Silver, as a precious commodity has experienced a sharp rise in price increases, placing it into a “Bull” market. It is predicted to eventually top a hundred dollars an ounce, and the reasons are not simple speculation. It is speculation that creates bubbles and makes things unwise to invest in. To be secure in any investment you need to know why the price is going up and what might cause the price to plunge.
Silver, like gold, acts more as a currency then a commodity. This means that it can be spent and traded much as money can be. While gold has increased in value because of demand and speculation on that demand, silver is increasing in value because of its industrial applications.
Even though in the 1800’s there was a silver standard and there are many languages that have the same word for silver and money (indeed it has been a currency as far back as 550bc), the industrial revolution turned silver into a metal that is used in many everyday applications.
This means there is no stockpiles of silver like there are of gold.
Is then silver a safe investment even though the price is climbing? Yes. Silver is being used up at an astonishing rate. There has been a lack of investment in finding new sources of silver and ever increasing demand for silver on a practical level. The demand is not speculation based, but rather cemented in a real use by industry.
While Christian Silver has historically been more plentiful then gold, and thus was a easy metal to forge into durable coins that could be traded for flat value, today the demand for silver means that an ounce of the metal can get you far more then you used to be able to get. These are all reasons why Christian Silver is considered a safe investment.
How Silver is a Better Investment Than Gold
When it comes to precious metals some of the most popular includes gold, silver and platinum. These are popular for a variety of reasons, and silver remains at the top of that last coming in behind gold as a hot seller. Buying precious metals has long been thought of as a way of diversifying one’s portfolio and as a hedge during economic downturns. As a result, silver is currently being sold at record high rates of around $1700 to $2200 an ounce. With the market volatility, silver as an investment remains one of those metals that’s good to buy, trade and save as a hedge against inflation.
Inflation happens when a country in fiscal difficulty prints more paper money in order to pay debt. This has the effect of devaluing the dollar making it take more money to buy the same products. With precious metals this doesn’t happen, because they are said to have an intrinsic value not changed or affected by how low the dollar falls in value. For instance, in 1971 to 1981, the US dollar dropped. When this happened, silver increased in value almost five times. This is not considered unusual, because unlike gold, silver is also used in the industrial market as catalysts in chemical reactions, as part of batteries, bearings and electronics to name a few. There are also a lot of medical applications, not to mention the increasing demand coming from the solar power market.
Jewelry, photography and currency have long been made of silver with collectible silver bars remaining extremely popular. Silver bars are good as collectibles, as gifts and a source of market stability during lean times. These bars are compact, easily stackable and are easy to transport. Like jewelry, these bars come in different weights and levels of purity minted from longtime, reputable mints. Silver is one of those metals that’s extremely flexible in use: industry, jewelry and commodities trading.
Why Invest in Silver?
The concept of investing in silver is nothing new. Investors and traders have long since been investing in this precious metal for centuries. Granted, the modern way of investing in silver is a bit more refined than actually going out into the mountains to prospect for the shiny metal. However, the motivation to acquire silver is still as strong.
Why is this? There are a few factors which weigh into why silver investing still remains so popular. Among those factors are:
While silver prices are on the rise, they have not risen outside most investor’s range of affordability. As such, access to silver is greater than is access to gold. This expands the popularity of investing in silver because more people are able to do so. In some ways, those unable to reach into the gold investing market will take silver as a second option. Ironically, they might discover they made a better investment in silver than what would have been the case had they invested in gold.
Silver prices will invariably go up as the value of currencies goes down. The notion that currency prices will go up or down can be based both on a mix of established factors as well as speculation. Either way, if an investor believes there may be issues with the value of currency on the horizon, investing in gold might prove to be the best option to explore.
Hedging is always a reason why some will look to put their assets into silver. Stocks, bonds, currencies, and real estate all come with risks. While silver investing is no exception to this, the fact remains that silver has proven to be very stable over the past few years. This makes it a wise asset to use as a hedge in a portfolio.
And, in some instances, people invest in silver because they like to. For such investors, that is reason enough.
Learn how to buy silver as an investment to hedge your portfolio against inflation.
