Silver and gold are historically known as stores of value and hedges in uncertain economic times, but as silver usage in coinage has diminished worldwide, its uses have changed. Unlike gold, silver is primarily used today as an industrial commodity, and demand for its industrial applications has grown consistently for the past three decades. Silver possesses unique characteristics including strength, ductility, malleability, electrical and thermal conductivity, as well as its ability to withstand extreme temperatures.
Aside from its industrial qualities, silver is also possesses microbicidal and antibacterial properties, making it a popular choice in the healthcare industry for the treatment of wounds and burns using silver-infused bandages which promote healing. And, due its antiseptic potential, silver is also showing indications as a potential “Silver Bullet” in the fight against the spread of disease and infection.
What influences silver prices?
Worldwide demand for silver has exceeded mine generation every year since 1990, depleting the aboveground stores of silver. New industrial uses for silver as an electrical component with greater conductivity than copper, and as an ingredient in new super adhesives, will further strain waning supplies in the future.
The USA was once the largest holder of silver in the world, and unloaded billions of ounces of silver onto the world market for decades, keeping silver prices much lower than where they realistically should be today. However, the US government’s silver supplies are now dwindling, forcing the U.S. government to now buy back silver to replenish its stores.
Investment analysts estimate that more than 95% of all the silver ever mined throughout history has already been consumed by industry and lost forever. In 1900, there was approximately 12 billion ounces of aboveground, refined silver, but that figure has currently dropped to roughly 300 million ounces. That means the current industrial use exceeds available new supplies – suggesting an increase in value is imminent.
Why should I buy silver?
There are two reasons why you should invest in silver:
* Portfolio diversification as a hedge against economic, political or monetary crises
* To increase your wealth by financially gaining from rising silver prices
Silver prices on the rise
As mentioned earlier, both silver and gold served as a store of value for centuries. And with gold experiencing a steady price increase since 2001, investors have also used it as a growth investment and paid less attention to silver since its meteoric peak in the 1980’s.
That’s all changing.
Silver has recently outperformed gold by more than doubling in price. That’s right, between July 1, 2003 and November 30, 2006, gold prices improved approximately 84%, while the price of silver experienced more than a 200% increase.
Dwindling supplies due to silver consumption and its ever-increasing demand means the silver market certainly represents an outstanding investment opportunity for savvy investors. Most analysts around the world agree that silver is poised for a major boom in value, and at current prices, silver could offer investors extraordinary long-term investment value.
How do I invest in silver?
The traditional method of investing in silver is by buying bullion (gold in its bulk form), and trading it on commodity markets.For investors, the greatest value in purchasing bullion is the same as purchasing any other commodity in bulk – rather than after it is processed and rendered into individual smaller units. This is what makes bullion more affordable than minted coins, because investors can take full advantage of buying pure gold in bulk quantities and avoid the added costs of minting and processing.
Bars or ingots
Precious metals come in bars, which can be delivered directly to your home for storage in your own safe, or in a vault on your behalf. Due to the many difficulties of transporting, storing and verifying pure silver bars, a popular option available to our clients is for RCM to hold your bullion in one of our international vaults where it remains in ‘good delivery bar’ form. Trades can then be settled instantly, giving you immediate liquidity of the asset.
Your RCM silver account gets you even more
As an investor with RCM, when you see silver prices on the rise, you can leverage your position to borrow money against your existing precious metals assets to purchase even more on account.
When is it a good time to buy?
There may never be a better time to invest in silver bullion than now. Demand for silver’s unique qualities for industrial and medical uses have exceeded annual silver production every year since 1990, and the demand is on the rise. The leading investment analysts agree; silver prices are poised to rise dramatically. Warren Buffett, George Soros, and Peter Lynch have all advised investors to diversify their portfolios to spread risk and maximize growth potential by including precious metals in their portfolio.