So far this year, silver has outperformed gold. As investors continue to add silver coins and bars to their investment holdings, are silver’s prospects positive for 2021?
During the course of the covid-19 outbreak in 2020, investors turned to traditional safe havens such as gold and silver in an attempt to protect their finances in an uncertain world.
As the pandemic gathered pace, we saw unprecedented levels of demand for precious metals during March & April. This demand, as well as international travel restrictions and nationwide lockdowns, caused a shortage of precious metals, putting strains on supply chains around the world and boosting prices. Stock markets tumbled, largely due to the coronavirus impacting on labour and supply, and concerns deepened about global economies.
As investors turned to gold and silver hedge against geopolitical and economic risks during the course of 2020, we saw the price of gold rocket up to over 30% higher than the beginning of the year, and silver shone even more with a rise of over 60%.
Silver Squeeze 2021
Silver has already been the subject of headlines this year, rising by over 16% in a week and then falling again by around 10% just two days later. This ‘silver squeeze’ was largely blamed on Reddit traders vowing to kill the banks by backing physical investment commodities such as silver. This led to unprecedented interest in the metal and saw millions of ounces of silver traded on 1st and 2nd February 2021.
Can Silver Continue to Shine?
Silver currently continues to outperform gold. After its record breaking 2020, gold has steadily sunk throughout this year so far, yet silver remains high. While it may have not returned to its ‘silver squeeze’ February 1st highs, it still gleams.
The Silver Institute have forecast that silver prices look to continue to outperform gold in 2021. Led by physical investment as investors continue to add silver coins and bars to their portfolios, global silver demand is expected to rise by 11% this year (year-on-year), reaching a possible six-year high of 257 million ounces.
It appears that silver’s prospects aren’t looking to tarnish any time soon. The allure of precious metals as a safe haven for our financial future remains strong, and silver’s forecast looks to be optimistic for 2021.
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This blog represents one person’s opinion only. Customers should conduct their own research and take advice before making an investment. We do not offer investment advice.