Silver can be used as an investment such as other precious metals. It has been regarded as a form of money and stores value for over 4,000 years, although it has lost its role as a legitimate means of payment in all developed countries since the end of the silver standard. Some countries have bullion and collector coins, such as American Silver Eagle with nominal nominal value. In 2009, the main demand for silver was for industrial applications (40%), jewelry, bullion coins, and exchange-traded products. In 2011, global silver reserves reached 530,000 tons.
Millions of Canadian Maple Leaf Silver coins and American Silver Eagle coins are purchased as an investment each year. Silver Maple Leaf is a legitimate payment tool for $ 5 an ounce, and there are many other silver coins with higher legal tender values, including $ 20 silver Canadian coins. Silver is a valid payment instrument in the state of Utah USA and can be used to pay off all debts.
Video Silver as an investment
Price
Silver prices are driven by speculation and supply and demand, like most commodities. Silver prices are notoriously volatile compared to gold due to smaller markets, lower market liquidity and demand fluctuations between industries and storing of value usage. Sometimes, this can lead to wide valuations in the market, creating volatility.
Silver often tracks the price of gold as it saves the value request, although the ratio may vary. The ratio of silver to gold is 17.5: 1. The gold/silver price ratio is often analyzed by traders, investors, and buyers. In the Roman period, the price ratio was set at 12 (or 12.5) to 1. In 1792, the gold/silver price ratio was established by law in the United States at 15: 1, meaning that one troy ounce of gold was worth 15 troy ounces of silver; a 15.5: 1 ratio was enacted in France in 1803. The average gold/silver price ratio during the 20th century, however, was 47: 1.
Gold bars in coins or bars may have a premium of 20 percent or more when purchased from a dealer. Silver bar bars are available for purchase at a premium price of less than 7% compared to the Comex spot price for most of 2015 and early 2016, while government-printed coins still have a much higher premium.
Physical coins generally have higher premiums, for example silver eagles coins released from US mints with a $ 2 premium to authorized distributors who then sell coins with mark ups of $ 2.30 to $ 2.50 to customers depending on market conditions.
In recent years the growth of e-commerce in the physical bullion industry has seen a decrease in premiums for retail investors to buy products online with home-to-home delivery. Many online dealers provide international shipping and weekly discounts for a wide range of products.
Silver prices have risen sharply since September 2005, initially around $ 7 per troy ounce but reaching $ 14 per troy ounce for the first time in late April 2006. The average monthly price of silver was $ 12.61 per troy ounce during April 2006, and the price spot was around $ 15.78 per troy ounce on November 6, 2007. In March 2008, it hovered around $ 20 per troy ounce. However, silver prices slumped 58% in October 2008, along with metals and other commodities, due to the effects of the credit crunch. As of April 2011, silver has rebounded to reach 31-year highs at $ 49.21 an ounce on April 29, 2011 due to monetary inflation, and concerns about government solvency in developed countries, particularly in the eurozone.
Maps Silver as an investment
History
1979-1980
The Hunt Brothers (Nelson Bunker Hunt & William Herbert Hunt) take a large position in the use of silver using leverage (capital loans, such as margin debt), to become some of the largest private holders of silver in the world.
Because of their tremendous share of precious commodities, Nelson Bunker Hunt and William Herbert Hunt, Texan oil Haroldson Lafayette Hunt, Jr., were accused of trying to "corner" the silver market for price manipulation.
From 1973, the Hunt brothers began what was seen as an attempt to corner the silver market, potentially contributing to the price spike in January, 18 1980 from the London Silver Refinement to $ 49.45 per troy ounce. Silver futures reached the intraday COMEX of all time high $ 50.35 per troy ounce (intraday high all time CBOT was $ 52.80) and gold/silver ratio down to 1: 17.0 (gold also peaked on the same day on in 1980, at $ 850 per troy ounce).
In the last nine months of 1979, the brothers were estimated to hold over 100 million troy ounces of silver and several large silver futures contracts. However, the combination of changing trading rules on the New York Mercantile Exchange (NYMEX) and Federal Reserve intervention put an end to their holdings and their potential profitability on commodities. In 1982, London Silver Fix has dropped 90% to $ 4.90 per troy ounce.
In 1979, the price for silver jumped from about $ 6 per troy ounce to a record high of $ 49.45 per troy ounce (on January 18, 1980), which was an increase of 724%. The brothers are thought to hold one third of the world's silver supply (excluding silver held by the government). The situation for another silver buyer who has not stockpiled metal before his bull run is so terrible that the Tiffany designer issued a full-page ad in The New York Times, blaming the Hunt Brothers for the price increase and stated that "We think it's inappropriate for anyone to hoard a few billion, yes billion dollars, worth of silver and thus drive the price up so high that others have to pay an artificial high price for silver goods ".
On January 7, 1980, in response to Hunts' accumulation, the rules of exchange on leverage suddenly changed, and COMEX adopted the "Silver Rule 7", placing heavy restrictions on commodity purchases on margin, causing great and enormous liquidation. downward pressure on prices. The Hunt brothers have borrowed much to finance their purchases, and when prices start falling again, falling more than 50% in just four days due to liquidation of margin positions suddenly forced, they become unable to meet their obligations, causing further panic in market of precious metals.
The Hunts have never been proven guilty of any criminal offense, although later, they lost a civil suit to a Peruvian mining company that lost money during an explosion and a silver statue. Throughout the 1980s, the great wealth of Hunts shrank after these events, and they eventually filed for bankruptcy. In 1989, they agreed to a civil settlement with the Commodity Futures Trading Commission, paid a fine, and approved a ban from commodity trading.
2010-2011
There is a big risk to the world economy that investors push prices up by buying defense commodities (eg silver or gold). When the short-term risk is believed to have subsided, many investors relocate their assets back into earning (dividends or interest) investments such as stocks or bonds.
The US debt crisis ceiling 2011 is a major factor in price increases. The US midterm elections in 2010 led to President Obama vs. presidential battles. Tea Party. Silver prices continue to rise from $ 17 to $ 30 ahead of the election. Then when splits and threats begin to materialize between late 2010 and 2011, silver finds a "new normal" between $ 25 and $ 30.
In 2011, Republicans in Congress demanded a deficit reduction as part of raising the debt ceiling. The resulting dispute was settled on August 2, 2011 by the Budget Control Act of 2011.
Then the first few months of 2011, Moody's and S & amp; P downgraded US financial prospects. This is a big surprise for the financial world; that's when silver rose to $ 50.
- On April 18, 2011, the US-based rating agency S & amp; P issued a "negative" view of the US "AAA" (highest quality) debt rating for the first time since rating agency started in 1860, indicating there is one-in-three direct reduction opportunities in the rating over the next two years.
- On April 25, 2011, the silver price traded $ 49.80 an ounce in the New York spot market.
On August 5, 2011, S & amp; P issued the first ever federal credit rating downgrade, citing their April warning, the difficulty of bridging the parties and that the resulting deal fell far short of the expected big 'big deal'. The credit downgrade and debt ceiling limitations contributed to the Dow Jones Industrial Average's close of 2,000 points at the end of July and August. After the downgrade itself, DJIA has one of the worst days in history and down 635 points on August 8th.
Then, as Treasury Secretary Timothy Geithner might order treasuries to use extraordinary measures to delay the crisis, silver returned at $ 35. As the disaster continued during the summer, silver moved in the $ 33 to $ 43 range.
When it became clear that the "financial apocalypse" would be delayed by the end of summer, many investors dumped silver and commodities and moved back into US equities. Silver price quickly returned to the "new normal" level of about $ 30.
Whether classifying silver movements as 'bubbles' (seen when comparing silver with gold) has been debated, with Peter Schiff denying that bubbles ever existed and insisting that the factors causing silver price increases have not been resolved.
Highest Listed Silver Price
Affects the price factor
Large traders or investors
Silver market is much smaller than the gold market. London gold bullion market turns 18 times more monetary value than silver. With physical demand estimated at only $ 15.2 billion per year, it is possible for wholesalers or investors to influence the price of silver either positively or negatively. As an example:
In 1979, The Hunt brothers were accused of trying to "corner" the silver market and were estimated to have accumulated more than 100 million troy ounces of silver, potentially contributing to the price increase from $ 6 to $ 48.40/ozt.
In 1997, Warren Buffett purchased 130 million troy ounces (4,000 metric tons) of silver for $ 4.50 per troy ounce (total value of $ 585 million). On May 6, 2006, Buffett announced to shareholders that his company no longer holds silver. Ownership, much larger than Hunt's brethren, does not seem to affect the price of silver, and he liquidates his position without taking any significant advantage. Bill Gates, who took the big silver position at the same time, was held for longer and earned a big advantage in the next bull silver run.
In April 2006, iShares launched a trading-traded silver fund, called the iShares Silver Trust (NYSEÃ, Sculpture: Ã, SLV), which as of November 2010 holds 344 million troy ounces of silver as a backup.
The big movers for silver sales in 2012 are Morgan Stanley and their short positions. This has affected the silver market, along with a clear lack of silver on the ground available for investment. As silver continues to expand for industrial use, fewer metals are available for gold bullion for investment. That, coupled with the uncertainty of paper investment, has driven wild market prices.
Short sales
In April 2007, the Merchant Commitment Report revealed that four or fewer traders held 90% of all short silver futures contracts of 245 million troy ounces, which is equivalent to 140 days of production. According to Ted Butler, one of the banks with large silver shorts, JPMorgan Chase, is also the keeper of silver SLV exchange-traded funds (ETF). Some silver analysts have pointed to potential conflicts of interest, as strict supervision of the Comex documents revealed that ETF shares could be used to "cover" the delivery of Comex's physical metal. This prompted analysts to speculate that some silver stores have many claims on them. On September 25, 2008, the Commodity Futures Trading Commission (CFTC) succumbed and investigated the silver market after persistent complaints of fraud.
In April 2010, Andrew Maguire, a former Goldman Sachs trader, announced a market manipulation statement by JPMorgan Chase and HSBC from the gold and silver market, prompting a number of lawsuits. Responding to the alleged market manipulation of silver investors such as Max Keizer, Blythe Masters, Head of Global Commodities for JP Morgan, told CNBC in April 2012 "often when customers have metal stored at their facility they protect it through JP Morgan on a forward basis in turn protecting itself in the commodity market If you only see our hedges and activities in the futures market, but you are unaware of the underlying client position that we are hedging then it would suggest inaccurately that we are running a large targeted position. "
Industrial, commercial, and consumer demands
The traditional use of silver in the development of photography has declined since 2000 due to the decline of film photography. However, silver is also used in electrical equipment (silver has the lowest resistivity of industrial metals), photovoltaic (one of the highest light reflectors), soldering, clothing, and medical use of RoHS (silver has antibacterial properties). Other new applications for silver include RFID tags, wood preservatives, water purification and food hygiene. The Silver Institute has seen a marked increase in silver-based biocide products coming into the market, as they explain:
We are currently seeing a surge in applications for silver-based biocides in all areas: industry, commercial and consumer. New products are introduced almost everyday. Established companies combine silver-based products in the current line - clothing, refrigerators, cell phones, computers, washing machines, vacuum cleaners, keyboards, countertop, furniture handles and more. The latest trend is the use of nano-silver particles to provide silver ions.
Data from 2010 revealed that the majority of silver is used for industry (487.4 million ounces), jewelry (167.0 million ounces), and investment (101.3 million ounces). About 500 ounces of silver are used in every Tomahawk (missile).
Middle-class expansion in developing countries that aspire to Western lifestyles and products can also contribute to the long-term increase in industrial and jewelry use.
Hedging on financial pressures
Silver, like all precious metals, can be used as a hedge against inflation, deflation, or devaluation. Like Joe Foster, portfolio manager of the New York-based Van Eck International Gold Fund, described in September 2010:
The currencies of all major countries, including our country, are under heavy pressure because of the enormous government deficit. The more money pumped into these economies - the printing of money at the bottom - the less valuable the currency.
Investment vehicle
Bar
The traditional way of investing in silver is to buy real bar bars. In some countries, such as Switzerland and Liechtenstein, bullion bars can be bought or sold on a desk in large banks.
Rectangular silver rectangular bars make them ideal for storage in a home safe, bank safe, or placed in the allocated (also known as not exchangeable ) or unallocated ( storage i> or pooled ) with the bank or dealer. Silver is traded in the spot market with the code "XAG". When settled in United States Dollar, the code is "XAGUSD".
Various sizes of silver bars
- 1000 oz troy bars - This bar, 999 fine, weighs about 68.6 pounds avoirdupois (31 kg) and varies about 10% for weight, since bars range from 900 ozt to about 1,100 ozt (28 to 34 kg). This is a good COMEX and LBMA delivery bar .
- 100Ã, oz troy bars - This bar weighs 6.86 pounds (3.11 kg).
- Strange weight-loss retailing rod - This bar is cheaper and generally has a wider spread, due to the extra work required to calculate its value and the additional risk due to the lack of a good brand name.
- 1 kilogram stem (32.15 oz troy)
- 10 oz troy bars (311 g) and 1 oz troy bar (31.1 g)
Coins and rounds
Silver coins include an ounce of 99.99% pure Canadian Silver Maple Leaf and one ounce 99.93% pure American Silver Eagle. Coins can be printed as fine silver or silver garbage, the last being an older coin made of 90% silver. US coins 1964 and longer (half dollars, dimes, and quarters) are generally accepted to weigh 24.71 grams of silver per dollar of nominal value, which at a nominal silver content of 90%, means to 22.229 g silver per dollar. All US dimes, quarters, parts and 1 piece of dollars contain 90% silver since their introduction until 1964 when discontinued. The mosaic alloys of these coins weigh more than all the other silver investment coins.
All United States 1965-1970 and one half of 1975-1976 Bicentennial San Francisco proof and mint set Kennedy half dollars "wrapped" in silver alloys and contain 40% silver.
Silver-silver coins are also available as sterling silver coins, formally printed until 1919 in England and Canada and 1945 in Australia. These coins are 92.5% silver and in the form (in heavy weight) Crown, Half-crown, Florins, Shillings, Sixpences, and tigapence. Threepence weight is 1.41 grams, and the crown is 28.27 grams (1.54 grams heavier than US $ 1). Canada produces silver coins with 80% silver content from 1920 to 1967.
Other hard-earners use 0.999 fine silver rounds as a store of value. The cross between bars and coins, the silver spin is produced by a large number of candies, generally containing troy ounces of silver in the form of coins, but has no status as a valid payment instrument. Rounds can be ordered with a special design stamped on the face or in various batches.
Exchange-traded products
Products traded on silver exchanges represent a quick and easy way for investors to gain exposure to silver prices, without the inconvenience of storing the physical bar. Silver ETP includes: iShares Silver Trust (NYSEÃ, Arca: Ã, SLV) launched by iShares is the largest silver ETF on the market with over 340 million troy ounces of silver in storage.
Certificate
Silver ownership certificates can be held by investors rather than keeping real silver gold. Silver certificates allow investors to buy and sell securities without difficulty associated with actual physical silver transfers. The Perth Mint Certificate Program (PMCP) is the only government-certified silver certification program in the world.
The US dollar has been issued as a silver certificate in the past, each representing a silver dollar paid to the carrier upon request. Notes are issued in denominations of $ 10, $ 5, and $ 1; However, since 1968, they can not be redeemed again for physical silver; or for other forms of legitimate money, unless the Federal Reserve Notes (or the equivalent of their coins) - on dollars for dollar bases. However, due to the fact that there are limits to their problems, and the fact that nothing else is issued for circulation, there are premium collectors more than the nominal value for this record. The date and issue of the series, as well as the conditions, are the factors that determine the value.
Account
Most Swiss banks offer silver accounts where silver can be bought or sold just like any other foreign currency. Unlike holding physical silver, the customer has a claim against the bank for a certain amount of metal. Providers of digital digital currencies and the internet bullion market, such as BullionVault or GoldMoney, offer silver as a golden alternative. Some of these companies allow investors to redeem their investments through physical silver delivery.
Derivatives, CFDs, and spread bets
Derivatives, such as silver futures and options, currently trade in various exchanges around the world. In the US, silver futures are mainly traded on COMEX (Commodity Exchange), which is a subsidiary of the New York Mercantile Exchange. In November 2006, the National Commodity and Derivatives Exchange (NCDEX) in India introduced 5 kg of silver futures.
Companies such as Cantor Index, CMC Markets, IG Index and City Index, all from the UK, award contracts for differences (CFDs) or spread bets on silver prices.
Mining company
It does not represent silver at all, but rather a silver mining company. Companies rarely mine silver alone, because silver is usually found inside, or next to it, ore containing other metals, such as lead, tin, zinc or copper. Therefore, stocks are also an investment of base metals, not solely silver investments. As with all mining stocks, there are many other factors to consider when evaluating stock prices, other than just commodity prices. Instead of choosing individual private companies, some investors prefer to spread their risk by investing in noble metal mining mutual funds.
Taxation
In many tax regimes, silver does not have a special position that is often given to gold. For example, in the European Union, trading of known gold coins and bullion products is a VAT exemption, but no such allowance is given to silver. This makes investment in silver or bullion coins less attractive to private investors, because of the extra premium on purchases represented by non-recoverable VAT (imposed on 20% in the UK and 19% for bar and 7% for bullion products with nominal value, for example the US Silver Eagle and Maple Leaf Canada, in Germany). Norwegian companies may legitimately waive VAT throughout Europe within certain annual limits or may arrange local takeovers.
Other taxes such as capital gains taxes may apply to an individual depending on the country of residence (tax status) and whether the asset is sold at an increased nominal value. For example, in the United States, silver is taxable only when it is sold for profit, at the rate of special collection capital gains (normal income tax rate, subject to a maximum of 28% for silver held for 1 year).
See also
References
- United States Mint Ã, Â · About Mint
External links
- London Silver Fixing is currently by the London bullion market
- 100 Years of Interactive Silver Price Charts on MacroTrends
Source of the article : Wikipedia
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