Silver has had a remarkable run this year, surging 33% and attracting the attention of investors around the world. This precious metal is indispensable in modern technologies, fueling growing industrial demand, and provides reliable protection against currency devaluation.
Recently, our esteemed analyst Alan Hibbard appeared on Schwab TV to dig deeper into the forces propelling silver's rise. In short, demand comes from everywhere, from individual investors to institutional investors. This is why he expects silver to outperform gold by a factor of 2 to 1 in the near term.
We'll cover the rise in silver and much more, but first, let's catch up on the news.
Central banks continue their gold buying spree
According to the World Gold Council, global central banks have added around 2,200 tonnes of the metal since the third quarter of 2022. Notably, China's central bank has increased its gold reserves for 18 consecutive months, increasing its gold reserves by 16 %, or 10 million. troy ounces.
Copper hits new highs – future demand drivers
Copper prices hit a record high of $11,000, up 35% from the start of the year. The price of copper on the London Metal Exchange (LME) hit an all-time high of $11,104.50 per metric ton on Monday, driven by a rally driven by short covering and speculative bets. Copper is used in a multitude of applications such as energy, construction and, increasingly, in green energy applications such as electric vehicles and AI data centers, and there is global demand should continue to increase.
Recession warning as 19 states post rising unemployment
A recession could be imminent, according to Nancy Lazar, chief global economist at Piper Sandler. Lazar noted that 19 U.S. states had seen an increase of at least 0.5 percentage points in their average unemployment rate, which has been an indicator of nationwide recession in the past.
This Week in History: The Securities Act of 1933
On May 27, 1933, the United States passed the Securities Act of 1933, a cornerstone of financial reform during the Great Depression. This landmark legislation was intended to restore public confidence in financial markets after the stock market crash of 1929 and the economic turmoil that followed.
The law required issuers of securities to provide true and complete information about their offerings, allowing investors to make informed decisions. The requirement for detailed financial disclosures has helped establish a culture of transparency and accountability in financial markets. By ensuring that investors have access to accurate information, the law helped restore confidence in the stock market, which is crucial to economic recovery.
The fire assay method is a traditional and highly accurate technique used to determine the purity and content of gold and silver, developed in 1350 BC. Which ancient culture developed the fire assay method?
A. The Egyptians
B. Babylonians
C. Phoenicians
D. Sumerians
Scroll to the bottom of this email for the response…
What causes the money rush?
Silver is having an impressive year, up about 33% year-to-date, attracting considerable attention from investors.
We all know that silver has incredible historical significance. It has been a reliable medium of exchange for nearly 5,000 years, providing a stable store of value across civilizations. But that's not the only reason to add money to your investment portfolio:
- Industrial Demand: Silver is the second most widely used commodity after petroleum, with over 10,000 uses due to its unique characteristics such as high conductivity and reflectivity. The increasing adoption of green technologies such as electric vehicles, solar panels, and electronics is expected to significantly increase the demand for silver. For example, each electric vehicle uses up to 50 grams of silver, and solar panels use about 20 grams per unit.
- Inflation Protection: As a physical asset, silver cannot be hacked, erased, or inflated, making it a reliable hedge against currency devaluation. During periods of prolonged inflation, such as the 1970s, the value of silver skyrocketed, increasing nearly 35 times, from $1.40 an ounce in 1971 to an intraday high of over $50 an ounce in 1980. Silver also has a low correlation to other asset classes, making it valuable in a broader multi-asset portfolio.
- Accessibility: With a lower price than other precious metals like gold, silver provides an affordable entry point for new investors in precious metals. An ounce of silver costs significantly less than an ounce of gold, and for investors with limited funds, this can make a difference.
Our friends at Sprott have compiled a brochure featuring these impressive statistics and more, exploring the many reasons to own money. To explore these points and more, read the full brochure here.
Alan Hibbard joins the Schwab network
During a recent appearance on Schwab TV, Alan Hibbard shared some valuable insight into the recent upward movements in gold and silver prices.
“We have seen central bank gold purchases increase since 2016…Retail demand is really high. We've seen Costco and Walmart sell gold, which is atypical, and investors are flocking to these markets. Demand comes from absolutely everywhere, from the retail investor to central banks, and everywhere in between..” Hibbard explained.
In less than seven minutes, Alan explains why the economy may not be as robust as central bankers suggest and why precious metals are positioned for further gains. He also explains why he expects silver to outperform gold by a factor of 2 to 1 in the near term. Alan thinks it's entirely possible that the price of silver could reach $50 sooner than expected.
To hear Alan's reasoning, Watch the full interview here.
And if you want to enrich your Money portfolio, it's easier than ever. Just click on the link below.
This will conclude another weekly issue of GoldSilver Nuggets. We'll be back with more news and updates next week!
Best,
Brandon S.
Gold Silver
The fire assay method is a traditional and highly accurate technique used to determine the purity and content of gold and silver, developed in 1350 BC. Which ancient culture developed the fire assay method?
A. The Egyptians
B. Babylonians
C. Phoenicians
D. Sumerians
Answer – B. Babylonians
The Babylonians began using the fire assay method to test the purity of gold around 1350 BCE. In this ancient technique, a small sample is mixed with fluxes (such as lead oxide, sodium carbonate, and borax) and placed in a crucible. The mixture is then heated in an oven to high temperature (around 1,100-1,200°C). The fluxes facilitate the melting of the sample and bind to the impurities, allowing separation of the pure metal. This method has played a fundamental role in assessing the quality and value of gold throughout history.