Global Silver Demand
Silver has been viewed as money for thousands of years of human history. Since the Industrial Revolution silver has become the second most consumed element on earth after oil. Silver is highly used and irreplaceable in the solar, electrical, and mechanical fields, all of which are expanding industries. Meanwhile, silver production from mining is on a decline that is expected to continue for at least the next decade. While demand for silver from the investment sector has fallen in recent years, demand from emerging markets in China and India is soaring. At current price levels, silver appears to be a tremendous value with tremendous long-term upside potential.
Silver is Near a Historically Low Relative to Gold
Many investors who are building or evaluating their hard asset portfolio should pay attention to the gold-to-silver ratio, or the the number of ounces of silver required to buy one ounce of gold based on the spot market prices.
At the beginning of 2021, this ratio is near 75. As you can see from the chart silver is somewhat undervalued compared to gold. During the next financial crash, gold and silver prices are both likely to rise due to investment demand for a safe-haven assets and demand for a private tangible currency. Due to its low price and short supply, silver may have much more percentage upside in this scenario compared to gold.