“In 2017, demand outpaced supply by 810 tons,” said Global X. “If investments in silver bars and coins are excluded from the analysis, however, then the supply of silver continues to exceed demand. This implies that demand for silver as a store of value and an investment can dramatically swing prices, particularly given the volatile nature of such demand.”

Silver’s slack start to 2019 is betraying what were optimistic forecasts for the metal heading into the year after a rough 2018. A more accomodative Federal Reserve would bolster the case for silver. Looking ahead, silver and other precious metals may continue to face an uphill struggle as the Federal Reserve is expected to keep hiking interest rates, which makes non-yielding assets like commodities less attractive.

Still, there are compelling reasons to embrace silver miners.

“Mining stocks are considerably more liquid than physical silver as they can be bought and sold during market trading hours. Silver mining stocks can also be advantageous from a tax perspective, as long term holders are taxed at long term capital gains rates, which are currently at a maximum of 23.8%. A potential drawback is that investors are exposed to idiosyncratic risks associated with owning the stock of a particular company,” according to Global X.

For more information on the silver market, visit our silver category.