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Saturday, January 3, 2009

Silver

Silver is one of the chemical elements. Silver’s chemical symbol is Ag (Gold’s symbols is Au) and its atomic number is 49 (Gold’s is 79). Silver sits directly above Gold in the Periodic Table of the Elements as its electronic structure is similar. Therefore Silver has similar characteristics to Gold. Silver is relatively inert and malleable. Unlike Gold, Silver does tarnish. The best way to clean silver is with mild soap and warm water and then pat dry with a soft cloth. Chemical cleaners such as “silver polish” are completely unnecessary.

Silver is both an Industrial Metal and a Precious Metal. As an industrial metal Silver has many thousands of uses due to its outstanding qualities. Silver has the highest electrical and thermal conductivity of any element. Silver was critical to the photographic industry before digital cameras came along. The term “Silver Screen” refers to the fact that Silver was actually embedded into the screens in the early movie theaters. Silver even kills bacteria and is used in water filters for that purpose. New uses of Silver are found almost daily.

As a precious metal for money Silver has no equal in its widespread use. Silver coins are among the oldest examples of coined money. Gold is too valuable for everyday common use historically being worth sixteen times Silver. Silver prices are quoted in Troy Ounces. Silver futures contracts are traded on the COMEX in New York and on the London Metal Exchange. The Spot Price is published by the exchanges and is derived from the futures prices.

COMEX Silver futures contracts are for 5000 ounces cast into 1000 ounce bars. The vast majority of the activity on the COMEX is done by “traders” trying to make money on price fluctuation. The price of Silver set by the COMEX differs greatly from the Silver price paid by individuals for small amounts of Silver coins or bars. There is a big difference in that these small individual transactions involve real physical Silver – not paper contracts on an exchange. Thus, the Silver price for small amounts can be as much as 100% over the COMEX price. In times of economic uncertainty Silver can be very difficult to get as Silver is the money of the common person.

Another thing to keep in mind is the historical ratio between the Gold price and the Silver price. Over the long term one ounce of Gold is worth sixteen times that of one ounce of Silver. When the Gold/Silver ratio gets far from sixteen you expect a return to the mean. Silver price moves can be very volatile.

Everything that was said about how to think about owning Gold is true of Silver. Silver is insurance. Persons of modest means should make Silver their first priority. Silver is the money of everyday transactions. One ounce bullion coins and ten ounce bars are most convenient. In terms of one’s overall precious metals holding thirty to forty percent should be in silver.

11 Comments:

Blogger 1620WasMyFirst said...

Silver has only tarnished in air since the industrial revolution. At that time sulfur emissions spiked, and sulfur tarnishes silver.

December 7, 2012 at 9:04 AM  
Blogger Silver Expert said...

um.. no, silver tarnished before the industrial revolution. I am not even going to explain myself because your statement makes my brain hurt...

April 9, 2013 at 10:50 PM  
Blogger Bradley Timm said...

Why is gold 60 times more at the moment?

April 18, 2013 at 5:45 PM  
Blogger Glitch Sta said...

Ya really...is silver gonna jump up to be in the gold ratio?

May 6, 2013 at 1:06 AM  
Blogger richard nelson said...

I've been trying to hord as much as I can the price as fluctuated up 10$ then back down but I feel its a really smart investment for the future

May 6, 2013 at 9:20 PM  
Blogger silver bull said...

Paper is dead. Get switched out to hard currency while you still can.

August 11, 2013 at 10:31 PM  
Blogger Tony Bilton said...

I'm a newbie to investing in silver. It's a cheaper alternative to precious metals but as the Indians (India) are importing the stuff in droves maybe it's not such a bad bet. Plus visiting the real asset company in London for advice. Fingers crossed. By the way..if you pass it to your relatives is it taxed? Uk inheritance tax is around 40%.

November 4, 2013 at 10:07 AM  
Blogger Trader T said...

Paper money isn't dead - it'll always be around. The market for silver is volatile and nutty, but it's good for diversification, especially if you're a numismatist. If you want silver it's spot price value ONLY and can spend thousands, you're better off with gold.

April 28, 2014 at 1:27 PM  
OpenID Pete said...

gold and silver prices are being controlled by the big banks. rest assured they will never let the price ever go over $36 an oz. for silver. you say 16 to 1 is where silver should be...well the big banks will lower the price of gold long before they will ever raise the price of silver. my reason? SIMPLE...they will do absolutely nothing to cause people to demand delivery of their gold and silver contracts. WHY? they do not have the metal. that's WHY !!! WAKE UP AND SMELL THE COFFEE !!!

May 27, 2014 at 7:17 AM  
Blogger Mike said...

Why has silver fallen so far?

October 14, 2014 at 4:42 PM  
Blogger Mike said...

I'm new to investing in silver and have been purchasing silver in 100oz increments over the last couple of years. But it seems like the prices just keeps falling. Any idea as to why? And when it might start the upswing?

October 14, 2014 at 4:44 PM  

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