Many people seem to under-appreciate silver as an investment. While gold, platinum, and other precious metals generally take away all the glory as some of the best forms of investment, silver, on the other hand, has always been a form of money for more than 4,000 years. In 1935, silver finally lost its role as a form of money from every part of the world. Nowadays, it’s a great form of investment. They are used in making jewelry, minted bullion, and collector coins, like the American silver eagle. One of the prime uses of silver, due to its properties, is in industrial sectors as it is used to manufacture various final products.
Types of silver investment
Every year many investors and collectors buy millions of silver bullions such as the American silver eagle, Canadian minted silver maple leaf etc. There are many other forms of silver to invest in, like jewelry, silver bars, etc. One of the popular silver investments is the 10 oz silver bar, and investors or collectors generally collect them in bulk. There are collectors of silver and other precious metals. These collectors have different requirements and ideas about why they are collecting silver. Some may collect it for investment, or some may have any other motivation to do it.
Why is an investment in silver good?
Silver, like any other precious metals and natural resources, is considered a commodity. It is publicly traded and is a tangible asset. Generally, tangible assets move opposite from stocks and bonds. When the stock market performs poorly, most investors turn towards commodities and precious metals like silver. Silver has a long-term value and is always expected to hold its value even if the market is not performing well.
Price of Silver
Just like any other tangible commodity, the price of silver is very volatile. Its small market, demand fluctuations, and less market fluidity result in changes in the price of silver in the market.
Some of the risks involved while investing in silver
No investment comes with all rewards; likewise, silver has its part of the risk.
- Limited or low income
Silver being a tangible commodity doesn’t give huge incomes like stocks or bonds. You will get a good reward if you sell it while the price is high.
- Dependable on industrial and technological changes.
Other than being an investment metal, silver is also an industrial metal. And if in future years it loses its place or some other metal substitute it in the industrial sector. It will result in a decline in its value.
Comparison between gold and silver as an investment
This comparison between gold and silver has been there for years, and it is natural, as both are precious metals and have the same tangible commodity strengths. Still, there are many differences between them, which is important to know before investing in them.
- Prices of silver are more volatile than gold. The silver market is heavily dependent on the industrial use of silver, and it is also smaller than gold. It leads to greater volatility and price swings.
- Gold is a more liquid asset than silver. There might be some difficulties finding the buyers for silver but searching for a buyer is always easy for gold.
- Silver is comparatively cheaper. To invest in something, it is necessary to buy it first. Even if both are precious metals, the cost of gold is way higher than silver. It makes silver more affordable, which is better for small investors.
After considering all these factors and possible risks, silver could be a suitable investment if you have some experience in the market.