Like its counterparts, gold and platinum, the intrinsic value of silver has been recognized throughout the ages as a store of wealth and a hedge against economic downturns.
When it comes to investing in precious metals, gold is often more commonly discussed than silver. Yet, the benefits of investing in silver must not be overlooked.
This precious metal may act as a hedge against inflation, and its demand continues to rise for modern manufacturing purposes. Silver has been used as a currency for thousands of years. It offers a unique combination of affordability, liquidity, and diversification benefits that have made it a popular choice for investors and collectors.
It can diversify your portfolio and provide you with a tangible, highly liquid asset to sell at your discretion.
Why buy silver? Below are the primary benefits to consider.
Silver: An Often Overlooked Investment
Many investors instinctively prefer gold over silver due to the former’s reputation as a sign of wealth. There’s something special and desirable about owning physical gold. However, focusing too much on that popular metal overlooks the benefits of investing in silver, which may better meet your goals.
Unlike other precious metals, silver remains historically undervalued and highly liquid — a unique combination that makes it an attractive choice for short-term and long-term holding. It offers an affordable entry point for investors who may not want to pay the steeper price for gold.
In early 2025, silver was trading for a fraction of the price of gold. There have even been moments in history when gold was 80 times the price of silver.
This indicates that silver may have significant potential for appreciation as market dynamics shift. Buying this precious metal at a low price now may leave you with room to sell at a much higher price down the line.
This metal also has many functional uses in technology, and its industrial popularity is growing. Over time, its price may trend upward to better reflect intrinsic value and growing demand.
Investing in silver offers many of the same benefits as investing in gold for a fraction of the upfront costs. This asset is accessible to a wide range of investors, whether you are just beginning to invest for retirement or looking to diversify an already vast investment portfolio.
Silver As A Hedge Against Inflation
Silver has historically protected against inflationary pressures as its value tends to rise during periods of rapid price increases. When demand for goods and services outpaces supply or a government prints money, prices rise, eroding the purchasing power of a nation’s currency — something average Americans have become all too familiar with in recent years. With silver’s price tending to move in lockstep with the cost of goods, it can act as a buffer against inflation and its associated price hikes.
Silver may act as an effective hedge against inflation because:
- It tends to maintain its worth over time. Unlike the value of the dollar, which shifts unpredictably, silver’s worth often remains relatively steady.
- Its price often increases during periods of inflation. Historically, the value of silver has often risen to match or outperform inflation rates. During the stagflationary 70s, when the US economy suffered years of double-digit inflation, the price of silver rose from $1.83 per Troy ounce to $30.13 per Troy ounce — a nominal return over 16 times the original price. In buying silver, individuals can help protect their wealth from inflation and guard against a weak dollar.
- It is tangible. Investors enjoy knowing they can hold their investments in their hands and visualize a tangible store of their wealth. This asset feels safer than digital accounts that gain and lose value suddenly.
Imagine storing $1,000 in a safe deposit box for 30 years and investing $1,000 in silver for the same amount of time. At the end of the 30-year period, the silver would statistically be worth a significant amount more, while the cash would have lost value due to inflation. This is the power of silver to hedge against inflation.
The Increasing Industrial Demand For Silver
Why buy silver? One of the most compelling reasons to consider this precious metal now is its rising industrial demand.
More and more industries are using it in manufacturing, especially for:
- Technology: Silver is an excellent conductor of heat and electricity. It’s also strong and malleable, making it a valuable component in a wide range of technologies. Manufacturers of electronics, medical devices, cars, and many other products rely on it.
- Sustainability: This metal also plays a vital role in the production of solar panels, specifically photovoltaic cells. As the sustainability industry continues to grow, so will the need for silver.
- Medicine: Certain medical treatments and devices depend on silver. For example, some wound dressings and creams use this material as a biocide, helping to prevent infections. Countless medical devices also use it, including implants, surgical instruments, catheters, and much more.
Because each of these industries depends heavily on silver, you can feel relatively confident that the demand for this precious metal will remain steady if not rise in the coming years. Growing demand for buying physical silver, such as coins and bars, is also becoming more pronounced, as more individuals and institutions look to diversify their savings with the metal’s low cost per unit — a trend that experts say should continue in the near term. Meanwhile, the supply cannot reasonably keep up with demand.
Silver is a limited resource, and mining projects are slowing down as new deposits become more difficult to find. The deposits miners have relied on for years are nearing depletion. And with over 85% of the metal used in industrial applications being discarded as waste, the supply of silver continues to remain constrained, creating an attractive entry point for those looking to capitalize on its historically undervalued prices.
Using Silver To Diversify Your Portfolio
Many investors purchase precious metals for portfolio diversification, and silver offers several benefits for this strategy:
- Low correlation with other assets: Its value tends to move independently of stocks and bonds, and it often acts as a balance during volatile stock market periods.
- Often seen as a safe-haven asset: Because its value tends to remain stable in times of economic uncertainty, many view it as a safe-haven asset or a safe place to store their wealth. Gold offers this same benefit, which is why maintaining a gold-silver ratio in your investment portfolio may be wise.
- Liquidity: It is relatively easy to sell for cash, offering greater flexibility than many other investments that come with waiting periods or transfer fees
At roughly 1/70th the price of gold, silver’s low cost per unit provides a cost-effective way to diversify and reduce risk exposure, while its liquidity ensures owners can quickly convert their silver bullion into cash if necessary.
How To Begin Investing In Silver
Now that you know the answer to “Why buy silver?” you may be ready to start investing in this precious metal. Two options you may want to consider are as follows:
- Buying physical silver: You can purchase coins, bars, and bullion to store at home or in a secure location. Then, you can sell them when you are ready to cash in your investment.
- Opening a Silver IRA: You can open a self-directed IRA and purchase silver with it, incorporating this metal into your retirement savings. You can even roll over a 401(k) into a Precious Metals IRA and use the proceeds to invest in silver as well.
For either option, strongly consider storing your precious metals somewhere safe. Self-directed IRAs require you to keep them in an IRS-approved storage depository. If you want to own the metal outright, you can consider storing it in a home safe or through a professional vault service.
Finally, be mindful to monitor market trends and consult financial advisors to help you make strategic, educated investment decisions. Watch the silver market and determine the right time to sell.
Purchase Silver Through Preserve Gold Today
Why buy silver? If you are interested in exploring the benefits of this asset further, our precious metals experts at Preserve Gold can help. We sell a wide range of trusted silver products and deliver them straight to your door. We can also help you open a Precious Metals IRA and fund it with your selection of silver products.
Call us today at 877-444-0923 to discuss our inventory and learn how you can start investing in this asset.
