Wednesday, 10 July 2013

Silver Bullion as an Investment Opportunity

Besides Gold, no other metal has been as important of a bullion metal as Silver. Well regarded for its shine and chemical properties, Silver makes a great investment for precious metal investors looking to diversify their holdings. Silver has also enjoyed a long history and there is no reason to doubt its future as a major bullion metal. As you will find out, Silver is an especially attractive bullion coin due to its long history and its numerous use values.
Silver enjoys many important physical properties. It has a melting point of 1763.2 degrees Fahrenheit, making it stable under most conditions, but also easy to melt with the proper equipment. Silver has one of the highest rates of thermal conductivity, and also optical reflectivity. In fact, silver is a preferred material for premium mirrors. Silver was also instrumental in the development of early photographic techniques.
Silver has a long history of being used in a variety of applications, from minting coins to being molded into “silverware.” On one hand Silver is quite malleable and easy to work with. On the other hand it is a bit more sturdy than Gold, making it a better metal for certain applications. Silver does not tarnish easily, however, certain molecules, such as Ozone, can cause it to tarnish. It's important to keep this in mind when storing Silver as bullion.
Silver is also far more abundant than Gold or Platinum, but is in high demand for use in industrial applications and for making jewelry and other fine goods. This means that prices will likely remain stable and increase as time goes on, especially as people buy more electronics that use Silver.  Silver oxide is also used in batteries for small electronic devices, such as watches, because the material holds a charge for a very long time. Silver is also used for creating high quality musical instruments, medicine, and a wide range of other applications.
Further, precious metals, such as silver, are frequently used in jewelry and other luxury items. This is important, because the world's population is slowly growing wealthier, creating increasing amounts of discretionary income that can be spent on expensive luxuries, like jewelry. So as countries continue to emerge and populations find themselves with greater amounts of discretionary income, expect spending on jewelry to rise. And for an investor holding onto Silver bullion, that increase in price will result in big returns.
Mentioning all of these uses is important, because they create demand for Silver. And demand, in turn, will stabilize and raise the price for the metal. All investments are determined by market forces and when demand outstrips supply, prices tend to trend upwards. The high demand for Silver makes it a safe and stable investment, and can help hedge against declines in Gold or other precious metals. Remember, a basic rule of investing is to diversify your portfolio!
Silver also has a long and illustrious history. Silver was used by the Roman Empire to mint coins thousands of years ago, so its history as a bullion coin is well-established. Further, when the New World was “discovered” the Spanish quickly found that Silver was in exceptional abundance. The Spanish mined Silver literally by the boatload, and this abundance of wealth help shaped the course of history.
Now, it is believed that most of the world's Silver mines have been discovered. Yes, most likely more mines will be found, but the Silver “bonanza” has likely come to an end. In fact, analysts now believe that there are only 1 billion ounces of unmined silver left in the world, compared to 11 billion just a hundred years ago. This means that the increase in supply will slow, while demand will only continue to rise. And that means that prices should rise in the long run!
This long history has made Silver a very common bullion metal, and is arguably the easiest type of bullion to find besides Gold; plus it is affordable. Right now you can purchase 1 oz 2012 Silver Mexican Libertad Coins from bulliondeals.co.nz for only  $38.53 NZD. If you are looking for the always popular American Eagle silver coins, you can pick one up for only $39.03 NZD, which is actually less than current prices being offered by the U.S. Mint!
Silver bullion definitely warrants a close consideration by any serious investor and can help hedge against declines in the stock market, real estate investments, or a declining national currency. If you are interested in precious metals (and you should be), you should consider building a diverse portfolio that includes Gold, Silver, and Platinum. This way, you will spread out your risk and maximize your profit potential. If one metal suffers a decline, there's a good chance that growth in your other metals will offset any losses. Right now, precious metals are selling quite cheap in the face of a slowing global economy, so they are becoming an even more valuable investment.