Silver is a metal substance that has been used for thousands of years as a currency for trading. The metal is considered a precious material around the globe and, in terms of monetary and trade value, is considered the biggest competitor of gold. At the time of writing, silver is trading at $15.74 per ounce, a 0.91% reduction in the price over the past 24 hours. Even though on a downward trend at the moment, silver has grown in value by 222.27% within the last 16 years, and reached its peak or highest price per ounce on the 18th of January, 1980, when the material traded at $49.45 per ounce.
Due to silver trading at a very low rate at the moment and continuously declining in value, there are many people with concerns, unsure whether or not this material still remains a good investment, and if they should rather take their money and invest in another material or investment opportunity.
The good news is, silver is a metal that has been used not only as a currency or trade material for thousands of years, but it also plays a role in the production of electronics and many other objects, especially in the modern world. With manufacturers coming up with new ways to utilize silver in their products, it is clear that the demand for silver isn’t going anywhere.
In this post, we are going to explore the current position of silver, consider the different ways that you can invest in silver, and also look at why silver still remains a good option for people looking for an investment that could pay off over the long term – especially in cases where a person may consider investing in silver coins and Bullion bars.
The Current Position Of Silver
Let’s start by discussing the current position of silver. As we already explained previously in this post, silver is currently trading for less than $15 an ounce – a price that many would consider low, since there was a time where the price of a single ounce almost reached $50. During the last few days, at the time when we wrote this article, the price of silver has also gone down significantly.
Does this mean that silver is going anywhere? No. Sure, the price may drop, but take a look around you, and you will notice that silver is in high demand. Silver is used in a lot of different applications, ranging from industrial settings to jewelry, and the metal is even used in some food items, as well as in medicine, where silver is known to be a powerful anti-bacterial substance.
Since silver is one of the best metals in terms of electrical conductivity, as well as when it comes to thermal conductivity, the metal is still widely used in many electronic products, as well as products where a distribution of heat is required.
While silver is certainly a popular metal used in industrial applications and even in the construction of various products that consumers use on a day-to-day basis, the metal also poses as a potential investment opportunity to many people.
While the discovery of silver has not been well-documented, it is known that silver was one of the few metals used by people of prehistoric times. There were times when silver was considered a much more expensive metal compared to gold, such as in Egypt, where silver remained a more valuable resource than gold up until the fifteen century.
What Influences The Value And Spot Price Of Silver
The spot price of silver, a term used to describe the actual value of silver – without any commissions added – can be affected and influenced by quite a large number of factors. It is well known that certain authorities, with a particular focus on the JP Morgan Bank, has the ability to drive the price of silver up or down, depending on their demands and needs. There are, however, other types of influences that affect how much you should expect to pay for a silver coin or perhaps silver commodities on a trading platform.
Currency markets are known to have a significant impact on the price of silver, for example. When the dollar becomes stronger, for example, a person from a country other than the United States might be expected to pay more for silver. On the other hand, as the dollar becomes weaker, one is able to obtain silver for a reduced price with the right currency matches.
Mining output can also influence silver’s value on the market. As silver becomes a more sought after resource, more-and-more people are investing in mining this metal. The amount of silver that is mined has an effect on the price of this metal. When silver is scarce, and mines do not produce a large amount, the price of the metal is usually pushed up. When mines are able to produce more silver, the price often tends to fall.
There are other factors that also impact silver’s price, including:
- Geopolitical influences
- Monetary policies
- Risk appetite
- Risk Aversion
All of these factors combine in order to ultimately produce a spot price that will provide you with a price that needs to be paid in order to purchase and invest in silver.
Different Ways To Invest In Silver
Investing in silver is often considered not as simple as making an investment in a currency pair, such as setting up a forex account to trade a USD/EUR pair. In the modern-day, however, multiple options are presented to the average person looking to invest in this metal – ensuring that silver can be used as an investment opportunity not only by those looking to invest millions of dollars at a time but also by those who are searching for smaller options that they can invest in.
The traditional method of investing in silver still remains – which include buying actual physical silver, storing the metal and then selling for a profit when the price increases. Today, one would opt for physical silver in the form of silver coins, or perhaps bullion bars. These are sold at specific weights – the heavier the coin or bar, the more it will cost.
In most cases, when you decide to buy physical silver, you will need to find a location to store the bars and coins safely. It is often a good idea to buy a safe when storing these coins at home. This way, you can be sure that your investment is kept safe and away from thieves, even in the case of a break-in. The safe would ideally be placed in a non-obvious location.
In addition to being able to invest in silver by buying physical bars or coins, there are newer ways that people also use to invest in this commodity. ETFs are considered a practical way to invest in silver for people who do not wish to maintain their commodities for too long – ETFs are purchased through a trading platform that supports the appropriate commodities, the position is held and can then be sold as the price of silver fluctuates. With ETFs, there is no need to hold on to any physical objects, as the entire transaction is done digitally through the trading platform.
Both of these options that can be utilized to invest in the silver market has their own pros and cons that should always be taken into consideration when trying to determine the most appropriate option to choose.
As an example, when buying physical silver bars or coins, there is often a commission rate associated with the purchase, and a storage location will be required in order to keep these possessions safe. When investing in a large amount of physical silver, a lot of people have to rent safes at their local bank – this can incur significant charges every month, which essentially cuts away from the profit that the individual will be able to gain when they decide to sell their collection of silver coins or bars.
ETFs also often require payment of commission – often per transaction. When trading with ETFs, a person would usually be required to pay the forex exchange agent a certain fee for every transaction they make. In some cases, these fees are fixed, but there are also cases where a percentage of the trade value needs to be paid.
Furthermore, with ETFs, the selling price of silver is often higher than the spot price. When deciding to sell these commodities, you will usually also find that the buy price is much lower than the spot price.
Why It Is Still A Good Idea To Invest In Physical Silver
While millions of people used to invest in physical silver in the past, this statistic has drastically reduced, especially in modern times as ETFs have become popular. A lot of people who are interested in investing in silver are rather turning toward ETFs in order to make a quick buck since physical silver usually requires you to keep your silver safe for extended periods of time in order to truly profit from your investment.
Even though ETFs are becoming more popular, it is crucial to understand that physical silver still holds a lot of value. There are many reasons why it is still important to consider physical silver as an investment opportunity, especially if you are looking to make a more significant investment in terms of monetary value.
How To Invest In Physical Silver
Investing in physical silver is not a difficult task, but finding an appropriate agency to buy the physical silver bars and coins from can pose as a challenge. There are many companies out there that offer you the ability to buy such physical commodities, but it is important to note that not all of these companies are trustworthy. A lot of people have been scammed, thinking that they were about to buy real silver coins – either these people never received the coins or bars that they paid for, or they received coins that were not made from real silver.
This is why initial research should play a crucial role in the decision-making process when it comes to investing in physical silver. When interested in buying Bullion bars and coins, start by looking for companies that are trustworthy. Consider looking at a few reviews on the internet in order to find which companies can be trusted.
Once you find an appropriate company, be sure to request details on the current sale price of silver – companies charge different commission rates for these sales, so find a trustable source that will not add too much commission fees.
After buying physical silver coins or bars, you will need to ensure you have the ability to store them safely. There are multiple options that you can choose from when it comes to storing Bullion coins, as well as real silver bars. You can choose to buy your own safe and keep them safe in a secure location in your house – add all of the physical silver you buy in the safe and be sure to set a secret password that no one, except yourself, knows.
An alternative option is to contact local banks and see if they offer you the opportunity to rent a safe. These safes can greatly improve the security of your possession – including your silver bars and coins – but they do come at a cost, so that is something that you should definitely keep in mind.
Even though silver has been declining in value for some time now, there are still many reasons why you might want to consider investing in this particular precious metal. The downward trend in the metal’s value is often contributed to by companies, such as the JP Morgan Bank, manipulating the market, and does not guarantee that the metal’s price will remain low. People are advised that they should not overlook the potential investment opportunity that commodities like silver coins and Bullion bars hold, especially when looking for a way to invest and profit over the long-term.
To find out more about Gold you should check out this article – Why Gold & Silver Are A Good Investment