Sunday, October 01, 2006

Price of Silver

The price of silver fluctuates but is currently on a steady long term rise.

From around the 1800s until around 1979-1980, the price of silver was relatively stable around the one to two dollars an ounce range with the occasional minor fluctuation outside of that.

In 1979 it shot up like greased lightning to over 21 dollars an ounce. Totally unprecedented! In later years it gradually tapered down to the four/five dollar mark until recently when it has began a dramatic rise again.

There are various ways of accumulating or investing in silver.

One of the traditional ways is by buying silver bullion. This would be in the form of bars or coins. In some countries, such as Switzerland and Liechtenstein for example, these can be purchased "over the counter" at a bank, but in most countries you need to buy from a dealer or mint.

Bars come in a variety of sizes from one ounce bars all the way through to 1000 ounce bars, (about 68 pounds or 31kg in weight).

A traditional way of investing in silver is by buying bullion bars. In some countries, like Switzerland and Liechtenstein, bullion bars can be bought or sold over the counter of the major banks.

Coins have been used as currency for hundreds of years going back since man can remember. However, coins are no longer used as currency although still issued as legal tender in most countries. However they have become a popular form of investing in silver. Coins are easy and cheap to buy, easy to store and transport and, importantly, can be cashed in quickly in times of need.

Such coins as the 99.99% pure Canadian Silver Maple Leaf. Coins may be minted as either fine silver or junk silver, the latter being older coins with a smaller percentage of silver. U.S. pre-1965 half-dollars, dimes and quarters for example are 90% silver.

silver coins are also available as sterling silver coins, which were officially minted until 1919 in the United Kingdom and Canada, and 1945 in Australia. These coins are 92.5% silver, and are in the form of (in decreasing weight) Crowns, Half-crowns, Florins, Shillings, Sixpences, and threepence. The tiny threepence weighs 1.41 grams, and the Crowns are 28.27 grams (1.54 grams heavier than a US $1). Canada produced silver coins with 80% silver content from 1920 to 1967.

Some hard money enthusiasts use .999 fine silver rounds like the Liberty Dollar as a store of value. A cross between bars and coins, silver rounds are produced by a huge array of Mint (coin)mints, generally contain an ounce of silver in the shape of a coin but have no status as legal tender. Rounds can be ordered with a custom design stamped on the faces or in random assorted batches.

Some Swiss banks offer silver accounts where silver can be instantly bought or sold just like any foreign currency. In this situation the customer does not own the actual metal, but has a claim against the bank for a certain quantity of metal as expressed in their silver account. A similar principle is practices by digital metal companies such as, for example. Where the one owns the gold but it is held in trust by GoldMoney who open an account for the client and record transactions in silver against that account. eLibertyDollar and Phoenix Silver are other companies that specialise in silver for clients silver accounts, and silver accounts are backed through unallocated or allocated silver storage.

There are other methods of owning silver, such as certificate or Exchange Traded Funds but the favourite is where a person can actually own silver itself either in trust or in their own hot little handles.

It is quite likely, although not guaranteed of course, that the price of silver will continue to increase in the long term. So when buying silver, in whatever form, it is important that one does patient due diligence and learns as much as possible about that wonderful shiny silver stuff we call silver.

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