And the gold medal in the race for returns goes to... Ummmm....... SILVER! The precious metal is beating gold and the stock market this year. Silver might be considered second best by many, but it is beating gold on the stock market this year. Investors took an early shine to gold in the pandemic, and the price hit a record high in the summer.
But silver has since come out on top. By early September, the value of silver had risen 52 per cent since the start of the year,and while its rise has now been reduced to 39.9 per cent, a £10,000 investment made at the start of the year would still be worth £13,991. The same investment in gold would be worth £12,781.
Precious metals have been boosted by the stock market turmoil, which has sent investors flocking to so-called 'safe haven' assets that are seen as a more reliable way to store value during times of economic uncertainty. Gold and silver have benefited partly because falling interest rates have made it less attractive to buy government bonds - another traditional safe haven.
Gold is the flagship safe-haven metal, while silver tends to be riskier. This is because most gold is held in investments, which keeps the price steady, but more than half of the silver produced each year is used as an industrial metal. This means it can be much more susceptible to swings in demand or predictions about the world economy: as economic growth usually indicates more metal will be consumed.
Until the arrival of digital cameras, silver’s main use was in photographic film. It is now used in a variety of everyday objects from mobile phones to parcel-tracking chips and, of course, jewellery and tableware. It is highly resistive, and malleable and is the best conductor of all metals. It is also anti-microbial. This means it is used in medical equipment and water purification, as well as electronics. One more recent area of rapid growth for the use of silver is solar panels. At the moment this is likely a strength for silver because when the global economy begins to recover from Covid and industrial production picks up, the need for it will rise, and with it, hopefully its value.
Silver is also a key green metal and is used in solar panels. The push for renewable energy could raise prices considerably in the long-term. Im predicting silver prices could boom if Joe Biden wins the U.S. presidential election, and delivers his sweeping green infrastructure plan.
It has been a rollercoaster ride for silver prices over the past decade, peaking at $48.55 an ounce in April 2011, before falling to $14.11 in September 2018. Gold prices have rallied by more than a third this year and have broken the $2,000 (£1,530) an ounce mark for the first time ever. Many think if gold continues to surge - with predictions of up to $3,500 (£2,677) by the end of 2021, then silver will rise as well.
Want to find out more about gold and silver? Get the latest news, guides and information by following the best community on the blockchain - #silvergoldstackers. We're a group of like minded precious metal stackers that love to chat, share ideas and spread the word about the benefits of "stacking". Please feel free to leave a comment below or join us in the community page, or on discord.