Silver and the related exchange traded funds, namely the iShares Silver Trust (SLV) and Aberdeen Standard Physical Silver Shares ETF (SIVR), could be strong beneficiaries of the incoming Biden Administration. And not just because monetary policy looks to remain accommodative.
SIVR seeks to replicate, net of expenses, the price of silver bullion. The shares are backed by physically allocated silver bullion held by the custodian. All physical silver held conforms to the London Bullion Market Association’s rules for good delivery.
“So, you might be wondering why buy silver now if gold is more precious? What is there to gain from investing in silver? For starters, it is important to know how the market works and why Biden’s presidency spells a higher silver price in the near future,” ponders Value Walk.
Silver Linings Going Forward
Amid increased adoption of renewable energy sources, new, fast-growing end markets are emerging for silver. Translation: The expected influx of cash to the renewable energy industry thanks to Biden’s victory is seen as benefiting silver prices.
“As a major supporter of the Green New Deal, Biden’s impact on the silver price is inevitable. Silver is one of the best conductors of electricity and heat, and one of the most light-sensitive metals in the world. This makes it ideal for solar panels on top of its preexisting use in batteries, for purifying water, and in the fabrication of control rods in nuclear reactors,” reports Value Walk.
On the other hand, SLV seeks to reflect generally the performance of the price of silver. The Trust seeks to reflect such performance before payment of the Trust’s expenses and liabilities. It is not actively managed. The Trust does not engage in any activities designed to obtain a profit from, or to ameliorate losses caused by, changes in the price of silver.
“Biden’s aggressive stance on climate change goes to show that the US will shift to greener technology on a national scale. Therefore, silver demand will climb if he holds up his promise to fight against climate change. However, this comes with a price. The silver supply has reportedly already peaked. After the silver crash in 2011, fewer mines are open, and there are not many efforts to reopen or replace the closed mines,” according to Value Walk.
For more alternative investing ideas, visit our Alternatives Channel.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.
