Silver prices have been on a hot streak alongside gold as of late, which bodes well for the economy, given silver’s dual-purpose nature as a precious metal and an industrial metal.
Investors are now faced with the scenario that rates could be elevated for quite some time after a better-than-expected January jobs report. The U.S. Federal Reserve noted recently that further rate hikes are expected and keeping inflation in check can’t happen overnight.
“The jobs report was certainly stronger than anyone expected,” said Federal Reserve chairman Jerome Powell.
“The strong jobs report shows you why we think this will be a process that takes a significant period of time,” Powell added.
The slower pace of rate hikes may not come as quickly as expected, which could feed into more strength for the dollar while holding down precious metals. Silver, as noted previously, can operate with a dual purpose as a precious metal and an industrial metal, allowing it to thrive in various market conditions.
“Silver has sharply outpaced gold’s gains in the past three months, and its classification as both an industrial and precious metal may lead it on a path to even higher prices,” a Barron’s article said.
Getting Silver Exposure as Prices Climb
As Barron’s mentioned, rising silver prices could be a harbinger of positive things to come. Industrial usage of silver climbing could insinuate that the economy is still growing despite the threat of inflation.
“From Oct. 31 to Jan. 31, Comex silver futures climbed nearly 25%, outpacing gold’s almost 19% climb,” the article added, noting that it’s a “‘statistically unusual amount that shows the precious metals market is bullish on global economic growth in 2023,’ wrote Nicholas Colas, co-founder of DataTrek Research, in a Jan. 25 report.”
Investors seeking simple exposure to silver can consider the Sprott Physical Silver Trust (PSLV ). PSLV is a closed-end trust that invests in unencumbered and fully allocated LGD silver bars, providing a secure, convenient, and exchange traded investment alternative for investors who want to hold physical silver easily and efficiently.
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