Silver price to highest level since September 2013

The price of silver has risen this week to almost €560 per kilogram, the highest level since September 2013. Since the beginning of this week, the price of the precious metal has already risen by 10% and since the beginning of this year, silver has even increased in value by 31%. The precious metal is benefiting from the impact that Brexit has on the monetary policy of central banks. Investors expect central banks to ease their monetary policy further and are therefore looking for safe havens such as gold and silver.

 For example, the governor of the Bank of England announced earlier this week thatknow that more monetary stimulus is a possibility, for example through a rate cut or the purchase of government bonds. In the meantime, the ECB is considering changing the terms of its stimulus programme Easing, so that it can buy bonds more easily. Since this week, investors have also estimated the probability of an interest rate cut by the Federal Reserve to be higher than the probability of an interest rate hike.

Silver price rises to highest level since September 2013

Flight from currency

More monetary easing will further accelerate the flight from currencies. Investors are looking for safety in tangible assets and, due to low interest rates, see less and less reason to hold on to savings or invest in bonds. In a world of negative interest rates, precious metals such as gold and silver are suddenly an attractive alternative, because they do not have negative interest rates. Also, with precious metals you have no counterparty risk, unlike a savings account with a bank.

The Silver price is rising even faster than the price of gold this year. The silver market is much smaller than the gold market, which means that silver usually rises and falls in price much faster than gold. Investors currently prefer silver, as the precious metal is relatively undervalued relative to gold from a historical perspective. In recent decades, gold has been on average 40 to 45 times more expensive than silver, at the time of writing a troy ounce of gold costs 70 times as much as a troy ounce of silver.

Investing in silver

Investors who Buy Physical Silver often opt for investment currencies such as the Canadian Maple Leaf, the Austrian Philharmoniker and the Australian Kangaroo. These coins are produced in large quantities and therefore have a relatively low premium compared to the silver price. Also, these coins are traded under a lower VAT rate than silver bars.

Would you like to know more about investing in silver? Please contact us at sales@hollandgold.nl or call +31(0)88 468 8400.