The price of gold continues to be the headline winner these days. As tensions rise in the Middle East, inflation remains high, and interest rates also remain high, many continue to seek out the metal as a hedge against inflation and economic uncertainty.
However, another metal is doing just as well and could surely climb even higher—and that’s silver.
What happened?
Silver has been rising for many of the same reasons as gold. Geopolitical tensions create uncertainties about the market, and this can drive investors to seek out safe-haven assets. And that includes silver.
Silver is often seen however as a more affordable alternative to gold. If the price of gold goes up, it can make silver look more attractive to investors, which can increase demand and drive up the price. Some investors see silver as a way to protect their wealth from inflation, which is the rising cost of goods and services. The idea is that the value of silver will go up as the value of the currency goes down.
One key difference
There is a reason that Warren Buffett does not invest in gold. The Oracle of Omaha has always stated that gold doesn’t do anything. It’s not useful, and so the price is really just dependent on what’s going on in the world, not its demand.
Meanwhile, silver is both a precious metal and an industrial metal. This means it’s used for investment purposes, like a safe-haven asset during economic uncertainty, but also in manufacturing for things like solar panels and electronics. So, a rise in either industrial demand or investment demand can push prices up.
And that demand has continued to rise for many reasons. The uses of silver are many, but they are also expanding. As mentioned, renewable energy assets and tech sources need the metal. So, as demand climbs, so too will the price.
How to invest
Now, of course, you don’t have to go out and buy a bar of silver to get invested. Instead, you can simply invest in an exchange-traded fund (ETF) that tracks the price of silver. There are many options, but one with a low cost and high liquidity I would consider is iShares Silver Bullion ETF (TSX: SVR).
This ETF is the largest silver ETF available on the TSX. It provides direct exposure to the price movements of silver by holding physical silver bars in trust. This makes it a good option for investors who want a simple and efficient way to invest in silver.
Shares of the ETF are already up 18% year to date as of writing. Yet as the price of silver climbs higher, which it should, so too should this ETF. What’s more, over time we’ve seen that the share price continues to climb higher rather than fluctuate with the times, making it a strong option for investors wanting in on the rise of silver. So, forget gold and consider silver stocks and ETFs instead on the TSX today.
