Silver as an investment
India has traditionally been a place where people have great fondness for precious metals like silver and gold. Among all the precious metals, silver, by virtue of being more affordable, has been a preferred choice of masses for ornaments and bullion investment. There is a good market, which offers fair price discovery and reasonable liquidity. All of these make this precious metal a good investment asset for many. However, the price of silver has been range-bound for quite some time, while gold on the other hand has done fairly well on medium to long-term basis.
Silver as an investment
In times of economic brouhaha, troubles, and uncertainties, many people run towards investing in precious metals. Precious metals such as gold, silver, and platinum are considered safer investments in periods of increased market volatility and uncertainty because of the stability that they offer investors.
In fact, the value of precious metals tends to rise during periods of economic turmoil because the fear of a market crash often leads to an increase in their demand. Interestingly, gold seems to get all the attention among precious metals investors probably because it appears to be the shiniest precious metal — in fact, gold appears to outshine platinum and diamonds in the eyes of investors.
More so, gold has occupied an important economic position that spans hundreds of years; hence, other precious metals play second fiddle to gold in their investment appeal. However, for everyday investors, silver might be a better investment than gold even though it is not quite as popular as gold.
This article seeks to intimate you with 3 reasons that make silver a better investment than gold. In essence, the market thinks that gold is about 81 times more valuable than silver. The truth of the matter is that gold has always been valuable than silver but gold should not be 81 times more valuable than silver. However, silver is being used up at a faster rate than gold — silver is mined at a ratio of 11 to 1 against gold.
Historically, gold has always been 15 times more expensive than silver; hence, the current trade price of gold in relation to silver is disproportionate as shown in these graphs:.
If the global economic uncertainties continue, we can reasonably expect that the price of gold will increase in the short to medium terms. However, we can expect the price of silver to rise at an exponentially higher rate tin order to catch up with gold and restore the historical price difference.
The second reason that makes silver a better investment than gold is that silver has more industrial applications than gold—the industrial applications of silver adds to its demand. Silver is reflective, thermally conducive, and electronically conducive. In the last 25 years, more patents that require the use of silver have been granted than gold-based patents.
It was reported that about 1 billion ounces of silver were used in consumer products in the last 10 years. The industrial applications of silver will also increase in the coming years because only trace amounts of silver are used in industrial applications.
Hence, it is not practical to recycle the silver that has been used in commercial applications — it makes more sense to mine and use new silver than to recycle silver from older products. It is logical to expect that the rate at which industrial applications use up silver will continue to rise in the coming years. Hence, it is logical to expect the price of silver to trend up in the coming years.
The third reason that suggests that silver investors will be better off than gold investors in the long term is the level of uncertainties that surround the supply of silver. Uncertainties about the supply of precious metal could affect its trading price and the price tends to rise when the uncertainties suggest that the supply will fall. For instance, Silver is mostly mined in countries where political unrest, labor conflicts, poor infrastructure, and economic manipulations are a common occurrence.
China appears to be relatively stable but the country walks a tight rope between peace and anarchy. You can download this epic post for your personal library. Investors in precious metals should have more reasons to smile to the banks in the short to medium terms inasmuch as the uncertainties in the global economic landscape remain intact. Irrespective of whether you invest in gold or silver, precious metals are a better investment over other asset classes.
However, before you start buying up silver or gold, you should note that the price of precious metals is subject to much volatility; hence, you should be ready for a roller coaster ride with your investment. Then make sure to check out our Bookstore Instant Download - Print off for your private library before the government demands we take these down! Cuba V. Is silver a better investment than gold Offshore Gold and Silver.
By EA Editors. Is Silver a Better Investment Than Gold In times of economic brouhaha, troubles, and uncertainties, many people run towards investing in precious metals. Like Our Articles? You might also like More from author.
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Silver may be used as an investment like other precious metals. It has been regarded as a form of money and store of value for more than 4, years, although. What are the pros and cons of investing in silver bullion? Read on to learn why now may be the time for investors to enter the market.
Gold and silver have been recognized as valuable metals, and have been coveted for a long time. Even today, precious metals have their place in a savvy investor's portfolio. But which precious metal is best for investment purposes? And why are they so volatile?
The silver market has been volatile over the past 20 years, with a huge bull market that ran throughout most of the s and early s giving way to a big pullback in recent years. Now, however, some see silver as an investment that could take advantage of industrial demand, especially if new supply gets constrained by lower prices.
By the time of writing this article, silver was trading at For thousands of years, silver has maintained a positive market demand as an investment, currency and store of value. This precious metal also features in the stocks exchange as a traded product.
Why Invest in Silver?
Silver may be used as an investment like other precious metals. It has been regarded as a form of money and store of value for more than 4, years, although it lost its role as legal tender in developed countries when the use of the silver standard came to a final end in Some countries mint bullion and collector coins, however, such as the American Silver Eagle with nominal face values. Collectors of silver and other precious metals who collect for the purpose of investment either as their sole motivation or as one of several are commonly nicknamed stackers , with their collections dubbed as stacks. However, while these bullion coins are considered legal tender, they are rarely accepted by shops [7] and not typically found in circulation, as opposed to pre-debasement ' junk ' or 'constitutional' silver coins, which still occur in circulation on occasion. The price of silver is driven by speculation and supply and demand , like most commodities.
Investing in Silver: Four Ways to Invest and Why
In times of economic brouhaha, troubles, and uncertainties, many people run towards investing in precious metals. Precious metals such as gold, silver, and platinum are considered safer investments in periods of increased market volatility and uncertainty because of the stability that they offer investors. In fact, the value of precious metals tends to rise during periods of economic turmoil because the fear of a market crash often leads to an increase in their demand. Interestingly, gold seems to get all the attention among precious metals investors probably because it appears to be the shiniest precious metal — in fact, gold appears to outshine platinum and diamonds in the eyes of investors. More so, gold has occupied an important economic position that spans hundreds of years; hence, other precious metals play second fiddle to gold in their investment appeal. However, for everyday investors, silver might be a better investment than gold even though it is not quite as popular as gold. This article seeks to intimate you with 3 reasons that make silver a better investment than gold. In essence, the market thinks that gold is about 81 times more valuable than silver.
Folks who invest in silver often say that doing so lets them hedge against the risk that their other investments might depreciate — and against the risk of catastrophic events. Much of the appeal of commodities like silver stems from the fact that they give investors something to latch on to.
Gold isn't the only game in town, even though you'd never know it by watching late night TV. Investing in silver means putting your money into the production, trading or outright ownership of silver metal. For most investors this means buying quantities of bullion in coin or bar form and holding onto it.
How to Invest in Silver the Right Way
Physical silver is a tangible asset with no counter-party risk or default risk. Silver has an intrinsic value due to its metallic characteristics making it suitable for industrial, medical and ornamental use and due to its finite supply. There are also compelling fundamental reasons to buy silver. Chart: years history of the silver price. Silver is also the best conductor of electricity. The silver price is therefore often more volatile than the gold price. The global silver market has been in a deficit position since Of the estimated 1. These two markets dominate price discovery for silver. However, both of these markets are based on vast paper trading with little physical silver supporting the gigantic trading volumes. The amount of silver cleared each day in the fractionally-backed synthetic paper silver markets in London is staggering. An Open Interest of , contracts represents 31, tonnes of silver, which is approximately equal to the yearly silver supply.
Investing in Silver
The best way to invest in silver is to gain exposure to the price of this precious metal through mutual funds, exchange-traded funds ETFs or exchange-traded notes ETNs. But before investing in silver funds, investors should learn the benefits and strategies of buying precious metals. Silver as an investment has similar purposes as gold. There are industrial uses for silver, such as jewelry, but the price is driven primarily by supply and demand and investor speculation. Typically, precious metals, such as gold and silver, are in higher demand when there is widespread uncertainty about currencies, especially with that of the U. Silver is often used as a hedge against currency fluctuation or as a store for cash during times of economic uncertainty and unrest. The silver market is much smaller than the gold market, which makes for higher volatility fluctuations in price.
