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Investing in Silver: Can You Really Make Money in Silver Investments?

Silver, like other types of precious metals, will always hold some intrinsic value. People have considered it a form of money for thousands of years. Investing in silver undergoes the same kind of cycle as most other investment vehicles. Whether people can still make money investing in silver depends on who you talk to. On April 29th, 2011, the price of silver hit its 31 year high by selling at $49.21 per troy ounce.

Has Silver Reached Its Peak Or Will It Continue To Rise?

Up until recent years, the price of silver had been on a steady decline. One of the main uses of silver was in photography and photo development. With the growing popularity of digital photography, the demand for silver in photographic uses gradually went lower and lower. In the late 1990s, the price of silver was floating between $4-$5 per troy ounce. That's a far cry from where it sits now.

Many economist believe that the price of silver won't be able to support going up much more. Being priced higher than it has been in three decades, many investors are anticipating the eventual downtrend in silver prices. But not everyone sees such a dark outlook for this metal.

More optimistic silver investors, especially those that have recently got into the silver buying frenzy, expect the price to continue to go up. Although the uses of silver has decreased with some commercial applications, there is new growing demand for it in other commercial situations. Some truly feel that there is no reason why the price of silver cannot break the $100 mark. Silver is a precious metal, and its price will be highly influenced by the supply and demand for it.

What Silver Is Being Used For:

1. Commercial Applications

Although most people think of fine jewelry and silver coins when they think about silver, the reality is that a large percentage of silver is being used by businesses in commercial applications. Since silver has such a low resistivity, it is used in the manufacturing of electrical appliances. Silver has also been used more and more in medical and hospital applications because of its antibacterial properties. Silver is also commonly used in the photovoltaics of solar panels and solar cells. Considering the increasing interest in solar power as a renewable energy source, this could also raise the demand for silver.

As different industries and technologies continue to develop, more usages for silver may be discovered and may influence the future need for this unique metal.

2. Jewelry

Polished silver has an elegance all its own. Gold is favored by many. However, there is a growing segment of people that prefer the purity and lightness of silver. Silver jewelry is also making a strong comeback because it is less expensive than gold. Therefore, a piece of silver jewelry can be exquisitely designed yet still remain affordable to those looking to own beautiful, high quality jewelry. Necklace, rings, bracelets, and earrings can be made from combining pure silver with precious jewels to create masterpieces. Jewelers like Tiffany and Company still hold sterling silver with the highest regard.

3. Collectors

Many people are highly motivated when it comes to collecting silver coins. Since they are not simply purchasing silver for its troy ounce value, they are willing to pay a premium in order to add a new coin to their collection. Some of the hottest coins being sought after in today's market are the American Silver Eagle at 1 troy ounce of 99.9% pure silver and the Canadian Silver Maple Leaf at 1 troy ounce of 99.99% pure silver.

4. Investors

One popular way to invest in silver is by purchasing bullion bars. These are very easy to store and come in a variety of convenient sizes, with the most popular sizes being 1 oz, 10 oz, and 100oz bars. The size and shape make them ideal for storing in a security deposit box or a home safe. Generally, the weight of the bar is stamped right into it.

Which direction silver will go is dependent on a number of factors. The supply and demand of silver is an obvious factor. However, the state of the economy will also influence the value of silver. When stock market and real estate investments seem too risky for the average investor, more people start to buy precious metals like gold and silver. People have a certain level of confidence when they own silver and gold because they know that even in the worst case scenario, these precious metals will still hold some value. A slumping economy will affect the psychological make up of the masses, and the demand for silver will go up as an increasing number of people start buying it.

Different Ways To Invest In Silver:

1. Silver Bullion

One of the simplest means of investing is buying and selling silver bullion bars. A person can buy a 10oz silver bar for $350 and then see its value change on a daily basis. Where will it be 6 months or a year from now? The simplicity of this kind of silver investing makes it ideal for many investors.

2. Silver Coins

Silver coins are much more volatile than pure silver bullion. The rarity of the individual coin can add additional value beyond the mere value for the weight of the silver. Collectors like the ability to get silver coins in all kinds of varieties. Silver coins can be purchased from a number of countries. Just be sure to get the documentation showing the amount of silver that the coin is composed of.

3. Silver Certificates

In this type of investing, the owner gets a certificate of silver rather than physically possessing the silver itself. This type of investing allows investors to buy and sell silver without the inconvenience associated with physically transferring silver.

4. Exchange-traded stocks

For those that want to get involved in silver investing without actually buying or selling any silver, there are silver exchange-traded stocks available. Investors will be able to take advantage of the financial security that owning investments in silver brings, but they will never actually own any of it.

Silver is hot right now. Whether its value will continue to rise making investors more wealthy is yet to be determined. There are simply to many factors involved to accurately predict what will happen in the near future. It could drop down to $5. It could shoot up to $100. Not knowing which direction silver will move is adding more fuel to the fire. With investments like stocks and real estate not being very popular, investing in silver will probably continue to be quite active for the time being.