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Silver - As Investment

It's the second most widely-known precious metal. Silver is more affordable, so many call it "poor man's gold". But, it's not just the poor that choose to invest in the shiny greyish metal.

Silver is a great way to save and it can also bring substantial returns-on-investment.

Silver bullion

Pure silver bullion coin on a silver bar

Source: ©

In September 2013, one could buy and ounce of gold for roughly 1,400 $, but the same amount of silver was obtainable at around 27 $.

Small investors should consider investing in this grayish shiny metal, if they can't afford gold.

Before you start buying silver, it's better to learn a bit about it and what better resource to help than this practical guide here?

Prime Values will teach you the main aspects here - and it's all so easy and free!

The Industrial Use of Silver

While gold is mostly preserved, silver is mostly wasted industrially!

The grayish metal is used in electronics, the car industry, the military industry and heavily used by the solard panel industry!

It's a great conductor of electricity and relatively cheap. In fact, it is cheap enough to use industrially, but "too cheap" to struggle to recycle, remove from old, used products (like cellphones, computers, car parts etc.).

It would be an illusion to believe that silver is as abundant as iron, aluminum or other "common metals". There is a misperception that it's "far more abundant in the ground than gold". In fact, many experts predict that the silver depletion will come much sooner than gold's!

Simply: we use silver to make various products and when we throw those products away, silver is thrown away with it. The huge amount of silver consumed and thrown away each year is in the tonnes! All wasted.

One day, there will be a time when there won't be enough silver to produce all those products that we require. As we're getting near to the depletion of silver reserves, we're seeing higher and higher prices for this metal.

The Medical Use of Silver

It's better to separate this from the "industrial use".

Due to its antimicrobial effects, the metal is used in medical applications - have you ever used one of those toothbrushes with a silver plaque on its head?

The most common use of silver in medicine includes: its use as an antibiotic coating in medical devices, silver-containing wound dressings, but the metal is also used in medication and implants, catheters, even breathing tubes.

In the past, they used to fill teeth with silver. Nowadays, ceramic materials have taken its place.

In a vast amount of cases, silver is irreplaceable, therefore heavy quantities of it are being consumed annually by the pharmaceutical industry.

Obviously, almost all of this silver gets eventually "thrown away".

Gold to Silver Ratio

The GSR, as it's quite often quoted is the ratio showing how many ounces of silver it takes to buy a single ounce of gold.

The gold to silver ratio fluctuates. The smaller the number it is, the more valuable silver is in comparison to gold.

Throughout history, the GSR has seen the 10-15 range and has even neared 100.

Check this historic interactive gold to silver ratio chart and observe the fluctuations.

Most experts agree that the GSR will turn to silver's favor, once the global economic situation gets worse and, as silver gets more used up, consumed. As silver's price will rise, the ratio will reflect a lower figure.

In the summer of 2011, when silver reached a recent high price, the GSR dropped to 32 only! Otherwise during the 2008-2013 5 year-period, we've seen the GSR move within the 40's, 50's, rather.

Silver is Regarded a Better Investment than Gold

It's best researching why silver has a high profit-bringing potential. The reasons are various and there are a lot more than just industrial consumption and depletion of silver resources.

Fact is: silver's price on the market is a lot more volatile than gold's. Therefore, it keeps jumping up and down. Yes, it's unstable. It's not the kind of vehicle for preserving huge amounts of your assets. It's rather a tremendously profitable investment vehicle!

Ride the waves with silver like you can never do with gold. Buy low, sell high. Or simply, buy and preserve. In the long term, silver's price will eventually rise sky high and you will rejoice to have bought while it was still relatively cheap.

One of the best examples was the case of silver's price 9-10 $ in 2008, but in 2011 it has topped 47 $! Imagine the profits that you could have collected following an investment of 1,000 $? You could have earned 3,700 $ on top!
Of course, these are merely spot prices, we excluded commissions, VAT (in some countries), various fees, premiums that are always charged by dealers. Despite: the proportions would have been the same: 370 % profit, 470 % return-on-investment.

Silver's Price Has Risen Tremendously
Since the early 2000's

In 2001, silver's price was a mere 4-5 $, but has even traded within the lower part of this interval. 10 years later we saw silver peak above 47 $ an ounce!

The summer 2013 drop of precious metal prices did bring silver down below 20 $, but still - a long uptrend can be observed during the years since 2000.

This is not a bubble! Silver's price has been rising. Below you will find a chart by, which will vividly reflect the tremendous benefits of silver investments.

Silver is Still Undervalued

We don't know how high the price of this metal could go, but it is certain that it's still "too low". As we're consuming silver industrially, the metal is getting rarer. One day, silver will be far more valued than today. By then it will be so expensive to buy, you might not be able to afford it!

One of the best things you can do when investing in anything is choosing the right time to enter. Fluctuations are normal, but there's nothing better than having invested at the right moment.

While gold's price is relatively high, despite having corrected in mid-2013, silver is expected to rise much higher in the long term. Of course, no-one can predict for certain how high it will go. Some experts believe the 75 $ price level will be reached with ease, but many believe that silver will surpass even 100 $. More "exotic" predictions talk of silver above 500 $, even above 1,000 $!

Investment Silver Products - What to Buy?

There are two ways to buy physical silver: coins and rounds on one hand and on the other - bullion bars. Either are great, provided that you diversify adequately and that you manage to obtain the products at an affordable price over spot.

Bars and coins can are sold in various sizes with various denominations. The size of some of them is measured in grams, others in kilograms, others in troy ounces. Most often, coins are measured in ounces, while bars in grams.

Then there are silver rounds as well. They look similar to coins, but these aren't really coins. They tend to look more "rough" and are almost always privately-minted.

Choosing the right silver coin is essential. Here's a comprehensive guide.

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