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Home / Money / Personal Finance /  Silver price today at 2-year low. Is it wise to invest in silver ETFs, MFs?
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Silver price today is around its 2 years low, giving opportunity for bargain hunters to buy white metal at a discounted price. Both gold and silver prices are expected to bounce back once there is ease in dollar index that has surged to its 20-year high of 110.78 levels from is normal 90 levels. According to market experts, this rise in dollar index is mainly due to the hawkish rhetoric by the US Fed in last few quarters. So, long term bargain buyers have a good opportunity to invest in bullions. However, experts are advising investors to go for the digital silver instead of physical form of the white bullion metal.

Advising investors to look at silver ETF ahead of physical form of silver, Vinit Khandare, CEO & Founder at MyFundBazaar said, "Hedging against currency depreciation, being priced on a global scale, silver ETFs are suitable for those investors who are seeking returns that are commensurate with the performance of silver, subject to tracking errors, over the long term - can designate a modest amount of their portfolio to silver depending on their long-term investment objectives."

Vinit Khandare of MyFundBazaar went on to add that silver as a commodity playing a dual role as a precious metal as well as an industrial metal and gets adequate attention in the global commodities market, ensuring liquidity. Given the opportunity for an investor to digitally invest easily-tradable silver during hectic market hours, tracks the extensive performance of the metal and diversifies one’s portfolio at a low cost, the fund encourages consumers to invest in silver due to its multi-purpose utility in industrial activities - portable devices, industrial equipment, EVs, energy production and telecom. Moreover, the silver demand outlook is robust on account of higher adoption in new age and green technologies.

On why one should go for silver ETF ahead of physical silver, Radhika Gupta, MD & CEO at Edelweiss Asset Management said, "Gold and Silver have proven to be popular investment tools in current times as they offer a hedge against inflation. These precious metals also have a low correlation with equities and therefore offer you better diversification. Compared to physical gold and silver, the Mutual Fund structure offers greater convenience, affordability, and liquidity."

"In present scenario US & other major developed economies continue to shore up efforts to tame rising inflation by raising interest rates which could push the economies into recession in coming 6 – 9 months period. In such a scenario we might again see fresh investment demand coming up in the precious metals complex although Gold may outperform Silver for next 1 – 2 years. Hence considering the same one can accumulate Silver through ETF & other investment options in next 3 – 4 months period although investment options still needs to stay diversified in precious metals considering next 1 -2 years," said Naveen Mathur, Director – Commodities & Currencies at Anand Rathi.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

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