Should you take advantage of current silver prices?
Less than three years ago, silver prices were low it was selling for around $9 per ounce. Today, silver prices have increased 385% in value. In this year alone, silver prices have doubled. On April 29, 2011 silver hit a 31-year-high topping out at $49.21 per ounce. Perhaps you’re wondering about silver prices these days and whether you should invest in silver. If so, how should you go about buying silver? Here are some answers to questions that you might have related with silver prices.
Will silver prices continue to rise?
The U.S. Mint has sold more one-ounce Silver Eagles (a type of silver coins) in January 2011 than in any other month since 1986. The demand for silver is very high these days. However, most Americans still don’t own any gold or silver. So, there should be more demand in the upcoming months and years as more and more people consider silver as an investment – which will further impact silver prices.
Another factor behind the increase in silver prices is the shortage of silver in the world. Industrial uses for silver has also increased – the metal is used in many things, from medical instruments, electronics, food processing, building materials, and many more. Silver is also considered as a precious metal and is the most used precious metal for currency worldwide. For these reasons, the total global demand for silver is about 890 million ounces a year, but mine production only comes up with 720 million ounces of silver a year. The high demand and low supply of silver is probably a good indication that silver prices will continue to rise as long as mine production is unable to keep up with demand.
Is silver a good investment?
You always hear about how gold is a good investment. This is also true for silver. However, silver prices can be volatile. You will have opportunities to pay cheaper silver prices and if you watch the market, you can sell it when silver prices are high and then you will make money. However, if the economy crashes, silver prices are more likely to suffer than gold prices because of the industrial uses of silver.
Some investors believe that people should invest in precious metals, including silver, as one-third of their assets. Now is as good time as any to take advantage of silver prices and strengthen your portfolio at the same time.
Ways to buy silver
If you decide that you want to take advantage of rising silver prices and buy silver, there are several ways to go about it. You have two basic options when buying silver – buy it and store it yourself, or buy it and have someone else store it for you.
Buying silver rounds, or one-ounce bullion coins, is one of the best ways to buy silver for investment. Silver has been used as a form of money for thousands of years. Some popular coins include American Silver Eagles and Canadian Silver Maple Leafs. Silver coins are easy to collect and are usually not very expensive to purchase. Silver prices for coins are expected to increase in upcoming years due to the silver shortage. Also, you can use silver rounds to fund an Individual Retirement Account (IRA). It’s getting harder to purchase silver rounds, ever since silver prices have risen and demand has risen even higher. The U.S. Mint is struggling to keep up with the demand these days, thanks to current silver prices.
Silver bars are another great option for purchase in order to take advantage of current silver prices. The premium, or mark ups, on silver bars is lower than mint coins. You can find silver bars easily in online auctions such as eBay, but be careful with counterfeit 100-ounce silver bars. It’s safer to purchase 10-ounce and other smaller silver bars. If you prefer to stick with 100-ounce bars, you should go to a mint – they will give you a certificate and the silver bar will be sealed in a plastic capsule. The plastic capsule shouldn’t be pierced at all to maintain the silver prices of the silver bar.
Silver funds, silver certificates, and ETFs are more convenient to purchase and sell if you want to profit from current silver prices but don’t want to worry about delivery or storage. Buying and selling of these things are all done through paperwork. But this method will be considered as an investment by the government, so you will have to deal with capital gains tax and possibly other taxes on top of the silver prices that you pay.
Above all, be sure to do your research and determine whether you want to invest in silver based on current and projected silver prices. Since silver prices are high these days, more people will be looking to get into the action – which can bring in the crooks who are looking to take advantage of your money. Learn everything you can about silver prices and buying silver before taking the plunge.
