Just like other precious metals, silver may be used as an investment. Silver has been used as a store of value or a form of money for more than thousand years. Even though silver has been used as a form of money, it has lost its role as a legal tender in the United States. In the year 2009, the main demand resulted from jewelry, exchange-traded products, bullion coins, and mostly industrial applications.
The silver market is much smaller than the gold market. The London silver bullion market turns over just about 18 times less money than gold. The physical demanded is estimated at $15.2 billion a year. This makes it possible for an investor or large trader to positively or negatively influence the price of silver. A prime example of an investor is Warren Buffett. Warren Buffett purchased 130 million Troy ounces of silver at about $4.50 an Troy ounce. Buffett then announced to the share holders that his company no longer held any silver on May 6, 2006. This kind of set a negative influence on the value of silver.
There are many ways a person can invest in silver. The buying of bullion bars is a traditional way of investing in silver. If you ever travel to Liechtenstein of Switzerland, you can buy or sell bullion bars over the counter at the cities major banks. Bars and coins are physical silver. They should be stored in home safe, placed in unallocated or allocated storage with a dealer or bank, or placed in a safe deposit box at a a bank. The code “XAG” is used when ... Read More...
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Silver bullion can be bought in the form of silver bars, coins, or rounds. Silver bars can be bought and sold over-the-counter at banks, in countries like Switzerland. Silver bars are available in various weights: 1000 troy ounces, 100 troy ounces, 10 troy ounces and 1 kilogram bars. Bullion coins are very popular, due to the availability of the coins and the potential for scoring extra value, due to their desirability as collectors’ items.
Junk Silver and Fine Silver
Depending on the date of minting, silver coins can be either fine silver, or junk silver. The classification is dependent on the percentage of pure silver in the individual coins. Because of the fickle collectors’ market and the large number of pre-1964 junk silver coins, it is a bit risky investing in junk coins for retirement purposes. Since most of these coins have little or no value as collector’s items, they are only valuable as silver bullion. This is why the purity of the coins is an issue.
For this reason, you should rather consider investing in American Eagle Silver dollars for retirement. These coins are made by the US Mint and contain 99.9% silver. They are aesthetically pleasing and the “Walking Liberty” design is a popular one among collectors and the general public. Even if the face value of $1.00 is worth very little, due to a depression and devaluation of the currency, the high percentage of pure silver will always have value – due to industrial and tra... Read More...
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Using silver coins for investment is a relatively safe, secure method of investing your money. In many cases, it is more stable than investing in property, and often yields a greater profit than investing the same amount of money in gold. As with any investment, there are risks involved, and you need to have patience, and never be in a rush to sell your silver coins at the wrong time.
Historical Use of Silver Coins
Silver has been used as legal tender in various countries and cultures for well over four thousand years. The price of silver per ounce, used to be linked to the price of gold per ounce, by a fixed ratio. In the USA in 1792, this ratio was 1:15, meaning that one troy ounce of gold was worth fifteen troy ounces of silver.
In the 20th Century, this ratio was not fixed, and the average ratio was 1:47. The price of silver has risen and fallen rather erratically over the last 100 years, and is a lot more volatile than the price of gold. This translates to a greater chance of making a big profit.
Although the United States stopped using the silver standard in 1893, silver still played an important part in the economy, especially during the early 1980′s. Due to the growing federal deficit, the Defense National Stockpile of silver was gradually sold off and minted into American Silver Eagle coins from 1986 onwards.
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