The Place of Silver on the Precious Metals Market

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Silver: it’s one of the most affordable ways to get into the precious metals market and one of the most potentially profitable. This metal is as ancient in terms of its usage as gold, but it is generally valued at a small fraction of the price of gold. Before that much lower price on the precious metals market seems to you like a disadvantage of this particular metal, consider what it means.

Much is said in the media about the inherent value of gold and the practical value of gold. When it comes down to it, however, gold is really a financial metal more than anything else. It’s incredible scarcity and very high price make it largely impractical for anything other than being used as a store of wealth. On the precious metals market, silver occupies a much different place than gold, though it is every bit as established and trusted.

Silver is widely used in industrial processes. The low price of the metal relative to gold makes it viable for these purposes. This means that the silver market is driven by demand that never ceases. Silver is used in everything from silverware to high-end electronics to the most advanced medical equipment. Silver is a precious metal, but it is so much more common than gold that there is no practical reason that it cannot be used for everyday items. This makes it an excellent opportunity for people who want to get into the precious metals market for reasons other than betting against the economy doing well. In fact, purchasing silver is oftentimes a vote of confidence in the economy by the people who go ahead and make the investment.

Buying Silver
You may have seen information about trading in silver in the form of silverware, jewelry and so forth for money. Where investment in the precious metals market is concerned, this isn’t really the way to go. Any silver other than bullion – which is of a known purity and traceable to its source – is really not investment quality metal. On the precious metals market, the price given refers to metal that is 99.99% pure, which means that your average kitchen fork just isn’t going to cut it. Sterling silver is 92.5% pure, making it unsuitable for investment, though you may get some money by selling off your old silverware and jewelry for the metal.

Most people prefer to buy bullion or coins. Oddly enough, silver coin metal is usually 90% pure, but this purity is established by the treasury that produced the coin, making these coins suitable for investment purposes. Silver bullion is always at least 99.9% pure and is one of the most popular ways to invest in this metal.

There are other ways that people invest in silver. An ETF, for instance, is a type of fund that owns interest in silver and that people can purchase like they would purchase regular stocks. This is sometimes called paper silver or paper metal, if ETF products other than those specifically involved with silver are being discussed.

For most investors, however, purchasing silver in its bullion or coinage form is the best way to go. This allows them to hang onto their investment in a tangible form. It’s also easy to sell off if the markets go up and the investor wants to make a profit on what they purchased. It’s important to keep in mind, however, that silver is generally a long-term investment, though there have been various periods where the precious metals market have soared and where some people have managed to make good profits on short-term silver investment.