By Kwok Cheung
We have actually been focusing on gold in this article, but much of this discussion uses to silver. Silver is somewhat different from gold in that it is a hybrid financial investment. It is both a precious metal investment and an industrial commodity. About half of silver’s production each year is consumed for industrial purposes.
This indicates that it is likewise much more vulnerable to downturns in products prices caused by financial downturns. That bodes terribly for silver. It is also cheaper and easier for many people to buy and is very much considered a financial asset. Even our coins were made from silver up until 1965.
We anticipate that the monetary worth to keep silver will be a great substitute for gold, but in an extreme economic slump silver will not track gold as well as it does now, given that industrial demand is still extremely high. One offset to the downward pressure is that silver is greatly mined as a by-product from other metal mining, most notably copper.
Over 70 percent of silver production is as a by-product. So when the demand for product metals such as copper falls, so will manufacturing of silver. This will help balance out some of the downward pressures on silver. The bottom line is that both gold and silver will do really well. There might be times when one outshines the other, but at the top of the aftershock, gold will be king and silver will be the prince. No matter which precious metal you personally choose, the globe thinks about gold as first and silver as number two (think about the Olympic medal standings of first and second-place medals as the comparison).
A Method To Purchase Silver Quickly
Retail coin stores (online or in your neighborhood) often charge a much greater sales commission or “spread,” commonly ranging from 3 to 6 percent per ounce. One means to avoid this is to get silver exchange-traded funds (ETFs), which are traded like stocks on the New York Stock Exchange with the rate roughly one-tenth of the price of an ounce of silver, making them a very fast and convenient way to buy and sell silver.
On the scene in the fall of 2005, silver ETFs now hold even more than 1,000 loads of silver. The most preferred ETF is SLV. Its latest competitor is PSLV. It holds physical silver as well.
Silver ETFs have some tax disadvantages and expenses, but their trading convenience and little entry point make them fairly prominent with investors at every level. ETFs can likewise be bought on margin, though I do not advise doing this. Silver ETFs are safe in the meantime but could become less safe in the future, at which point owning just physical gold and silver will be best.
For more info about silver prices, check the reference here.