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Silver Prices are About to Break Out

Written by Brian Hicks
Posted August 9, 2013

Let’s play a little game. What do you think of when someone says the words “precious metal?”

If you’re like many people, you probably thought “gold.” Most people choose gold because it’s always had such a big reputation in the investment world. Everyone wants to know how gold is doing, glancing over others like silver and palladium only after.

silverToday, we’re going to put gold to the side. It’s time for it to take a backseat anyway. Silver is about to make great strides, and it deserves to have center stage.

The Status of Silver

Silver prices have been declining for a large part of the year, but they have recently started to increase, so now is the time to start learning a bit more about the silver investment market.

In large part, silver prices depend on the economy. This means when people have money, demand increases, production increases, and everyone is happy.

Industries are more likely to use silver to manufacture products. Actually, about 40 percent of the silver produced is used for industrial purposes. This is what is making silver so much more attractive right now.

A relatively new industry has stepped out with its use of silver: solar power. The industry has been increasing its use of silver by 50 percent per year since it first started using it on panels in the early 2000s, Silver Investing News reports.

Now, China is ready to rev up solar power to 35 GW before 2015, a move that is guaranteed to increase silver demand. Japan also wants to increase solar generation by 5.3 GW in 2013.

If this isn’t enough of a sign that the demand for silver is increasing, watch what the rest of Asia is doing. A new vault just opened in Singapore that is capable of holding 200 tons of silver, and there are more facilities planned. What would Asia need all of these silver storage facilities for if it didn't plan on storing massive amounts?

It’s likely you’ve heard that silver fell 35 percent this year, but investors like you know that precious metals come back around. According to the Market Oracle, silver has seen this kind of volatility before. In March of 2008, silver was at $21 per ounce. It continued to fall to $8.40 by October 2008, but in 2011, it rose 400%. Investors who held on received a good reward for their patience.

Investing in Silver

Smart investors know that silver is a good investment because it's significantly cheaper than gold, which makes both buying and selling it easier. With silver prices low right now and getting ready to increase, it’s a good time to invest. Deciding on how to invest is your next step.

If you just want to get your feet wet, start with coins. The U.S. Mint has been seeing huge demand for silver coins recently after demand began to decrease at the beginning of the summer. The U.S. Mint also reduced prices for silver-made numismatic coins, which has contributed to the recent increase in sales. Silver Eagles are popular right now too. Sales increased 65.67% to 50,500 troy ounces.

If you’re not interested in storing silver, consider silver certificates. The Perth Mint Certificate Program is government-guaranteed, which will keep you from becoming a victim of silver certificate scams.

Silver accounts allow you to purchase and sell silver just as you would exchange foreign currency. The only difference is that you wouldn’t ever hold the silver. You’re putting a claim against the bank for the amount of silver you purchase. Swiss banks and Internet bullion exchanges are the most popular sources for accounts.

The other option for silver investing is through the stock market – particularly with ETFs. Some of the most popular silver ETFs include the iShares Silver Trust (NYSE: SLV), ProShares Ultra Silver (NYSE: AGQ), and PowerShares DB Silver (NYSE: DBS). If you choose to invest in the stock market, consider using an online stockbroker rather than an in-person one because the fees are often lower.

There are many options for investing in silver. Choose the one you’re most comfortable with and that you feel has the highest potential for profits.

But don’t wait too much longer. Silver is revving up, and once it leaves the gate, you may not be able to jump on the train.

 

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