Despite some bearish forecasts, analysts still believe silver is a great investment. For many, we are still heading for a world where paper assets will be substituted for physical ones like silver. It’s likely the price will reach new highs as demand is expected to blow up as it will overwhelm supply.
The silver investor recently saw the precious metal at a decade low. Some have actually swapped out their silver for typical S&P and Dow Jones stock. The more faithful are wisely holding onto their portfolios, knowing at some point things always turn around. The CPM Group is a commodities research and asset management firm providing independent studies. They have reported silver prices reaching record highs within the next decade. This despite silver prices averaging 20 percent less than a year ago.
Investors should continue to look at the silver market positively. Market conditions will improve and there will be strong capital appreciation alongside the rising industrial demand for silver. In that case, prices will drive up rapidly.
Silver has far too many applications to ever be out of demand. It is the second most useful property in the world, second only to oil. That is the major reason why investment grade silver will never fall too short in the market. The demand is always going to be there. This leads to another reason why silver is never going away. Right now there is less investment grade silver on the entire globe for the purposes of investment than gold. If everyone on Earth decided to buy quality silver, each person would only be able to own 1/14th of an ounce for enough to go around. This is because the demand is so great that for decades mined silver has continuously been used up while inventories of the precious metal have hit near record lows.
Regardless of the market, investment grade silver is always going to be wanted.
Silver coins are a popular and convenient investment. There are four types:
- Silver Bullion contain a fineness of .999 or higher. They have a two way buy and sell price determined by physical investment grade silver of market price.
- Numismatic silver coins are favored by coin collectors, as opposed to market investors. The values are subject to factors that are also attributed to collecting fine art.
- Semi-numismatic silver coin values are primarily founded in purity and partially in semi-collector coin values.
- Pre-1964 junk silver coins are definitely more on the collector, not investor, side. These are old coins such as Franklin half dollars, quarters, dimes, Morgan dollars and more. Their values can vary.
An investor needs to determine their investment objectives. They need to establish where they want to store their coins. They also have to account for certain product factors like ease of liquidity, premiums, sellback privacy and private contract rights.
American Silver Eagle Coins
The U.S. Mint recently reported that the sale of American Silver Eagle bullion coins reached an annual record. This despite overall silver prices falling nearly 30 percent in the same time period. Authorized purchasers ordered half a million coins, a full weekly allocation. This made year to date total sales 40.175 million ounces. That surpassed 2011’s annual record of 39.868 million ounces.
Smart investors are giddy about the favorable pricing, increasing demand for physical silver. During 2012, prices have dropped 11.7 percent. Up until September 2013, silver prices were averaging 20 percent lower compared to 2012’s same period. These circumstances generated a buyer’s market for investors who trust a turnaround is always down the road.
The American Eagle Silver coin is minted yearly and is a popular silver bullion coin. They have a historical design, a high quality finish and contain pure silver. Lady Liberty adorns the front and the rear is the iconic eagle holding an olive branch and arrows behind a shield. The 13 stars are representative of the original colonies. They have always been an affordable and convenient means to invest in precious metal.
American Silver Eagles can be identified via the following traits:
- The weight of each coin is about one troy ounce of 99.9 percent pure silver. This makes the coins easy to transport, store and trade.
- Silver Eagles are easy to value since the price essentially tracks global silver prices.
- The American Silver Eagle market is highly liquid. Since its inception in 1986, there have been at least 335 million coins produced by the U.S. Mint.
- Silver Eagles are solid investments for IRAs, offering an additional tax incentive.
Regardless of market conditions, souring on silver bullion coins would be a mistake.
Silver in Industry
Throughout the world, silver is an industry unto itself. There is no branch of business that doesn’t have some use for it. From chemical producing catalysts to non-corroding electric switches, the unique elemental properties of silver are being utilized.
Electricity is one of the most important applications in the world, not just global industry. Not many are aware how dependent electric power is on silver. There are silver contacts in circuit breakers and switches. In fact, these contacts are standard control panel components in chemical industry processes, machinery, railway traffic controls and elevator buttons.
Silver oxide and zinc batteries are the chosen power source for aircraft, submersibles and television and film crews. They have twice the capacity of lead acid batteries. Silver outperforms other substances by withstanding higher temperatures like the heat found in oil wells. Radiography makes great use of silver. It is used in superconductors and the process of wood preservatives. It would be difficult to find an industry that is not using silver in some capacity.
These are only some of the industrial applications for silver. It has definitely seen its peaks and lows, such as recent dips in silverware and photography production, but the overall demand is too great to ever underestimate silver as an investment.
Strong economic growth has seen countries around the world undergo rapid urbanization, a leap in both consumer spending and infrastructure. This expansion has led to industrial growth, which is highly dependent on the silver market to sustain itself. Trackers like the Silver Institute are predicting an uninterrupted growth period for industrial silver through to 2015.
Silver bars are considered a convenient investment as they are easy to handle and store. Their size allows investors to maintain a large amount of wealth in relatively small storage spaces. They are also recognized hallmarks that can be converted to cash without a lot of trouble. There may be minimums for purchasing silver bars.
The average 100 ounce silver bar is .999 fine. The most popular types are Academy, Johnson Matthey, Ohio Precious Metals and the Royal Canadian Mint. Though no longer produced, Wall Street Mint silver bars are still available. Some investors keep an eye out for Engelhard and Sunshine Minting bars, which are no longer in production.
Silver bars are shipped to the investor. They will need a secure storage space for them.
Investing in silver is a secure and proactive way to both protect and grow wealth. It is one of the most highly sought after precious metals in the world. They cyclically revalue themselves, making them pretty much foolproof investments.
Of course, investing in silver is not for everyone. A savvy investor will look into the market and its possibilities before dipping their toes in the water. Taking a look at the information on a site like Monex Precious Metals can be extremely beneficial to the interested investor.