If you’ve been sitting on silver investments, coins, bars, or even old jewelry that you’re waiting to sell, waiting for the right price to convert the metal into cash, 2022 may offer the right timing for the transaction.
Silver prices are notoriously difficult to predict. In 2022, prices are slightly below their recent high in 2021 but still maintain a historically high average. That provides a solid window of opportunity for anyone who has been considering offloading silver belongings.
The international crisis has spurred banks and major financial institutions to raise their price predictions for the year, and while that’s no guarantee, there are several factors that point to higher gold and silver prices in the near future. Now may be the time to sell your silver if you’ve been holding out for higher prices.
These are some of the factors that silver watchers are paying attention to that could push prices higher throughout the year.
#1 High Inflation
Inflation has climbed rapidly around the globe this year, and some institutions believe that the world is entering into a persistent period of high inflation. Much of the blame falls on supply chain problems as a lingering result of the pandemic, combined with high demand all around.
Precious metals, including both gold and silver, are often used as an inflation hedge. They have generally maintained their purchasing power over time. While silver’s year-over-year performance may be uneven compared to inflation, many believe that it tracks gold’s performance in keeping up with purchasing power.
The result is that high inflation tends to lead to higher precious metal demand. That may be one of the factors showing behind strong metal prices lately.
#2 Geopolitical Tension
The Russian invasion of Ukraine has created a level of geopolitical uncertainty that tends to translate into demand for silver and gold.
Rhetoric has continued to ramp up throughout the situation, and tensions remain high. Few analysts expected the conflict in Ukraine to last as long as it has, but many worry that Russia’s actions will become increasingly unpredictable.
In times of global tensions, investors often look toward alternative assets, including commodities.
#3 Safe Haven Investing Demand
The combination of inflation and international conflict has not been great for stock markets. The S&P 500 has already gone through two corrections this year, with prices going down in both March and April.
Any drop in stock prices between 10% and 20% is considered a correction (rather than a crash), and prices did recover between the two corrections. However, it has meant losses and sluggish growth for investors.
Gold and silver have historically had little to no correlation with stock prices, making it an attractive safe haven for investors looking for an alternative to equities during times of market volatility.
Between silver’s performance during stock market crashes in the past and its performance as a long-term inflation hedge, it is widely regarded as an effective safe haven asset. When investors aren’t certain about the near-term future, their money starts to flow toward bullion, pushing prices up.
Ultimately, the best time to sell gold is when you’re ready to part with it. But 2022 could be an opportunity to capitalize on high prices.
