Silver Prices

Silver can easily be used as a form of investment. Like gold and other precious metals, silver has an intrinsic value that fluctuates over time, but is always significant. Many choose to purchase silver either as bullion bars or coins to help balance a portfolio and mitigate riskier investments.

Silver Pricing Basics 

For years silver prices were fixed by major governments around the globe. The price was held steady at $0.54 per troy ounce. Silver is most often discussed in its relation to gold prices. The ratio between the two is used in many forms of analysis by traders and investors. While the spot prices for the metals were fixed, the ration of silver to gold was 15.5. This means one troy ounce of gold would buy slightly more than fifteen troy ounces of silver.

After the fixed prices were removed, market conditions caused the price of silver to fluctuate dramatically. The ratio of silver and gold rose to an average of 47.0 over the 20th century. The average thus far in the twenty-first century looks to be even higher.

Pricing Silver for Investments 

Despite the fluctuations and relationship to gold prices, silver remains a good investment. The spot price of silver has risen steadily over time with occasional peaks depending on market conditions. In 1980 a single troy ounce of silver spiked and was selling for $15.65. That same ounce sold in 1990 for $4.17 thanks to a combination of market factors. The price has risen steadily since that time and one troy ounce of silver was sold at $12.62 in 2006.

Silver Prices and Instruments 

Prices and investments in silver are varied.

Silver Bullion Bars - Bricks of fine silver are sold through specialized dealers and special banks in countries like Switzerland. The most common investment grade bar is 100 troy ounces. Converted, a 100 ounce bar weighs around six and a half pounds or three kilograms.

The manufacturer makes a difference in the price of the bar, and premium manufacturers such as Engelhard and Johnson Matthey demand a price premium of roughly $0.50 per ounce. In 2006, a 100 ounce bar from a premium retailer would be worth approximately $1300.

Silver Coins - Other investors prefer fine silver coins. These coins are manufactured by national governments around the globe and are available with a national design. Throughout the centuries, silver coins have had many uses and appearances. Fine silver, or silver that is 99.9% pure, is minted into many of the collector and investment coins seen today.

For years, however, sterling silver, often called junk silver, was used to make operational coins for everyday use in some countries until the early of mid twentieth century. These coins were 92.5% silver and called Crowns, Half-crowns, Florins, Shillings, Sixpences, and Threepence. Sterling silver, thanks to its lower silver percentage, is not as valuable as fine and it is priced accordingly.

Other methods - There are many ways to invest in silver without physically owning the metal. But a few final ways to own silver as a form of investment are silver rounds which are like coins but have no tender value, jewelry, and even flatware and other curios as these can increase in value over time.