The Price / Value of Silver

Often referred to as the “poor man’s gold”, silver has nevertheless been as important, or probably even more so depending on your point of view, as its more lustrous precious metal relative. For more than four millennia, silver has served a wide range of purposes from currency to use in items such as electrical appliances and medical products.

Silver is way cheaper than gold, which makes it an attractive investment vehicle for small investors. As of this writing, the price of gold stands at over $1200 per troy ounce, while current silver price is at $17 per troy ounce. The disparity in price, however, does not mean silver is not that valuable. Compared to gold prices, silver prices tend to grow more rapidly. In 2005, for example, the silver price stood at $7 per ounce. As mentioned above, the current value of silver is now at $17, which indicates a 100 percent increase in sterling silver value in just five years.

And if the gradually declining world supply of silver is any indication, this precious metal may just become even more precious than gold, and that would render its old moniker “poor man’s gold” obsolete.

Unlike gold, silver is largely not held in governmental deposits as money coverage, which means governments cannot be a major influence on silver prices. Market laws of supply and demand mainly dictate silver prices, and increasingly so in the coming years, as demand skyrockets and the value of silver becomes much higher.

The ever growing demand for silver is often triggered by the fact that it is being used in many areas of our lives. Batteries, computers, pharmaceuticals, electrical switches, solar panels and even space shuttles are just some of the items that make use of silver in order to function properly. And the list could only keep on growing, as new high-tech uses for silver are being developed every single day.

Such new uses could only drive the demand for silver up. Today, annual production could barely keep up with demand, and many silver producers resort to silver recycling, as supplies of silver are slowly disappearing. Many believe that with all these factors, it would be wise to invest in silver today, while prices are still a bargain, because when the price rises, you are almost guaranteed a windfall when you sell silver. You can go for the traditional way of investing in silver, such as bullion bars. Silver coins are also popular investment vehicles. Other methods of investing in silver include exchange-traded funds, silver certificates and derivatives such as silver futures and options.