Is Silver a Good Investment in 2023? | Silver Buyer's Guide

Is Silver a Good Investment in 2023?

If you’re looking to expand your investments in 2023, you may consider adding silver to your portfolio. Below, you can learn about what it means to invest in silver, how current market conditions can affect its price, and what makes it a good investment compared to other options.

How To Invest in Silver

Silver

One of the easiest ways to invest in silver is to purchase physical silver, either in the form of bullion or coins. Investors may enjoy owning physical silver, as it can be emotionally and psychologically rewarding. They can also display it in their homes as a sign of wealth or use it to purchase other items. If you want to purchase silver in its physical form, you can do so from a reputable dealer like our shop at Las Vegas Jewelry and Coin Buyers.

If you prefer to invest in silver without owning the physical asset, you can purchase a share of an exchange-traded fund (ETF) that holds silver. A few examples of ETFs are the abrdn Physical Silver Shares (SIVR) ETF or the iShares Silver Trust (SLV) ETF. You can also invest in silver in an indirect manner by investing in a company that mines silver. If you choose to go this route, always consult an experienced financial adviser for guidance.

Understanding Current Market Conditions

To understand if silver is a good investment, it’s helpful to first learn about current market conditions. Beginning in 2020 with the onset of the global COVID-19 pandemic, the United States government decided to participate in quantitative easing. This process involves the introduction of new money that previously didn’t exist in the existing money supply. The Federal Reserve System, which is the central bank in the U.S., led this initiative.

While the process of quantitative easing helped millions of Americans during difficult financial circumstances, the country felt its effects beginning in 2021. In 2021, the U.S. experienced inflation as a result of quantitative easing. The prices of everything from groceries and consumer goods to gasoline experienced great hikes. In 2022, the Federal Reserve System began to raise interest rates in an attempt to slow economic growth. Financial experts expect the U.S. economy to take a hit in 2023 as the market starts to get itself back under control.

Factors That Make Silver a Wise Investment

Now that you’re familiar with how the economy has gotten to its current point over the last couple of years, we can begin to analyze factors that may point to silver’s status as a wise investment for 2023. First, you can consider how the U.S. dollar performs historically in comparison to silver. When the U.S. dollar becomes weaker and the U.S. economy experiences volatility, which experts expect based on the market’s performance in 2022, silver tends to increase in value.

Another factor that may affect silver’s value is the global persistence of inflation. Even though the U.S. economy has introduced measures to curb inflation, it’s still prevalent in global markets. Historically, silver goes up in value when output gaps occur, which are large differences between an economy’s actual output and its predicted output.

Finally, you may consider the last significant gain that silver experienced. It occurred after the Federal Reserve System implemented quantitative easing in March 2020. Now, silver seems to be recovering from its lower price range, which means many investors are anticipating an inevitable rally.

Is Silver a Good Investment in 2023?

To understand if silver is a good investment, you may consider how it relates to the Japanese Yen. The Yen and silver are historically correlated in terms of value. Note that various economic factors have led to a significant decline in the Yen’s value. This decline began at the beginning of 2022 and has persisted through the end of the year. The Japanese government is considering direct currency intervention to prevent the problem from developing further. As central banks attempt to solve this problem and increase the value of the Yen, silver is likely to benefit.

If fiat currencies, which are currencies that don’t have a physical asset as a backing, fall in value like the Yen, silver can be a good safeguard to have. As the U.S. and the rest of the global economy begin to slow in growth, silver may see unprecedented price hikes.

How Does Silver Compare to Other Investments?

Silver is an investment that experiences varying levels of success each year, but it’s possible to predict its performance based on past trends. In 2022, silver experienced a positive 3% annual change in value. In the year prior, it declined 11.55% in value. In 2020, it increased by nearly 50% in value.

If you’re willing to hang onto your silver investment through 2023 and beyond, you may experience drastic positive gains like in 2020. If silver experiences a low point and you own it as a physical asset, you can enjoy wearing or otherwise admiring it. Knowing this information, you can review how silver compares to other investment options:

The Broad Stock Market

The broad stock market produces an average return of around 10% per year. Note that this is just an average, as the yearly figures vary drastically. You can invest in the broad market via index funds that cover the whole market. Note that if you pick an index fund for the U.S. stock market, you may experience large losses during years of financial hardship.

Fine Art

If you want an investment that tends not to correlate to how the economy is doing, you might consider investing in fine art pieces. While they typically return a modest 7.6% per year, they can produce reliable investment income.

Gold

Gold and silver prices have a strong positive correlation. If you want to diversify the physical investments you make but still anticipate similar performances, you may consider investing in both silver and gold.

Here at Las Vegas Jewelry and Coin Buyers, we make the process of buying and selling silver easy. Our inventory consists of fine jewelry with silver components, silver coins, and silver flatware and table items. No matter what you’re looking to sell or purchase, our team can help you with your investments. Contact us today to get in touch with a team member and learn more.