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The price of silver is now at a 2-year low, giving bargain hunters the opportunity to buy white metal at a discount. Gold and silver prices are expected to rebound once the dollar index hits a 20-year high of 110.78 from normal 90 levels. market experts, this rise in the dollar index is mainly due to the hawkish rhetoric of the US Fed in recent quarters. Thus, long-term bargain buyers have a good opportunity to invest in bullion. However, experts advise investors to opt for digital cash instead of the physical form of the white metal.
Advising investors to consider ETFs in silver rather than in the physical form of silver, Vinit Khandare, CEO and Founder of MyFundBazaar, said: “Hedging against currency depreciation, being priced globally, silver ETFs are suitable for investors seeking returns that are commensurate with the performance of silver, subject to tracking error, over the long term – can allocate a modest portion of their portfolio to silver by based on their long-term investment objectives.
MyFundBazaar’s Vinit Khandare went on to add that silver as a commodity plays a dual role as a precious metal and an industrial metal and receives adequate attention in the global commodity market, ensuring liquidity. Given the ability for an investor to digitally invest in easily tradable silver during hectic market hours, track the metal’s broad performance, and diversify their portfolio at low cost, the fund encourages consumers to invest in the silver because of its versatile utility in industrial activities – portable devices, industrial equipment, electric vehicles, power generation and telecommunications. Additionally, silver demand outlook is robust due to increased adoption of new and green technologies.
Radhika Gupta, MD and CEO of Edelweiss Asset Management, explains why you should opt for a silver ETF rather than physical silver: “Gold and silver have proven to be popular investment tools in current time because they offer a hedge against inflation.These precious metals also have a low correlation to equities and therefore offer you better diversification.Compared to physical gold and silver, the mutual fund structure of investment offers more convenience, accessibility and liquidity.
“Under the current scenario, the United States and other major developed economies continue to step up efforts to rein in rising inflation by raising interest rates, which could push economies into recession within 6 to 9 In such a scenario, we could once again see new investment demand coming into the precious metals complex although gold may outperform silver for the next 1 – 2 years. the same can accumulate money via ETFs and other investment options over the next 3-4 months, although investment options should still remain diversified in precious metals considering the next 1-2 years,” said Naveen Mathur, director of commodities and currencies at Anand Rathi.
Disclaimer: The opinions and recommendations made above are those of individual analysts or brokerage firms, and not of Mint.
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