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Silver – More Rare Than Gold?

August 23, 2010 by  
Filed under Silver Investment Basics

Important Information About Silver

90% of the world’s silver has been consumed by industry. This means that the available supply has been and always will be greatly reduced going forward. 5,000 years of cumulative production has been used up in production over the past 60 years. Silver is more rare than gold. There are a potential 5 billion ounces of gold versus 1 billion ounces of silver available. Realize these are from the highest estimates found for each. It has one of the largest short positions of any commodity in the world. The U.S. government once had a five billion ounce reserve. It is now gone! All discovered so far would fit in a cube 55 meters on a side. It is rare! The precious metal has its main uses of manufacturing, decorative uses, photography, jewelry, and silverware. Of course, it is also used for investment purposes.

Reasons to Buy Silver

It has the lowest price per ounce of all the precious metals. Silver is actually more rare than gold. This gives this precious metal the potential for a significant rise in price. The short sellers, in the silver market, have held down the price for decades. This gives the opportunity to buy at a much lower price. The entire silver market is tiny in relation to other markets. Yet, it is critical for so many products that are used. Silver has traditionally had a price ratio to gold of 15 to 1. Now that ratio is at 60 to 1. This shows a potential opportunity in buying silver. The uses will most likely increase, yet available supply has been dropping.

Challenges in Buying Silver

Due to its low price, one can purchase a significant amount for a modest dollar amount. This does mean you will need a larger space to store it. The market is tight and it is difficult to purchase the exact type and style of silver such as Silver Eagles. This is an excellent place to use Bullion Post’s Reverse Listing feature to source out exactly what you want at the price you want to pay! This precious metal is said to be in a manipulated market. This does give a lower price to purchase. This is truly the opportunity potentially to buy low. Few even consider this precious metal as a place to invest. Based on its demand potential, this gives reason to take a second look as a place to invest. This precious metal market is a volatile market. The price moves often all at once after periods of not doing much of anything. One should know this before investing in this metal.

Sources:

http://www.usgs.gov/faq/list_faq_by_category/get_answer.asp?id=90

 

Steve Ebert is the Editor and Partner of www.bullionpost.com. Bullion Post is an online network for buying and selling precious metals and collectible coins in both online auction and fixed price formats. Contribute your own ideas on precious metals at our Bullionpost Forum. List your precious metals and collectible coins as our site has low transaction fees.

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