Silver has been on almost everyone’s mind. Since July, the U.S. Mint has been placing quotas on silver coins—like the American Silver Eagle. This increase in investor interest continues today and the influx is not just affecting the U.S. Mint. The Royal Canadian Mint and Australia’s Perth Mint have also had to take measures to account for growing silver demands.
All this led us to wonder: What’s driving silver demand in 2015?
Low Silver Prices
The price of silver has continued to fall since 2011. July 2015 saw a 5½-year low, August saw a 6-year low, and the only question now is just how far will silver drop. With these prices it’s easy to see silver as the go-to metal for investors. Because of its low cost and potential for appreciation, investors of all backgrounds are interested in staking their claim. Silver versatility—both in the market and in a precious metals portfolio—certainly plays a role in the growing demand for the gray metal.
Rate Hike Rumors
With the U.S. economy strengthening, the Federal Reserve has begun considering an increase in the federal funds rate. If a rate hike occurs, investors may turn their eyes from precious metals and begin to invest back in stocks. However, just last quarter the Federal Reserve made the decision to keep the rate as is. This was good news for the precious metals market, as people continued flooding the market to buy gold and silver.
Silver’s the Better Option
The third reason relates to the gold-to-silver ratio. With numbers in the 70s, silver is the favored metal right now. Investors may see the opportunity to build upon silver they already have in their precious metals portfolio. The hope being to later use their silver assets to acquire gold when the ratio settles back down to lower numbers.
Silver coins are a great way to get into the precious metals market. Provident Metals offers an expansive inventory of silver coins and quality services to help any precious metals investor get started. To learn more about silver investing, visit Provident Metal’s blog and knowledge center.