Apr 2012


Apr 2012

Buy Silver

By StoneX Bullion

Buy Silver as Investment

There are different categories of people who buy silver. One category is that of the persons that view precious metals, and silver implicitly, as a safe guard against economic situations like inflation and different devaluations of different currencies. For them silver is a way to make sure that their money is not being kept just in one or maybe two currencies. Therefore, to buy silver is to buy security for your assets.

Another category of people is that of large traders and investors. When these people buy silver they can actually influence the evolution of silver prices. The example that remained in history is that of the Hunt brothers. They were the perfect example of people that decided to buy silver in such an impressive quantity that the price of silver unbelievably increased from US $5 per troy ounce to US $49.95 per troy ounce in a short period of under a year. This historical number was almost reached in 2011.

We should also not forget about one big category that buy silver in enormous quantities. We are referring to different industries that use silver for his unique qualities. 40% of the production of silver goes to the jewelry industry, the electrical appliances manufacturing industry, the dentistry one, the photographic industry, the industry manufacturing water filters, and so many others.

Buy Silver in Physical Form

There are two forms available to buy silver in its physical form: coins and bars, just like it is the case with gold too.

In many countries silver coin are used as legal tender which is a legal payment method. Also, regarding coins, silver is a precious metal that has been used in manufacturing them since coinage appeared. Silver coins are a great way to buy silver because they are cheaper than gold therefore are affordable to many people and can be bought in large quantities. The most popular silver bullion coin is the American Silver Eagle which has a purity of 99.90% silver.

Silver bars, another alternative to buy silver in physical form, come in a wide variety regarding their sizes. They are produced from bars that weigh 5 grams to those that weigh 1000 troy ounces. Silver bars are a great alternative for investors due to their small premium over the silver spot price. Investors prefer to invest into bars that weigh above 100 troy ounces because the cost for these ones is lower than if they were bought in smaller quantities.

Buy Silver in Non Physical Form

This category also offers a lot of choices for investors that desire to buy silver in a nonphysical form. The first of these tools is to own mining stocks which come in handy and are profitable when the silver price increases. Usually, investors do not focus on one mining company, preferring the diversified mining funds.

Another way to buy silver are futures and options which are also known as derivatives and are traded on the COMEX. It is a preference for active traders that study the evolution of silver on the market every day and that mostly speculate on this evolution.

The last alternative to buy silver is the ETFs which are also designed for speculation and some of the most known are the iShares Trust, the ETFS Physical Silver, and the Sprott Physical Silver Trust.

As noticed, the price of silver has been on a positive evolution. If we were to consider that the price of silver has increased by 84%, we could even state that it is an astounding evolution which did not pass as unremarked by investors and traders who more and more decide to buy silver.