How high will silver go? No one knows but many investors believe that this metal is undervalued. If you are going to buy silver the following tips can help:
1. Pure Silver Coins- These silver coins will be at least 0.999 pure, and are usually available in standardized weight increments. Many governments produce pure silver coins for investment purposes. The US Mint sells these silver coins to investors when there is a ready supply minted, but there are times when these coins are out of stock and cannot be directly purchased from the government. There is a large secondary market for these coins as well.
2. Junk Silver Coins- Junk silver coins are far from junk; this is just the term that the coins are given because they contain varying amounts of silver but are not considered pure silver coins. Junk coins may contain anywhere from 30% silver up to 90% silver, depending on the specific coin and the minting date. Often this form of silver is less expensive because of the lower purity value.
3. Silver Rounds- Silver rounds appear similar in size and shape to silver coins, but these rounds do not have any currency value or government coin design. Since rounds are easier to produce and there is no currency value attached these items generally have a lower premium than both junk coins and pure silver coins. For many investors the lower cost and high purity make rounds a great choice.
4. Silver Scrap- A number of companies and individuals have started collecting silver scrap because of the high price that the metal has right now. Broken jewelry, old damaged silver coins, and silver recovered from a wide range of other items can be a great investment. In many cases this may be the method with the lowest cost attached, but the investor needs to be knowledgeable about scrap silver before entering this area to be successful.
5. Silver Bars- Bars of silver bullion are normally the lowest cost method for investors who want to pay the lowest possible premium and still receive actual silver bullion. Bars can be found in varying weights and sizes, and a larger bar can be found in some cases for 2%-3% over the spot price for the metal.
6. Silver Stocks- Silver stocks are considered an investment into silver, but these are not the same as buying the actual metal. Stocks represent the underlying company, and silver stocks represent silver mining or exploration companies, as well as companies that actually mint silver products.
7. Silver Exchange Traded Funds- Exchange traded funds that specialize in silver are basically mutual funds with special considerations that trade on the open exchange just like a stock does. These funds are supposed to be backed by actual silver bullion but there have been questions about whether this is actually true or not. These funds can be risky for some investors, especially if the silver held by the fund is less than the shares owned by investors.