Thursday, June 30, 2011

How to understand the silver market?

Silver has been a valuable hedge for wealth for a very long time. As a trading source it has been used for longer then gold.
Silver is used in many industries and has a strong impact on its value.

Supply and demand control its market value, so for example when silver was used in photographic development the need for silver was high.
More recently the proliferation of digital cameras has reduced the demand for silver and the price dropped with this.

Silver can be a volatile market and for two hundred years it remained of stable value.
In the early 1970s it started to rise and several attempts were made to corner the market. These have involved buying up a large proportion of the silver and reacting to the price rise.

One attempt was successful up to the point that India released its huge store of silver jewellery onto the market causing the rapidly rising silver prices to drop quickly.

A second try was made by Warren Buffet who bought literally millions of ounces of silver. This caused a huge rush of silver buying and the price rose rapidly. At this point Warren Buffet sold all his silver stock and has never entered the market again.

Whether this was real or trickery, the volatility of the silver market is shown clearly!

Over all prices for silver have continued to rise from 2003 and successful investors seem to like silver. The safe long term value of silver looks assured and silver has taken on some of this from the perceived long term safeness of gold.

See more about gold and silver

Choices for investing are growing. With mutual funds, exchange traded funds, certificates, options, silver bars and broker organised buying plans.

And just in case you forgot there is always silver jewellery. This can be worn and used so even if the price isn't what you would have liked its still pretty useful.