The way silver prices have increased over the past few months has renewed interest among investors. Is this the best time to invest in silver? What strategy should be adopted for silver investment? What do market experts say about this?
Why is silver becoming investors' favourite?
Industrial demand is increasing: The use of silver in solar panels, electric vehicles, and the electronics sector has increased significantly.
Supply crisis: Inadequate silver production through any new combination of new mining and recycling.
Inflation and dollar weakness: When the dollar weakens, prices can rise, especially in India, because the rupee becomes weaker, which affects silver imports.
ETF investment is increasing: Even if people don't want to buy silver directly, they are increasing investment through ETFs, which has added a new dimension to investment trends.
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The risk is not low
Price volatility: Silver prices can rise very quickly. They can also fall quickly. Price corrections of up to 10–20% can happen within a short period.
Dependent on silver's industrial demand: If global or industrial demand decreases, silver prices can fall rapidly.
Storage and premium issues: Physical silver is large in size. Therefore, its storage is difficult and there may be additional costs for buying and selling. ETFs may sometimes face tracking issues.
Entry timing: Prices have already seen a major rise. Investing now may carry higher risks. There could be a significant fall in prices.
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How to invest in silver
Keep the amount low: Silver should not be the main part of the portfolio. An allocation of 2-5% is generally sufficient for retail investors.
Physical silver: Emotionally satisfying, but storage and transaction costs are higher.
Silver ETFs: More efficient, less storage hassle, can move better with market prices.
Buy gradually: Instead of making a large investment at once, buy gradually over time. An averaging-in approach can be effective.
{News Ei Samay does not provide investment advice anywhere. Investment and trading in the share market or any field involve risk. Proper study and expert advice are recommended beforehand. This news is published for educational and awareness purposes.}
