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Why invest in Silver? Research Team | Posted On Friday, April 24,2009, 04:39 PM

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Why invest in Silver?



We can invest in Silver in the following ways


A traditional way of investing in silver by buying actual bullion bars. In some countries, bullion bars can be bought or sold over the counter at major banks. Physical silver such as bars or coins may be stored in a home, a safe deposit box at a bank, or placed in allocated (also known as non-fungible) or unallocated ( pooled) storage with a bank or dealer.

Various sizes of silver bars :

  • 1000 troy bars – These bars weigh about 68 pounds avoirdupois (31 kg) these are COMEX good delivery bars.
  • 100 ozt bars – These bars weigh 6.8 pounds (3.11 kg) and are among the most popular with retail investors. Popular brands are Engelhard and Johnson Matthey.
  • Odd weight retail bars – These bars cost less and normally have a wider spread due to the extra work it takes to calculate their value and the extra risk due to the lack of a good brand name.
  • 1 kilogram bars (32.15 ozt)
  • 10 ozt bars and 1 ozt bars (311 and 31.1 g)


Buying silver coins is another popular method of physically holding silver. Coins may be minted as either fine silver or junk silver, the latter being older coins with a smaller percentage of silver. Junk silver coins are also available as sterling silver coins, which were formally minted (issued).


Some hard money enthusiasts use 99.99 fine silver rounds as a store of value. A cross between bars and coins silver rounds are shaped by a vast collection of mints generally contain a troy ounce of silver in the shape of a coin but have no status as legal tender. Rounds can be ordered with a custom design stamped on the faces or in assorted batches.


A certificate of ownership can be held by silver investors instead of storing the actual silver bullion. Certificates permit investors to buy and sell the security without the difficulties connected with the transfer of real physical silver. The Perth Mint Certificate Program (PMCP) is the only government-guaranteed silver-certificate program in the world. Silver Certificates were printed for a time in the United States as a form of paper currency. The certificate was matched to the similar amount of value in silver coinage. For example one fifty dollar Silver Certificate equals fifty silver dollars.


Swiss banks present silver accounts where silver can be instantly bought or sold just like any foreign currency. Unlike physical silver the customer does not own the real metal but rather has a claim against the bank for a certain quantity of metal. Many digital gold currency providers such as e-gold and Gold Money, which present silver as an option to gold and work on a similar principle. Silver accounts are backed through unallocated or allocated silver storage.


Derivatives such as silver futures and options currently trade on a variety of exchanges around the world. In November 2006 the National Commodity and Derivatives Exchange (NCDEX) in India introduced 5 kg silver futures.

Mining companies

These do not stand for silver at all but rather are shares in companies that mine silver. Companies rarely mine silver alone as normally silver is found within or alongside ore containing other metals such as tin, lead, zinc or copper. As a result shares are also a base metal investment rather than solely a silver investment. As with all mining shares there are numerous other factors to take into account when evaluating the share price other than simply the commodity price. Instead of personally selecting individual companies some investors prefer spreading their risk by investing in precious metal mining mutual funds.

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