Buying when the spot price of silver is low affords many benefits, including getting more for your money, a higher probability that the price of silver will go up, and an overall safer investment. In this article we discuss this, and many other aspects of buying silver.
When it comes to buying physical silver, even if it’s not your first time, many people have questions. Some of these are general in nature. One of the most common general questions is about timing. Is now a good time to buy? Other questions are more specific. For example, what is live pricing and how does that affect me?
Just keep reading. You’re about to learn the answers to those questions and more. Before you know it you’ll be buying like a pro.
Let’s start with the matter of timing. Is now a good time for you to buy silver? Presently we are nearing the end of January 2016. In the past 6 months, there have been some fantastic buying opportunities in the silver market. In fact, silver prices are still low.
However, in the middle of December, the price of silver per ounce dropped below $14. This is significant because the spot price of silver hasn’t been that low in over 5 years. Your risk is now less than it previously was when silver was at a higher price. Another benefit of low spot prices at the time of purchase is that the potential for long-term gains is greater. The last time that the price of silver spiked was in early 2011. At its peak, it was over $48 per ounce. With such a drastic difference between the last peak and recent low prices, it is easy to see how there could be increased potential for future gains.
Now, why does the price of silver rise and fall? The short answer is there are many factors that can cause prices to change. The long answer is a bit more complicated.
One of the most basic factors that influence the silver market is supply and demand. The principle is the same as any other market. When demand outweighs supply, prices rise. When demand drops, prices fall. However, the actual demand for silver can be a bit difficult to determine. While many of us own physical silver in the form of coins, bullion, jewelry, or objects, it’s actually a vital part of many industries as well. From nuclear power and electronics to photography and x-rays, silver is utilized for many purposes because of its unique properties.
Other factors that impact the price of physical silver include the current value of the dollar, economic uncertainty, and paper trading of silver. These are a bit beyond the basics, but simply being aware that they are factors is sufficient to get started buying physical silver by the oz.
To keep things simple, we will only discuss how the market works regarding physical silver. First of all, silver prices vary throughout the day. They may rise or fall at any given time. Often these changes are small, in the range of a few cents or so. The current standard price for an oz. of silver is called the spot price.
Physical silver bullion is sold by the Troy oz. So, what is a Troy oz. and does it actually matter? A Troy oz. is equal to 31.1 grams and without a doubt this matters. A standard, or Avoirdupois (AVDP) ounce is equal to 28.3 grams. That’s a difference of 2.8 grams between a Troy oz. and standard ounce. It may not seem like much, but it adds up.
To sum it up, the spot price of silver changes during the day. The spot price is the current standard value for 1 Troy oz. (31.1 grams) of silver. Now that you know exactly what the spot price is, let’s talk about live pricing.
Live pricing is a standard feature of reputable bullion dealers that sell online. Live pricing is based on the current spot price. Since spot price varies, live prices vary as well. The live price of a silver coin or bullion product is the total of the spot price and the product’s premium. The premium is the amount above the spot price that makes up the rest of a product’s final price. Live pricing is used for bullion products, but not collectible coins since the value of collectible coins is determined differently and is not necessarily linked to its metal content.
When you purchase a silver coin, round, or bar with live pricing, the price of an item will be set for a short period of time. When this time starts is determined by when you add it to your cart. The price freezes for a short time once the item is added to your cart so that it can be purchased for the price it was at that time, regardless of real time value. At MCM, the price freeze lasts for 10 minutes once a bullion product has been added to your cart.
Typically, silver coins and bullion are purchased as an investment. While there is no shortage of avenues to take when investing your money, there are a few main reasons why those who buy silver choose to do so.
Lately, prices have been low. That means you can purchase more silver for the same amount of money compared to when the spot price of silver is higher. Since the spot price has been low, the risk is low as well but the volatility and history of silver offer the potential of significant long-term gains. Nothing is ever guaranteed, nor could it be, but the potential certainly exists.
Another reason many choose to buy physical silver is to protect against inflation. This is one of the most popular reasons to invest in silver.
Perhaps one of the most overlooked benefits is that when you buy silver coins, bars, or rounds, you physically control them. Whether you keep them in a safe, a safety deposit box, a secure facility, or that secret hole in the wall, you decide how and where your silver is kept. While the implied security offered by paper and banks is nice, it’s tough to beat being in control and the confidence that comes with that. In times of uncertainty, this is even more important.
When you’re ready to buy physical silver in the form of silver coins, bars, or rounds, MCM has you covered. Here you will find an excellent selection and options for any budget. Whether you want to buy 1,000 oz. or you just want to get your feet wet with a single 1 oz. silver coin, MCM has something that’s right for you and your budget.
||Brian Comp Jr. is a coin and bullion expert from Pennsylvania. He attended his first coin show at the age of 8 with his father in the late 90s. Brian has been working as a writer since 2011 and specializes in content that helps customers make good decisions. In his free time, Brian enjoys reading, checking out new coins, lifting weights, and drinking coffee. He’s always ready to answer questions, just email him at firstname.lastname@example.org.|