Important Considerations when Investing in Silver

Gold-Silver Ratio
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The production of silver has been on the rise recently. In fact, 2012 saw an incredible 4% rise to reach the highest production level ever, of 787 million ounces. This is because the demand for silver has been higher than ever, with even more industrial and cosmetic uses of silver popping up every day. The issue that the market is running into, is that the silver stores are starting to dry up. The world stores of silver were at 10 billion ounces in 1945. Those investing in silver have been enjoying the benefits of this number dropping to 1.5 billion ounces in 2010.

How the Dwindling Supply Means Better Prices
As the silver stores dry up, the day where these stores are empty is rapidly approaching. When this happens, either the mines will have to significantly ramp up the production of silver to keep up with demand, or the price of silver will shoot through the roof. Those involved with investing in silver will see a significant increase in their return on investment.

Even with a high production rate of 787 million ounces of silver in 2012, it is important to keep in mind that there was also a demand of 1048.3 billion ounces. While some of this demand is being met by repurposing melted scraps, there is not going to be enough to go around. The cost to mine silver is getting higher and the industrial uses continue to expand.

Some people who are on the fence about investing in silver will point out that silver prices go up and down, rather than rising in a straight line. This is the same as any other precious metal. Market and economic factors will come into play when looking at the prices for silver. This is why taking a long view is necessary if you are going to have any hope of getting the best return on your investment.

A Look at Gold-Silver Ratios
There is more silver physically available than gold, but not when talking about the silver you can invest in. This volume is much lower. In fact, the gold-silver ratio over the past few years has fluctuated between 83.73 and 31.68. This is why when talking about a 20-30 gold-silver ratio in the future is good for those looking at investing in silver.

As the supply of silver continues to decline, the prices will continue to rise. Those who are involved with long-term investing in silver will benefit when the stock market is performing well. This is because silver prices will drop as the traders sell a percentage of the silver holdings to invest in stocks. As the stock market tumbles, they will purchase into silver again so that the prices will once again rebound.

Investment Advice for Silver
Many feel that gold is a better investment in the short run. After all, silver is not valued as a monetary metal. More of the national banks are buying up gold as a protection against failing economies.

The main reason for investing in silver right now is the fact that the prices will eventually go up as the stores give out. The production will not be able to keep up and anyone in possession of silver will be paid handsomely. International demand for silver and gold bars has been on the rise and the potential for a good return is there. While it is true that this kind of an investment is risky, all investments are risky. History has shown that silver prices will continue to increase and there is nothing to suggest that a long-term investment will not garner a big payout.