You have watched as gold prices have soared for years, going parabolic in the last couple of years. But it isn’t just gold that has seen its price rise. Silver, too, has climbed to new highs.
Investors are buying their fair share, but silver has industrial uses that have increased demand. Industrial buyers are driving demand, with solar panel producers at the forefront. The Wall Street Journal’s Roshan Fernandez suggests that’s a risk, writing:
Demand from industrial buyers has yet to slow. Silver consumption for cutlery and electronics has remained steady, while demand from solar-panel manufacturers has kept growing, said Michael Widmer, head of metals research at Bank of America.
There is a risk that demand from the solar sector, especially in China, was pulled forward ahead of trade restrictions and changes to U.S. energy policy, and that there could be a hangover in the second half of the year, said Greg Shearer, JPMorgan’s head of metals research. Another risk to rising prices, analysts say, is that manufacturers might swap silver for cheaper metals, or reduce the quantity they use, if it gets too expensive.
Action Line: Remember, Your Survival Guy considers precious metals a sort of insurance policy in your portfolio. When they’re prices are falling, oftentimes prices for other assets are rising, and vice versa. As Harry Markowitz explained, diversification is the only free lunch in investing. When you want to talk about diversification in your portfolio, email me at ejsmith@yoursurvivalguy.com. And click here to subscribe to my free monthly Survive & Thrive letter.
