Looking for a silver bullet to investment success? Silver is in a position to make some incredible gains in price in the near future, far more than gold. Precious metals are generally undervalued, but silver, with a spot price around $16, could easily double or triple in value as a combination of factors come to a head. The first is silver supply – industry uses more silver than gets mined every year, not to mention jewelry and bullion. Silver is an essential component in everything from smartphones to medical sterilizers, and it’s often unrecoverable. For years, industry has been making up the difference by buying silver bullion from governments like India and China – but now those governments have turned off the taps.
Before you start investing in silver, there are a few terms you should know.
Junk Silver: Junk silver is one of the cheapest ways to enter the silver market. It’s currency that has actual silver in it, but no numismatic value (i.e., it’s not worth anything extra to collectors of old and rare coins). In Canada, silver coins minted from 1920-1966 contain real silver, but aren’t old or rare enough to carry a major premium. There are some things to be wary of when buying junk silver, such as knowing when the Canadian Mint shifted from 80% to 50% silver content (1967 and 1968), but it’s largely a cheap way to start.
Silver Bullion: The most reliable way to invest in silver is with silver bullion available from silver traders like Silver Gold Bull. It’s available in coins, wafers, and bars, stamped with the name of the mint, weight, and purity. Buying larger quantities of silver bullion (such as bars instead of coins) and buying them online can reduce your premiums. Remember, minting ten 1 oz. coins costs more than producing a single 10 oz. bar. Silver traders like Silver Gold Bull will alsooffer special prices on silver coins and bars so you can pay lower premiums.
Silver Supply: The reason silver is such an investment opportunity is the silver supply. Understanding the economics of silver is the first step to learn how silver can increase your wealth in the long run. Most of the silver mined in the world is a by-product of mining other metals like copper, zinc, and lead. Only about 30 percent of silver is purpose-mined, much of it in Mexico. But processing silver is expensive and many mining companies are now looking for ways to reduce costs, especially with the price of silver so low, even though silver demand continues to outstrip supply. Mining companies are scaling back silver production and investing less in finding new sources of silver. In the coming years, economic fundamentals would say that the price of silver is due for an increase.
Silver should be part of any investment portfolio and it’s an absolute must if you’re considering precious metals. The key to succeeding with silver is patience – day to day fluctuations with silver tend to scare off jittery investors. Use silver’s volatility to your advantage or use dollar cost averaging to mitigate the fluctuations. There are many strategies for earning money with silver.