Silver among other precious metals has seen very few fluctuations in its price. Over the last few years, there has been an increase in silver prices and today it is being considered as one of the precious metals from the point of view of investment. At the close of COMEX on February 1, 2010, silver prices reached a high of 16.71 and a low of 16.61. According to COMEX, silver prices increased by 2.90%. Now the big question is why silver prices are important.
The silver prices along with gold have seen a steady increase in the last decade and this is good news because these precious metals offer a lot of security in unstable economy and markets. As you have seen in the recent past, markets have been really unstable and the recession has not done any great favors. The question is: should you invest in silver? The answer is yes.
Silver is a chemical element and is most often than not considered as a precious metal as well as an industrial metal. Apart from jewelry and antiques, silver is used in many industries and for several purposes. Silver is used by dentists for filling cavities as well as by the crockery industry to make silverware. Of course, when you are considering investment in silver, you will be purchasing silver bullions and coins and not jewelry. The silver prices for bullions and coins are monitored every day as these prices change but most of the time, the change is positive.
One of the biggest indexes for precious metals like silver and gold is COMEX. In fact, silver futures contracts from COMEX are mostly for 5000 ounces that have been cast into 1000 ounce silver bars. Most of the activity leading to increase or decrease in silver prices is conducted by traders on COMEX. The main job of these traders is to try and make money on the price fluctuation. COMEX sets silver prices and this price is quite different from the price paid by most individuals who invest in small amounts of silver bullion or coins and bars. The only fact to consider here is that when you are investing in silver, you are actually purchasing silver bullion - it is more of a physical transaction and not a paper based transaction. There is actually no paper involved because you are buying real silver in the form of silver bullion. As a result, silver prices for the smallest investments can be as high as 100% of the COMEX price or over and above it.
If you are planning to invest in silver then you need to know and learn more about the market and the spot price. The spot price of silver is the market price and as an investor it is recommended that you buy at this price. Silver prices on bullion, coins, bars, biscuits, and rounds change on a daily basis and you need to keep abreast to the latest information in order to make a sound investment.
By Kelly Hunter
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