With an average annual return of 9% over the past 20 years, silver is an excellent hedge against inflation. Although it is the second commodity in the world, after oil, in number of uses (over 10,000), silver is mined as a by-product. About 70% of the silver mined is by-product, meaning it is adjacent to other metals such as copper or nickel.
“Being much more affordable than gold in price, more and more investors are turning to silver with the feeling that they have missed the gold train. The price of gold has seen an exceptional performance since the beginning of 2024. This year alone, the yellow metal has appreciated by more than 15% in most currencies of the world. But silver production cannot be accurately predicted, unlike gold. Not being able to estimate the level of production is problematic as demand increases year by year. As demand increasingly outstripped supply, silver shortages began to appear. Such deficits have been constantly recorded since 2019 inclusive, and the current balance of the deficit is over 25,700 tons, the equivalent of one year of mining production. For now, this deficit has been covered by the silver reserves in the vaults in London and New York, only that they are also finished", says Victor Dima, Manager of the Treasury Department of Tavex Romania.
The transition to a sustainable economy implies an increasing need for silver. These shortages are also fueled by the demand for silver as a metal for investment bullion and coins, jewelry and silverware. Considering all these aspects, experts expect increases in the price of silver in the coming years.
However, at the level of Europe there is an impediment in what it means to purchase silver, more precisely the taxation of the final price of silver with value added tax (VAT). The rate imposed in Romania is 19%. However, on resale, the purchase price of any precious metals dealer is the one without VAT. For this reason, the recommendation of Tavex representatives is to hold the silver for a period of at least five years, in order to recover both the price difference caused by the VAT and to achieve a return that exceeds the rate of inflation.
Silver has been used as currency for thousands of years, from the ancient Greeks to 20th century Americans. Such a rich past, but also a present oriented towards a greener future, ensures significant increases in the price of silver in the periods to come.
As the largest trader of investment gold in Northern Europe and an increasingly important player in the Romanian and Southeastern European market, Tavex has been an important member of the Tavex Group since 1991. Tavex opened its doors in Romania in 2019 and already has 3 offices in Bucharest and 1 in Cluj. Tavex offers high-quality investment products from physical gold, silver and currency. It specializes in offering investment gold, including gold coins and gold bars, as well as investment silver, while providing attractive exchange conditions for over 55 types of currency.
