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The Actors in a Silver Market

 

Many actors in the silver economy share a similar vision of the future: a market oriented to the needs of the elderly. This solution could benefit society as a whole, as it would lead to increased employment and economic growth. It’s possible that this new market could even solve the issue of ageing. The silver industry is not immune to these changes, though. The COVID-19 disruption is one example of a recent event that has disrupted the silver market.

Actors in a silver market

The actors in a silver market are largely located in the Southern Cone, which has the highest aging population. The silver economy is a private sector industry, with three out of four actors being for-profit enterprises. The report identifies the actors who are active in the silver economy in the region, and maps their trends. These actors include healthcare and education, transportation, housing, and the labor market. The report also examines the digital and educational sectors, including education, home automation, and cohousing.

The silver price is a volatile indicator. The ratio of price to silver production can vary by as much as four times in any given day. This is the case for silver bullets and other precious metals, and the ratio between them can be wildly different. This is a problem for investors, but fortunately there are solutions. The research shows that it’s possible to make a living with the silver market.
Price trends

If you are looking for investment opportunities, price trends of silver are the way to go. You can find updates on the price every few seconds during market hours, and the trend of silver in general is up. Many people look to precious metals for protection against the devaluation of fiat currencies and the volatility of the stock market. Some investors believe that silver will play a key role in bartering during the coming economic collapse. However, price trends of silver can be misleading. You need to carefully monitor these trends to make the right decisions.

Generally, silver is more volatile than gold. It tends to follow gold, but there are some exceptions. In fact, recent years have shown a significant divergence between the two metals. In late 2011, silver soared by 80 percent, and it continued its upward trend into April 2011. Price trends of silver against gold offer a better understanding of its trading value. Most investors use the historic Gold Silver Ratio to evaluate whether silver is an undervalued metal or an overvalued metal.

Short squeeze theory

The recent hype of a disruptive short squeeze in the silver market has been overblown. Investors should avoid buying physical silver assets based on such hype. In the stock market, internet hype has induced dramatic changes in valuations for companies like GameStop and AMC Entertainment. However, the global commodities space is a different beast. To make smart decisions, investors need to understand dominant long-term trends in the commodities space.

In the case of silver, a short squeeze would not be effective because of the fact that the price of silver has reached its highest levels in eight years. While short positions in silver are not advisable, there are long-term justifications for buying it, such as hedging against depreciating fiat currencies. Retail investors would need to drastically move the price of silver in order to cause a short squeeze. However, it is important to note that there have been a handful of instances where short positions in silver have been unjustified, so far.

COVID-19 disruptions

While the COVID-19 pandemic has affected the price of gold and silver, it has also disrupted the production of other metals. The Mexican government has ordered the suspension of mining and non-essential business operations. This resulted in a reduction in silver output in the second quarter, with just 158k silver equivalent ounces produced versus 599k in the first quarter of 2019. This disruption has impacted the company’s financial performance, with Q2 revenues declining 38% from the same period in 2019. The resulting loss per share (EPS) is a reflection of the lower value of the company’s metals and its exposure to the virus.

As a result of COVID-19, South Africa has declared a 21-day lockdown on its production. Three mines in the country have already declared a force majeure for the duration of the lockdown. Impala Platinum Holdings Ltd. and Sibanye-Stillwater Ltd. have also announced a 21-day lockdown on operations. Combined, these disruptions have reduced vehicle demand, which is a key driver of silver prices. Meanwhile, COVID-19 has lowered the price of other metals, such as gold and platinum, as it has for PGM. Traders are closing their positions in futures markets, either to meet margin calls or to raise cash.

Long-term investing in silver

When investing in silver, it is important to remember that it is not necessary to own silver directly. Investing in silver mutual funds can give investors exposure to silver prices. These funds are not physical silver, but rather they are a portfolio of stocks in companies that mine silver. As silver prices increase and fall, the stocks in the fund generally follow the trend in the price of the metal. These funds can be purchased through most stock brokers.

The risk of a decline in the price of silver is lower than the potential gain. However, the upside potential of silver is limited. If you purchase silver at a higher price, you risk a substantial loss. However, investing in silver over a long term can give you some decent opportunities. Investing in silver in long-term terms can be beneficial if you have the time to wait and watch for a trend.