For thousands of years, gold and silver have been recognised as prize assets to own. This notion has not changed, even in this modern era, as we see more and more new investors flocking to precious metals every day. So, why are investors choosing to buy physical gold and silver bullion right now?
People traditionally turn to gold in times of economic uncertainty, instability, and when there is low confidence in the banking system. Investors hold physical gold bars and coins to help provide ultimate control over their own wealth and as a timeless safeguard against financial crisis.
The coronavirus crisis over the last year has been a perfect example of this. As the Covid-19 pandemic took hold across the world during 2020, we watched the world’s economy thrown into turmoil. Many industries took large hits due to lockdowns and travel restrictions, and global stock markets crashed. However, the gold and silver market boomed, and we have seen thousands of new customers flock to buy coins and bars as a safe haven to protect their financial futures.
Silver Is Shining
So far this year, silver has outperformed its old friend gold. This time last year, silver was hitting a price of around £11.85 per oz, rising significantly through April-August, and now sits at over £18.30 per oz. That’s a substantial rise of around 55% in one year alone.
Silver has also been the subject of headlines this year, due to the ‘silver squeeze’. Rising by over 16% in a week during February, and then falling again by 10% just two days later, this was largely blamed on Reddit traders who vowed to kill banks by backing physical commodities such as silver. This led to an unprecedented interest in the metal and millions of ounces traded in the first two days of February alone.
While silver may not have returned to its ‘silver squeeze’ highs of February, it still rides high. As investors continue to add silver coins and bars to their portfolios to hedge against the ongoing financial disruption caused by the pandemic, inflation fears and recession concerns mean that global demand is expected to rise even further which will most probably see silver shine even brighter in the months to come.
Gold’s Upward Trend
Gold was one of the best performing assets in the world throughout last year. Smashing all price records again and again, gold trading thrived whilst many other industries took large hits due to Covid-19. The surge in demand as investors turned to gold as a safe haven even saw shortages for many dealers and refineries, as investors clamoured to buy gold faster than it could be bought in.
This time last year, gold had risen to around £1,300 per oz due to the first lockdowns. The price continued to rise, smashing through the ceiling at over £1,575 in August before a steady decline. The gold price is now hovering around the same point as it was at this time last year, which may not be the crazy highs of last summer - but gold hasn’t lost its gleam yet! Gold may have had a crazy year, but there’s also evidence of a long-term upward trend. The last ten years has seen the annual price of gold pretty much double.
With the fear of economic uncertainty still looming over us due to the fallout from the pandemic, the demand for gold coins and bars is still incredibly high at the moment. Analysts have also suggested a rise in inflation within the next few months, which will most probably have a significantly large influence over gold.
With so much still happening in the world right now, we watch as the fallout from the last year happens around us – our eyes fixed on those precious metals and where they might go.
This last year has seen people flock to buy gold and silver like never before due to global uncertainty, and long-term trends appear to be up. People have put their trust in precious metals for thousands of years and continue to do so even in these modern times of technology for a reason: gold and silver are real. Tangible assets you can really own. You can see it and hold it in your hands. Precious metals are a currency that have proven themselves time and time again as a way to protect our families’ finances and future against the unknown.
Seeing so many people turn to the gold and silver market over these past few months, and continue to do so, leads us to think that we may just say we told you so!
For a more in-depth discussion on this subject, listen to our podcast here.
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.