Investing in silver is a great way for investors to diversify their portfolios and make long-term returns. Over the past 10 years, silver investments have seen an average annual return of 8.67%.
However, the long-term returns of silver can vary significantly depending on the time period and economic conditions. In the past 15 years, silver prices have grown an impressive 350%, compared to the 4.6% annualized return of 10-year Treasury notes over the same period.
2020 saw silver hit an all-time high of $30 per ounce, while 2021 saw a spike above $27 per ounce during the Russia-Ukraine conflict.
Because silver is both an industrial material as well as a precious metal suitable for value retention in times of economic uncertainty, the silver price often fluctuates between these two market valuations. Its dual nature, together with a small market, ensures that silver's price is more volatile than the gold price.
a 15 kg umicore silverbar is displayed here. the silverbars that goldrepublic sells and stores are produced by for example Umicore, Agosi or valcambi.
What has been the annual return on silver in Euros and US dollars? What was the annual change since 2001?
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Silver Price Performance Table: Annual Change
Source: London Bullion Market Association (LBMA)
Note: calculation based on end of year silver prices
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a standard (good delivery) silverbar weighs about 31 kg which equals a 1000 troy ounces.
Gold and silver prices have a strong correlation, meaning that their prices tend to move in the same direction. This is due to their similar status as stores of value, and their historic use as currency.
The gold-silver ratio is an expression of the price relationship between gold and silver and is calculated by dividing the current market price of one ounce of gold by the current price of one ounce of silver. Historically, the ratio has remained fairly stable but has seen increased volatility since the beginning of the 20th century.
Over the last half-a-century, gold and silver prices have generally moved in the same direction day-to-day, with silver prices tending to be more volatile. Investors who trade or follow the gold and silver markets can trade the gold-silver ratio for hedging purposes as well as to realize profits.
The gold-silver ratio, also known as the mint ratio, is a measure of the relative value of an ounce of silver versus an equal weight of gold. The gold-silver ratio has a long and distinguished history, with the earliest records of the ratio dating back to the Roman Empire. Throughout the 1800s, the ratio was around 15:1, implying that the physical price per ounce for gold was 15-times higher than that of silver.
Since then, the ratio has fluctuated between 17:1 and 90:1, depending on the current value of gold and silver, with an average ratio of 47:1 over the 20th century. As of the February 13, 2021 close for both precious metals, the ratio was 68.8:1. The ratio can be used by investors to assess the best time to invest, but should not be the primary factor in investing in precious metals.
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The COMEX division of the New York Mercantile Exchange is the heart of trading in silver contracts. Millions of ounces in silver futures and options per day are traded here. It is therefore also at COMEX that the current silver price - the "spot price" - is determined, which is used worldwide.
A number of major players have been accused of manipulating the price of silver via the futures market. One of the ways how the market may be influenced is through "naked short sellingâ€ . This practice entails artificially decreasing the silver price by suddenly creating a large quantity of silver stocks - although this is not backed by any actual physical silver. Short selling has disrupted the silver market to such a degree that the futures market has become decisive to the silver price and not the underlying value of the physical silver itself. This phenomenon partly explains the high volatility of the silver price.
GoldRepublic bases its silver prices on the spot silver price. The buy and sell prices listed on GoldRepublic's website are comprized of the spot silver price, multiplied by a dealer spread for which GoldRepublic can buy the silver. When you buy silver at GoldRepublic orders are always calculated on the real-time spot price.
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