Rate

We hear a lot about the stock market and gold in the nightly financial news. What about silver? Most people do not realize it but silver offers many of the same safe haven characteristics that gold does. The difference is gold currently trades at over $1200 per ounce while silver’s current spot price is about $20 per ounce. If you cannot afford gold but want to get into precious metal investing buying silver is your answer.

Silver at $20 per ounce is indeed quite a bargain. The price has come down from its high of $50 per ounce. This is mainly because of the continued debt saga playing out in Europe. The euro has weakened and as a result the dollar has become stronger. When the dollar strengthens, silver and gold typically see a decrease in price.

Some investors have run toward the stronger dollar as a safe haven. However, the European debt situation is starting to stabilize meaning the euro will become stronger and the dollar will decline, or correct at the very least. Silver will increase as the dollar becomes weaker, so buying silver right now just makes sense.

Gold is the traditional hedge for investors when they seek protection from inflation and risky stock investments. As mentioned, not everyone can afford to buy gold. While silver does provide a hedge against inflation, it is more volatile than gold. However, this can be used to the advantage of savvy investors. Speculative profits from silver’s price swings can reap significant financial gain if done right.

Keep in mind that silver has many industrial and retail uses, which increase its demand while lowering its supply.  As we all presumably learned in Economics 101 or somewhere along the line, when the demand for a commodity or finite resource is high, and its supply is low, it will command a higher price.  Silver is also in high demand globally.  China, for example has quickly become the second largest consumer of silver worldwide, as both their industrial and investment demand has skyrocketed over the past year.  The government in India has imposed tax and import restrictions on gold, which has led to an increased demand for silver within their financial sector.

Here in the United States, the demand for silver, either in the industrial or financial realm, has not waned.  The future of our economy is yet uncertain, as the dollar fluctuates in the face of foreign currency instability.  People want something tangible, something they can hold.  Even the dollar itself has become digitized with much of our nation’s money taking the form of plastic debit cards.  Precious metals give us the sense of stability – of something solid; and silver provides a low entry point.

A great way to get into silver investing is to buy American Silver Eagle coins. These bullion coins are minted to high standards and have the backing of the US government. The Silver Eagle was first struck in 1986 and offers a nominal value of one dollar. Naturally, it is the silver content along with the silver spot price that interests investors. Proof versions of the coin are minted for coin collectors.

Finally, gold has historically been used as a hedge by investors. Yet, not everyone can afford to purchase gold. Silver offers the same safe haven properties as gold, but costs much less to invest in. Silver does differ from gold in that it tends to be more volatile.  Yet, it is this speculative factor that makes silver investing so profitable. If you thought you had to miss out on buying precious metals because gold was out of your reach, silver is as good as gold.