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When the economy is bad, people look at ways to make money or perhaps save the wealth they already have. There are different ways to invest in silver, the most common way is to buy silver bullion coins or bars. You can buy silver bullion from different places like coin dealers, precious metal dealers and even pawnshops. You should avoid collectible silver coins because they are expensive to buy and do not yield high returns when you decide to sell. When buying collectible silver coins, it’s about looks. Essentially you are only paying for the aesthetics.
Like most things, there are advantages and disadvantages for owning silver bullion. The first most important advantage is that silver coins and bars are tangible assets. You can touch your silver, move it around and do whatever you want with IT.
Silver has a lot of uses and industrial benefits
The demand for silver mainly comes from industrial and investment customers. It is estimated that around 11% of the silver demand comes from industries. According to the U.S Geological Survey 29% of silver goes to the electrical and electronic industries. Silver is one of those metals that is used more industrially than any other. This means that whatever the economic outlook for the global economy can affect the silver price AUD.
The U.S. Geological Survey the global use of silver in industrial applications stands at:
- 29% for Electronic and electrical applications
- 25% for the making of coins and silver medals
- 8% goes into photography
- 7% of silver is used in the manufacturing of silverware and jewellery and about 31% goes into the making of other applications.
The LBMA (London Bullion Market) is recognized as the global benchmark for the silver spot price. Spot prices are set in U.S dollars every day at 12:00pm. If you are looking to buy and sell silver in Australia, you will have to convert to silver price AUD. COMEX Futures are traded for 24 hours but there are no wild deviations between COMEX and LBMA prices. Silver prices are more volatile than the price of gold. This is because there is growing demand for silver in the industrial, automotive and electronic markets more so than the use of gold in any other industries.
Future’s contracts
In an unstable economy, investors might look at silver bullion investments more favourably because they are an excellent hedge against inflation and easy to offload when owning them becomes too inconvenient.
You can buy silver from a local gold dealer that is convenient for you. They may offer easy, instant transaction but selling them at a good price might prove more difficult. You end up paying money and commission fees for silver you might not actually ever own.
The bottom line is that no matter how you decide to invest in silver, history is on this precious metal’s side. However if you are looking for a silver investment opportunity with greater return and low risk exposure, then silver is ideal. Silver has stood the test of time. Historically, it has been the go to metal for savvy investors.
