The U.S. has shifted gears and is now following a weak dollar policy. At least, that’s what economists believe following Treasury Secretary Steven Mnuchin’s comments in January 2018 welcoming a weak dollar, saying that it’s great for American businesses and will help reduce the U.S.’s trade deficits. With trade deficits a top priority for the Trump administration, it looks like the U.S. government is out to weaken its dollar against other currencies to help improve manufacturing competitiveness and boost exports.
What does the weak dollar policy have to do with silver prices? Over 50 percent of silver demand comes from industry. Silver may be the most widely used precious metal in industrial applications. If a weak American dollar means more exports, it also means more industrial activity. Only about a quarter of silver is used in coins and medals, including silver collectibles, collectible silver coins, and silver bullion coins.
The largest industrial uses for silver are in computers and electronics, medical uses, silver brazing and soldering, chemical manufacturing, engine manufacturing, solar panels, and glass and mirrors.
Electronics accounted for 5.9 percent of U.S. manufacturing shipments in 2012 while chemical production was more than $767 billion in 2016. Pharmaceutical and medical device manufacturing is another major U.S. manufacturing sector. As all of these sectors use silver as a key component in many consumables and devices, silver demand will see gain thanks to stronger exports.
Keep an eye on the latest price of silver in the coming months and years to see how industrial demand becomes great news for silver investors. Would-be silver investors should start buying silver sooner than later if they want to take advantage of increased industrial demand spurred on by a stronger U.S. manufacturing sector.
The silver market is not easy to predict, but there are more factors than just industrial demand playing into silver price predictions. An uneasy stock market and rising interest rates are also factors that could contribute to rising silver prices in the near future. Supply is another concern as there could be silver shortages down the pipeline due to present under-investment from mining companies.
You can start investing in silver online from sources like Silver Gold Bull, precious metal distributors who connect consumers with silver bullion from around the world. Silver coins, silver rounds, and silver bars are some of the most common silver bullion products you can invest in. Silver coins like the Silver Maple Leaf and American Silver Eagle are not available for purchase directly from national mints. You will have to buy the from silver dealers like Silver Gold Bull, which are also convenient sources for silver products like privately refined silver bars. Privately refined silver bullion often comes at much lower premiums than silver coins, but there are restrictions on which silver products can be purchased as part of an RRSP portfolio. Do your research into which silver products qualify for tax advantages and whether or not it makes more sense to buy at a lower premium. Silver investors are about to see major gains in their portfolios. Don’t miss out on the opportunity.