What Are the Market Trends and Future Prospects for Silver in the Next Five Years?
The global disorder during the Covid situation has affected investments and the US Dollar’s value. But safer assets like silver proved to be quite resilient against all the odds. Investors started to buy silver bullion and protect their finances.
With minor dips last year, silver is on the rise again for the past six months. In the last quarter of 2020, the shiny metal was valued lower than $18. In 2021, the market saw the value of silver touch a contrasting high of $30.
Future Prospects for Silver
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What are silver predictions for this year and the next five years to come? Is it a good investment? Here is the forecast based on key factors:
Silver has a comparatively smaller market when compared to gold. Therefore, trading activities will influence the cost drastically. When predicting the price and trends of silver, it is vital to consider these extreme oscillations.
One of the biggest misconceptions about silver is that it is a typically bullish market. The truth is that silver is usually neutral or bearish. So, the upcoming bullish trend is a very new scenario.
Covid-19 and Diminished Mining Activities
A leading factor that can influence the value of silver is the Covid 19 crisis. Social distancing and lockdown safety measures can hinder mining activities. Countries with stricter regulations, especially the silver-producing nations, will have a massive impact on the price.
It is common knowledge that a lesser circulation amount always leads to a spike in prices. The restricted supply in the market due to fewer mining activities will increase silver’s value.
Green Policies and the US Government
Green technology involves the production of clean and sustainable energy using environmentally friendly practices. The market is young but investors are turning their heads towards green technology because of the global climate crisis and the need for cleaner energy sources.
Green-tech aims to reverse the damage caused to the earth by human activities. The new US Government under Biden has laid out some green policies that encourage the production of alternative energy and reduce the consumption of fossil fuels.
Believe it or not, silver is one of the main characters in green tech because of its conductive properties. The drastic increase in demand for the metal will help push forward its price.
Increase in Investment Demand
The pandemic caused chaos all over the world as the stock market crashed and businesses faced closure. Investors with a safer portfolio could withstand the turmoil because of assets like gold and silver bullion. Even if the prices of these metals swing up and down, they regain stability after a while.
The crisis brought the spotlight on usually neglected assets like silver and created an increase in investor demand. As investors’ interest and curiosity in the grey metal rise, there is a bullish prediction for the silver market.
It will draw some time for the market to recover from the economic crunch, with demand for jewellery and silverware not yet at its highest point. But a majority of the leading analysts have predicted a bullish market for 2021 and the upcoming five years. The trends will lead to more investors using their resources to buy silver bullion to benefit from the price spike.