Silver prices and 2030 asset allocation: Investment opportunities from the Incrementum report

As the global financial order is rapidly reshaping, interest in precious metals, especially silver prices, is surging. Incrementum’s renowned report “In Gold We Trust” states that by 2030, “performance gold” including silver will occupy an important position in investment portfolios. Let’s explore why silver prices are attracting investor attention toward 2030, along with the reasons and strategies behind it.

Background: Financial System Reshaping Promoting Silver Price Rise

The wobbling of dollar dominance, large-scale central bank gold purchases, and rising geopolitical tensions are driving up precious metals overall, particularly silver prices. This reshaping process is the most significant financial system shift since the collapse of the Bretton Woods Agreement in the 1970s.

As Zoltan Pozsar’s paper “Bretton Woods III” points out, the world is moving toward a new currency order backed by gold. In this process, all precious metals, including silver, are positioned as “restoring trust.” While major advanced economies like the US, Germany, and France hold over 70% of their foreign exchange reserves in gold, interest in semi-precious assets like silver is also increasing simultaneously.

Central bank actions are especially noteworthy. Over the past three years, central banks have continued to purchase over 1,000 tons of gold annually, reaching record levels called a “hat trick.” The demand stems from a desire for reliable assets to replace the US dollar, and the rise in silver prices is part of this major trend.

Bullish Market Toward 2030: Current Stage of General Investor Participation

Based on Dow Theory, a bull market passes through three stages: accumulation, participation of general investors, and euphoria. The current gold and silver market is precisely in the second stage, “general investor participation,” according to the key analysis in the Incrementum report.

In this stage, media coverage becomes increasingly optimistic, speculative interest rapidly grows, new financial products are launched in the market, and analysts repeatedly raise target prices. The timeline until 2030 is envisioned as a period where this participation stage deepens further, with more institutional and retail investors entering the market.

Over the past five years, gold prices have risen by 92%. Meanwhile, the real purchasing power of the US dollar has decreased by nearly 50%. This divergence suggests that demand for inflation-hedging assets, including silver, is still in its early stages. Even with gold surpassing $3,000, compared to historic bull markets, the overall rise remains gradual, with further upside potential toward 2030.

Structural Silver Price Upward Pressure from Money Supply Expansion

Understanding silver price increases requires examining changes in monetary policy. G20 countries have seen their money supply (M2) grow at an average annual rate of 7.4%. This pace is historically unprecedented.

Looking at the US, since 1900, the population increased 4.5 times, but M2 expanded by 2,333 times. Per capita, this is an increase of over 500 times. This disproportionate expansion indicates that inflation risk is deeply embedded in current markets, structurally boosting demand for commodity assets, including silver.

Citing Larry Lepard’s book “The Big Print,” the Incrementum report asserts that the growth of the money supply has entered a new acceleration phase. In this environment, silver prices are likely to serve not just as a speculative asset but as an essential inflation hedge.

Silver as Performance Gold: New Investment Strategy Development

The Incrementum report proposes a new investment strategy distinguishing between gold and silver. Instead of the traditional simple classification of “gold as a safe asset, silver as a speculative asset,” it positions silver as “performance gold.”

This category includes silver, mining stocks, and commodities. Examining performance in the 1970s and 2000s reveals that silver and mining stocks have significant potential for a strong rebound over the past decade. Market trends show that gold typically leads the trend, with silver, mining stocks, and commodities following in relay.

Looking toward 2030, silver prices could emerge as the star of this relay. Past data in stagflation environments show that the average real annual compound growth rate of silver is 28.6%, far exceeding gold’s 7.7%. This suggests that silver performs particularly well in economic stagnation combined with inflation.

Portfolio Optimization: Rethinking the 60/40 Allocation

The traditional 60% stocks and 40% bonds portfolio is no longer optimal in the current financial environment, according to the Incrementum report. The proposed new asset allocation is:

• Stocks: 45%
• Bonds: 15%
• Safe assets like gold: 15%
• Performance gold (silver, mining stocks, etc.): 10%
• Commodities: 10%
• Bitcoin: 5%

In this new structure, performance gold including silver accounts for 10%, gaining an important role. As confidence in traditional government bonds declines, silver is no longer just a supplementary asset but functions as a key element supporting both offensive and defensive aspects of the portfolio.

This allocation reflects a mid-term strategic shift toward 2030. Especially with large-scale silver purchases by Asian central banks expected, silver prices will be supported by fundamental demand factors.

Short-term Risks and Long-term Upside Potential

However, the Incrementum report does not only present an optimistic outlook. It clearly points out several short-term risks.

Central bank demand could unexpectedly decrease from the current quarterly average of 250 tons. If geopolitical premiums rapidly decline, silver prices could fall to around $2,800 in the short term. Speculative positions may also be rapidly reduced, potentially causing a 10-20% correction in the short term.

Nevertheless, these corrections are part of the stabilization process of a bull market and do not threaten the long-term upward trend, the report analyzes. Historical data shows that bull markets typically experience corrections of 20-40%. Since silver tends to have larger corrections than gold, investors need to maintain consistent risk management strategies.

Investment Strategy Toward 2030: Integrating Silver and Bitcoin

Looking toward 2030, the rise in silver prices should be understood not as an isolated movement but as part of a synergistic effect with new asset classes like Bitcoin.

The Incrementum report suggests that Bitcoin could reach 50% of the market capitalization of gold by the end of 2030, implying a Bitcoin price of about $900,000. Given a conservative gold target price of around $4,800, this forecast hints at a mutually reinforcing upward scenario for gold, Bitcoin, and all precious metals including silver.

The presence of multiple competitors in the non-inflationary asset space actually benefits investors. As the motto “competition stimulates business” suggests, the combination of gold, silver, and Bitcoin may offer better risk-return characteristics than holding each individually.

Conclusion: Silver Price and Asset Allocation Outlook Toward 2030

What emerges from Incrementum’s “In Gold We Trust” report is that, over the timeline to 2030, precious metals assets including silver will shift from being “supporting actors” in portfolios to becoming “main defensive and offensive assets.”

Global financial restructuring, the relative decline of dollar dominance, structural central bank purchases, and rising inflation risks all underpin the foundation for silver price increases toward 2030.

Gold provides defensive stability, while performance gold including silver offers offensive potential. This two-tiered approach is suggested as the optimal asset allocation strategy for the next five years. As confidence in existing currency systems wanes and a new financial order takes shape, silver prices are increasingly positioned not just as commodities but as strategic assets at the core of investment portfolios.