Silver's price is down 49% since January. Is it still a good investment?

In today's uncertain economic climate, many would be forgiven if strategic investing were far from their top concern. With inflation at its highest level since April 2023, the potential for a Federal Reserve rate hike is not insignificant, and with little job growth, according to a Thursday report, there's much to contend with in today's economy. So investing may understandably be less of a priority. But that could be a costly mistake worth avoiding, especially for those who have yet to get started with precious metals like gold or silver.

Silver, for example, offers investors many of the same advantages as a gold investment does for a fraction of the price. And that fraction has noticeably contracted in recent weeks. Priced at $116.61 per ounce on January 28, according to Priority Gold, the price of the precious metal has declined by 48.6% and, as of July 2, is now selling for just $59.88 for the same amount. This will inevitably lead to questions about the value of a silver investment right now. 

Namely, is it still a wise choice, or should those who have yet to add the metal to their portfolio consider alternative investments instead? That's what we'll examine below.

Learn how a silver investment could boost and protect your portfolio here.

Is silver a good investment now?

While each investor's circumstances will differ, there's a strong argument to be made supporting a small but strategic investment in silver now. Here are three reasons why it could make sense:

The price is much more affordable

The $100-plus per ounce silver was priced at six months ago was near a record high. But with it now being priced so much lower, it makes sense to buy a portion this July. After all, precious metal prices tend to only rise over time, meaning that this window of opportunity, based on historic performance, will likely only be temporary. 

That said, investors should still be judicious in their approach, and that means avoiding an overinvestment, even if the lower price makes it tempting to buy more than you need. Precious metals should generally be capped at 10% of your overall portfolio. But if you have less than that amount now or none at all, now is an affordable time to add silver to the mix.

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The price is still significantly higher than it was one year ago

While a nearly 49% price decline in six months shouldn't be dismissed, it may not be as dramatic as it seems on paper. Prospective investors need to understand that the price here is still significantly above what it was last July, when it was worth just under $37 for the same ounce. 

So, if you bought it then, you still would be ahead, and if you sold the metal in January, your return would have been substantial. In other words, today's price is still above where silver has historically been, so it makes sense to invest in it before it inevitably rises again, perhaps sooner than many would even expect.

Your portfolio can use the protections it provides

While perhaps less well known than its gold counterpart, silver, too, can provide many of the same benefits and protections the yellow metal can. It can act as a valuable portfolio diversification tool thanks to its ability to hold value and gradually rise over time. 

And it can be a smart (and more affordable) hedge against inflation because of this feature, which many will find useful now that inflation is over 4% again. That noted, silver price volatility is much more pronounced than gold's tends to be (one of the key differences between the two), so investors expecting a mirror performance will need to take a more nuanced and informed approach.

The bottom line

Whether you already have invested in precious metals and want to boost your holdings or haven't yet got started, an investment in silver can be advantageous now. With the price down by almost half compared to a record January high, that price still elevated compared to what it cost in years past, and the need for portfolio protections still elevated, a silver investment has multiple advantages worth exploring right now. Consider speaking with a representative from a precious metals company who can help you get started in a smart but limited way so that you can take advantage of this new, timely opportunity before the price inevitably starts ticking back up again.