mean it will end the year there. “It is a sporadic, high volume trade. This is just a prediction on where it might trade this year rather than where it will end 2021,” Deane said.

Advice on how best to invest, Deane said to own physical. “Owning physical or SLV is how I would do it.”

When it comes to gold, Deane still sees new highs this year, with the range varying from mid-to-low $2,000 to $2,200. At the time of writing, April Comex gold futures were trading at $1,735.50, up 0.73% on the day.

Other solid performers for this year include iron ore, aluminum, and copper. “Copper is a very good benchmark for China,” he said.

Going forward, the approach to COVID will be based on a nation-to-nation basis, which would create travel bubbles and could trigger further supply-chain problems for the metals, Deane added.

‘Monetary policy is broken’

The catalyst that will finally boost silver and gold substantially higher this year is a weaker U.S. dollar. This could happen later in the year if the economic recovery slows and inflation continues to rise.

“Silver and gold need a weaker dollar,” Deane said. “If we see deteriorating economic conditions while inflation continues to move higher, the Fed wouldn’t be able to move rates higher. And by leaving rates low and inflation high, we could get a much weaker dollar and much higher metals prices.”

The COVID-19 pandemic was a catalyst for inflation as it accelerated the amount of debt that the governments around the world had created.

“Before the pandemic, we already had low interest rates around the world. When the pandemic hit, and we got severe economic conditions, it accelerated monetary policy to zero. When you have such a large debt burden, it is difficult to raise rates again. How do you raise rates when you are trying to stimulate the economy?” Deane said. “Monetary policy is broken. It is no longer effective.”

The markets are already sensing signs of trouble as investors digest the sharp rise in the U.S. 10-year Treasury yields, Deane pointed out.

“The U.S. government will struggle to use monetary policy. We are already in a scenario where we see high unemployment. When stimulus dries up, things will get worse,” he said. “At the same time, more money coming into the economy now is inflationary. We are starting to see asset price inflation.”

Another new development to watch this year is the de-centralized way new investors are educating themselves. “This is going to become more prevalent in the years to come,” Deane noted. “We’ve got a lot of retail hunters sitting at home and trading. People are doing more homework now and seeing which asset classes are underpriced.”

4 Reasons to buy Silver

There are probably only a small percentage of investors today who could answer this question correctly: “Which precious metal gained nearly 50% in value in 2020?” Most investors would go with what seems to be the obvious choice, gold. But they would be wrong, because gold gained “only” 25%. The correct answer is silver.

Silver doesn’t get the attention that gold does, which in some ways is understandable. Gold is flashy, it’s valuable, and it has unique characteristics that have made it a phenomenal monetary metal for centuries. But all that glitters is not gold. And when it comes to investing your money, investing in silver could provide superior results.

Investing in silver isn’t the same as investing in gold, as the two metals, despite both being favored as safe havens and hedges by investors, have some pretty significant differences when it comes to supply, demand, and price growth. And when it comes to price growth during bull markets, silver can often outperform gold.

Those who know that can take advantage of the opportunity to buy silver when it is undervalued, allowing them not only to diversify their portfolios but also to enhance their gains. If you aren’t already familiar with silver and want to learn more about investing in silver, here are four reasons you might want to think about buying silver today.

1. Increasing Demand

Silver demand has surged in recent months for a number of reasons. For one thing, more investors are realizing that the economy remains weak, that stock markets remain overvalued, and that a major market correction is coming. And they know that silver is likely to rise in price once that correction occurs.

That has led to a surge in demand for silver that is pushing silver markets to their breaking point. The price of silver has risen tremendously over the past year, with silver’s price gains in 2020 nearly doubling those of gold. And with silver still well under its all-time highs, the price growth potential for silver remains greater than that of gold.

The recent kerfuffle as a result of the Gamestop short squeeze, and the attention that placed on the silver market, has led even more investors to take an interest in silver. Prices increased, premiums on silver coins continued to rise, and silver got more attention than it has in years. And all of this could just be the beginning, as the next few years could see silver enter a phenomenal bull market.

2. Physical Shortages

Silver has always been a metal rumored to be on the verge of a shortage. Now, the rumors could be coming true.

Silver is both an industrial metal and an investment asset, and the sources of above-ground silver can’t always satisfy both uses. A box of 1000 one-ounce silver coins isn’t going to be the ideal silver for an industrial user, and a massive raw silver ingot isn’t going to do a retail investor any good. So, the form of silver available on the market matters, particularly to investors.

If you’re going to invest in physical silver, that’s going to come either in the form of silver coins or silver bars. And with rising demand for those silver coins and bars, supply has to keep up.

Mints, assayers, and refiners that produce silver coins and bars have to have access to silver in order to produce their coins. And the US Mint is already indicating that it may not be able to meet the surge in demand that has occurred, as it just can’t source enough silver. As a result, the Mint is cutting back on allocations of coins, and there’s no telling when that might ease up.

It’s not too much of a stretch to imagine that mints around the world are facing the same predicament, as surging silver demand and low stocks of silver in warehouses will combine to cause shortages of physical silver coins this year. If you were hoping to buy silver coins this year, you had better hope that there are coins available for you to buy.

As it is, premiums on silver coins have been surging, with many investors so desperate to buy silver that they’re prepared to pay well over the spot price to get their hands-on silver coins. The last time this happened, it was shortly before silver went on a tear and reached nearly $50 an ounce. Does that mean we’re on the verge of a silver breakout to a new all-time high? It could very well be. Certainly, if people are willing to pay double the spot price of silver, it would indicate that spot prices should eventually catch up to those levels.

3. Commodities Supercycle

Silver, while an important investment asset and industrial metal, is still just one of many commodities. And as commodities analysts are beginning to notice, the massive amounts of money being created by central banks around the world are beginning to fuel a rally in commodities prices that they believe could be indicative of a coming commodities supercycle, with metals, oil, and agricultural commodities all rising in price in unison.

The commodities supercycle, combined with the other factors driving the silver price, could help push silver to new highs in the coming years. And with continued loose monetary policy from central banks likely to continue for years to come, the commodities supercycle could last a lot longer than many people anticipate, helping keep the silver price elevated for some time.

4. Tangible Asset

If you look at the average investor’s portfolio, how much of their investments are in actual tangible investments? Likely not very much. From the money in your bank account to the stocks and bonds in your mutual funds or retirement accounts, just about every asset most investors own is held electronically.

Investing in silver, such as through a silver IRA, means actually owning silver coins or bars that you can touch and hold. Your ownership of silver isn’t a mere electronic certificate, it’s actual ownership of physical silver. And if you take a distribution from a silver IRA, you can choose whether you want that distribution paid in cash or in physical metal.

The ephemeral nature of many financial assets, such as stocks and bonds, worries many investors. They can lose all of their value in an instant if the company that issues them goes out of business. But silver doesn’t go out of business, it doesn’t go bankrupt, and at the end of the day an ounce of silver remains an ounce of silver, just as it has for centuries. That’s why so many investors have trusted silver to help protect their wealth.

How You Can Invest in Silver

One of the common reasons’ investors look to protect their wealth is to ensure that they have sufficient assets and income in retirement. Many may want to protect their retirement savings with silver, but they don’t know how. Thankfully, it doesn’t have to be that difficult.

With a silver IRA from Goldco, you can enjoy the benefits of investing in physical silver while still maintaining the tax advantages of a normal IRA account. You can even roll over or transfer existing assets from a 401(k), IRA, TSP, or similar retirement account, without tax consequences. That allows you to protect the investment gains you’ve already made and put yourself in a position to benefit from future silver price gains.

If you’re looking to invest part of your retirement savings in silver but don’t know how, or if you want to learn more about investing in silver, contact the experts at Goldco today. Goldco’s experienced representatives have helped thousands of investors just like you get started in investing in silver. Don’t let another day go by without protecting your retirement savings. Call Goldco today.

Trevor Gerszt is America’s Gold IRA Expert, CEO of Goldco Precious Metals, and holds a position on the Los Angeles board of the Better Business Bureau.© 2021 Newsmax Finance. All rights reserved.