Is money worth ( silver ) the ultimate club for global investors? Why should you pay attention to this asset now?

Over the past few years, silver has become a target for many investors seeking new opportunities in the precious metals market. But why should we pay attention to this asset right now? Let’s take a closer look.

Silver is Not an Ancient Metal, but a Technology of the Future

Before diving into numbers and charts, consider what role silver truly plays in our world.

A Long History – Humans have used silver as a form of money and store of value for over 4,000 years, from ancient times to the present. In the 16th century, Spain even cast silver into coins that became widely accepted currencies.

But what’s even more interesting are the scientific properties of silver that no other metal can match:

• Superior electrical and thermal conductivity: Making it essential in all electronic devices
• Reflectivity: Enhances the efficiency of converting sunlight into electricity
• Antibacterial properties: Widely used in medicine and water filtration
• Flexibility: Very important for microelectronics

The result is: silver has become an unavoidable asset in clean energy, electric vehicles, 5G technology, and artificial intelligence.

The Imbalance Between Supply and Demand: This Matters

The current outlook for the silver market is quite intriguing:

Demand side: The reputable World Silver Survey indicates that industrial demand in 2024 will reach a record high of 680.5 million ounces, accounting for nearly 60% of total demand. This growth stems from infrastructure investments and new technologies.

Supply side: Production cannot keep pace. Reasons include difficulties in expanding mining, declining (Stock) inventories, and the fact that silver is often a byproduct of other mining operations.

The situation: The market has been experiencing a “(Deficit)” for several years. Such conditions often drive prices higher.

Why Silver Looks More Attractive Than Gold Right Now

The Gold/Silver Ratio (GSR) indicates how many ounces of silver are needed to buy one ounce of gold.

• Currently, the GSR is around 84:1, much higher than the historical average
• In 2011, during the “golden age” of silver investment, this ratio dropped to just 31:1
• The high GSR now suggests the market has not yet priced in the fundamental factors properly

Implication for investors: Silver is undervalued (Undervalued) relative to gold.

Factors Driving Prices in the Global Market

Macroeconomic factors:

• Central bank interest rate policies – when rates fall, non-yielding assets like precious metals become more attractive
• US dollar – a weaker dollar makes silver cheaper for holders of other currencies, increasing demand
• Inflation – silver is seen as a hedge against currency devaluation

Microeconomic factors:

• Growing industrial demand
• Inflexible production volumes
• Accumulation by investors via ETFs and funds

4 Ways to Enter the Silver Market

( 1. Physical Silver Bullion The traditional method – buying silver bars or coins. The advantage is actual ownership, but the downsides are high capital requirements and the need for secure storage.

) 2. Mutual Funds and Mining Stocks Investing through funds that focus on silver mining companies worldwide. Benefits include high liquidity, but there are company-specific risks.

3. Futures Contracts

For experienced investors, suitable for short- to medium-term speculation, but with high risk.

4. CFD Contracts ###Contract for Difference###

An increasingly popular trading method, requiring less initial capital, allowing profit from both rising and falling markets, with high liquidity and no storage costs. Suitable for retail investors and speculators.

Opportunities and Risks to Know

Opportunities:

• Higher potential returns than gold due to greater volatility
• Long-term demand driven by technological transition is certain
• Low per-unit price makes it accessible
• Acts as an inflation hedge

Risks:

• High price volatility can cause rapid losses
• Sensitive to economic conditions, as industrial demand fluctuates
• No interest income; profits come solely from price differences

Summary

Silver has become a key asset in the era of technology and clean energy. The market’s persistent (Deficit), high GSR, and strong industrial demand create a promising environment for investors.

However, remember that investing in silver is most suitable for those who can tolerate a certain level of risk and have a medium- to long-term outlook. Regardless of the method you choose, understanding the asset you invest in and having a clear plan are essential.