With Banking Sector on Shaky Ground, Get Silver Exposure

A shaky banking sector is only adding to the wall of worry investors are scaling in 2023. Recent bank collapses are only adding to rising inflation and interest rates, which makes silver exposure an ideal safety option.

The fall of First Republic Bank and Credit Suisse certainly roiled the capital markets over the past couple of weeks, pushing silver higher in the past month. The precious metal is up almost 12% and could continue to see upside, especially if there are more developments in the banking sector to shake investor confidence.

“So, what will be the next shoe to drop on the banks? With no timeline for its finality or what could be expected next, the banking crisis just lumbers on, looking for its next poorly-capitalized victim or one that’s taken too much risk on the balance sheet,” a Yahoo! Finance report said.

At the same time, the overall economic picture doesn’t reveal a painting brushed with confidence. Financial leaders like the International Monetary Fund (IMF) chief noted that while the recent rescues may have put a proverbial bandage over a large wound, 2023 still poses many economic challenges — in effect, this warrants a continued need for safe assets like silver.

“International Monetary Fund chief Kristalina Georgieva said Sunday risks to financial stability have increased and called for continued vigilance although actions by advanced economies have calmed market stress,” the report added. “The IMF chief reiterated her view that 2023 would be another challenging year, with global growth slowing to below 3% due to scarring from the pandemic, the war in Ukraine and monetary tightening.”

Simple Silver Exposure With PSLV

Investors looking to obtain silver exposure to diversify their portfolios with precious metals don’t have to resort to purchasing the actual metal itself. They can get similar exposure using the Sprott Physical Silver Trust (PSLV) without the additional hassle of storing silver.

PSLV is a closed-end trust that holds unencumbered, fully allocated London Good Delivery bars of silver bullion, stored in the custody of the Royal Canadian Mint. Additionally, shareholders also have the option to redeem their shares for physical bullion anywhere in the world (subject to certain minimum conditions).

Redemptions of shares do not dilute the trust’s exposure for remaining shareholders. PSLV’s expense ratio is 0.62%.

For more news, information, and analysis, visit the Gold/Silver/Critical Minerals Channel.