Monday, 20 May 2013

Ultimate Silver Value Guide

Are you looking at diversifying your investment portfolio? Are you wondering if silver is a good vehicle to invest on? Whether you are starting your portfolio or you have been investing several years understanding the world of precious metals, knowing how the price of silver is changing is exceedingly important. If you are you interested to know what drives the price of silver in the international market, you have come to the right place. Following are important facts that you may want to know about the silver price. These pieces of information will come in handy as you go along your investment venture.
Spot Price Of Silver
If investing in silver and other metals, you will certainly come across the term spot price. But what does spot price of silver mean? A spot price is actually the value quoted for an immediate agreement of payment. It is a good guide to use and figure how much silver is worth. Then again, it is important to know that there are other defining factors that will influence the silver price. For example you are investing in coins, the general condition, the year the coin is minted are important information to care about. Investors pay for silver coins not because of its monetary value but also because of its historical value. Moreover, other factors that can affect the spot price of silver are opening and closing of silver mines and economic conditions.
Factors That Affect Silver Price
Supply And Demand
Presently, silver is showing a more positive profit than gold. Many experts believe that it is due to the concept of supply and demand. Silver is probably one of the most functional metals around. It is being utilized by a number of industries which include electronics, medicine, dentistry, coin production and fashion. With the increasing demand of electronics and other gadgets that contain silver, the supply of this metal is diminishing. Thus, the price of silver is significantly rising.
US Dollar
Apparently, there is a significant correlation between the US Dollar and the price of precious metals like silver and gold. During inflation and economic threats, the US Dollar is losing its value and many people tend to divert their interest to precious metals which are not affected by unstable economies.
Oil Price
Based on research, oil and silver had a 0.7 positive correlation and this was evident ever since the 1960's. Though the connection between silver and oil is strong, it is not as strong with that of gold and oil which is a correlation of 0.8. Moreover, gold and silver are two related metals. Gold, according to experts is considered as the chief driver for silver prices. When the price of gold is high, silver is also on the rise.
Long Term Outlook For Silver
Obviously, the demand of silver will continuously rise especially with silver used as part of production of a number of technologies and gadgets. Unfortunately, the supply is declining. Experts believe that silver will be difficult to recover and to recycle. Having that said, the silver price is expected to rise ever before.
Silver is one of the best investment assets you can possibly make. It is cheaper than gold and platinum, making this metal very ideal to start with especially if you want to build up your portfolio fast. Before adding this metal to your portfolio, research more about silver and consider how this investment will benefit you. With the unstable economy, precious metals continue to be very promising. If it is your first time to invest in silver, you may want to start first with coins and bullion. They are less risky as compared to other forms of silver.
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