Silver Price

Silver is one of the most popular of precious metals, having been used for money for thousands of years as well as in jewelry, tableware, utensils and in recent years, electronic contacts and other equipment. Silver has been used in photographic film, as a disinfectant and even in the healing field.

The price of silver fluctuates daily and be quite volatile at times. Such factors as industrial use, stored value depending upon economic factors in world markets, as well as being used a form of money, all can affect the perceived value of silver as an investment or hedge against economic downturns.

The silver price, in fact, often tracks the gold price due to store of value demands, although the ratio between them can vary. During most of the 19th Century the ratio between gold and silver was fixed by law in Europe and the US at 1:15.5. So one ounce of gold would buy 15.5 ounces of silver. Over the years of course this has changed. During the 20th century the ratio was 1:47.0 and now is more like. 1:55.0. So the gap, as it were, appears to be widening.

Despite this the trends of both gold and silver price remain remarkably the same and silver remains a good investment for stored value, perhaps even more than gold. Part of the reason for this is that, while all of the gold produced remains in existence, silver gets used up mainly in industrial and photographic use. Gold can be recycled and reused, keeps, passed from hand to hand. Of course silver can do the same but the quantity of silver needs to be constantly replenished due to about 5-10 percent being lost each year.

This means that the price of silver remains very healthy and, with an impending shortage on the way due to less silver being mined and yet more being used each year in industry as well as investment hording, the price of silver is going to continue to be healthier and healthier as time marches on.

Silver rounds and bars are probably one of the best ways to invest in silver. The price, when you buy silver from a good dealer, is a smart move. It is a medium to long term investment and can serve as a back up in times of economic stress and need.

One very useful way of purchasing silver is through Gold Money. Here you can buy silver almost at the spot price and have it stored in a Swiss or London bank.

One big advantage with silver is that, due to the price of silver ounces compared to the price of gold by the ounce, you can buy a lot more silver and quickly accumulate a sizable nest egg very quickly.

With the price of silver likely to rise as the value of currencies fall, this can only be a good move.

Price of Silver Dollars

The price of silver dollars is probably reflected in the fact that past issues of silver dollars are one of the most popular coins for collectors and investors alike.

Silver Dollar coins were first minted after The Coinage Act of 1792 authorizing the production of dollar coins from silver.

The U.S. Mint then produced silver dollar coins from 1794 to 1803 when they ceased regular production of silver dollars until 1836. The first silver dollars, 1,758 of them in fact, were coined on October 15, 1794 and immediately delivered to the then Mint Director David Rittenhouse for distribution to dignitaries as souvenirs. Thereafter, until 1804, they were struck in varying quantities.

Apart from the Indian and Liberty head gold dollar coins, the later dollar coins are not so popular as they do not contain any gold or silver and the silver dollar really ended with the last of the Silver Peace Dollars issued in 1935. Possibly the decreasing value of the dollar played a part in the discontinued use of silver in the dollar coin and the magic of the ‘Silver Dollar” is now a matter of history and for collectors and numismatics.

Silver and Gold Dollar Coins produced by the US Mint include:

Silver dollar coins
Flowing Hair 1794–1795
Draped Bust 1795–1803
Draped Bust, Small Eagle 1795–1798
Draped Bust, Heraldic Eagle 1798–1803, 1804 (not a regular issue)
Gobrecht Dollar 1836–1839
Seated Liberty 1840–1873
Seated Liberty, No Motto 1840–1865
Seated Liberty, With Motto 1866–1873
Trade Dollar 1873–1878 (Business & Proofs struck), 1879–1885 (Proof Only)
Morgan Dollar 1878–1904, 1921
Peace Dollar 1921–1935
Peace Dollar (High Relief) 1921
Peace Dollar (Low Relief) 1922–1928, 1934–1935

Gold dollar coins
Liberty Head (Small Size) 1849–1854
Indian Head (Large Size) 1854–1889
Small Indian Head 1854–1856
Large Indian Head 1856–1889

Copper-nickel clad dollar coins
Eisenhower Dollar 1971–1974, 1977–1978
Eisenhower Bicentennial 1975–1976 (all dated 1976)
Susan B. Anthony dollar 1979–1981, 1999

Manganese-Brass dollar coins
Sacagawea Dollar 2000–present
Presidential Dollar Coin Program 2007–present

The 1804 silver dollar warrants mention as one of the rarest and most valuable coins in the world.

It started out as a bookkeeping error as silver dollars reported by the mint as being struck in 1804 were, in fact dated 1803. Due to the fact that the dies used to make coins were very expensive, they were used to destruction and, as a consequence, many coins in the US from 1793 right through to 1825 has examples that were struck in a year different to that which is shown on the coin. No dollars were actually struck in 1804 that bore the 1804 date.

So how come we still have silver dollar coins bearing the date 1804?

Well this coin was actually produced in 1834 when the US Department of State decided to produce a set of US coins covering all the dates to be given to visiting rulers in Asia. Since 1804 was the last recorded mintage for the silver dollar and the 10 dollar eagle it was decided to make new dies to strike 1804 dollars. Very few actually were struck with only 15 currently known to exist. Just as an example of how rare and valuable coins can be, one of these 1804 silver dollars was sold at action not long ago for 4 million dollars.

It is considered that they may be more out there unknown until they surface. So always check every silver dollar you come across. You never know....

Silver Futures

Silver Futures can be a confusing subject for many people. After all what has it to do with how to buy silver? To understand silver futures, one needs to understand firstly what a futures contract is.

What is a Futures Contract
A futures contract is a contract, traded on a special stock exchange called a futures exchange. The idea is to buy or sell, what is called, a certain underlying instrument, in this case silver, at a certain date in the future, at a specified price. Basically it is a bet that something will be worth something at sometime in the future. This gives new meaning to the word nebulous as no one can predict with accuracy what the value of a commodity will be at some date in the future. You can, of course, find heaps of experts that give advice or guidance but, intimately, no one really knows what the price is going to be.

Obligations of a Futures Contract
A futures contract is different to an option. Whereas with an option the holder simply has an option to buy or sell, the futures contract contains, as part of the contract, an obligation. You are required by law, in other words, to pay.

Both parties of a futures contract must fulfill the contract on the settlement date unless you opt to roll over in to the next months contract. Then cash is transferred from the futures trader who sustained a loss to the one who made a profit. Most futures trading is done on a cash settlement basis these days.

Do Future Traders Lose Money?
The US department of Agriculture did a study one time and found that 75% of people that speculated in futures in agricultural commodities lost their money.

In fact many investors have lost entire fortunes speculating in futures.

What are Silver Futures?
Silver futures are simply futures contracts where the commodity is silver. This is usually in the form of weight.

Futures contracts, or simply futures, for silver are usually 5000 troy ounces, One would trade in parcels or multiples of 5000 troy ounces, (although In November 2006, the National Commodity and Derivatives Exchange (NCDEX) in India introduced 5 kg silver futures) and the exchanges clearinghouse would act as counterparty on all contracts, setting margin requirements, and so forth.

Silver futures and options, currently trade on many exchanges around the world. In the U.S. it is primarily traded on COMEX (Commodity Exchange), a subsidiary of the New York Mercantile Exchange. Other major trading countries all have own futures and options (called derivatives) trading floors.

In short, silver futures are a bet that the price of silver is going to be at a specific price at some time in the future. This could be a high or a low price. If you are wrong you have to cough up the money, if you are right, you get the funds to the value of the current silver price on settlement day from the other trader

How Does a Silver Futures Contract Work
You simply agree to buy, say for example 1000 ounces of silver, in three months to the day at 6 dollars per ounce on that day. That future date is called the delivery date or final settlement date. The pre-set price is called the futures price. The price of the underlying asset on the delivery date is called the settlement price. If an ounce of silver on that day is worth 10 dollars, you win as you are only paying 6 dollars for an ounce of silver that is considered to be worth 10 dollars. You would have made 4 dollar an ounce profit. and the seller loses as you are only paying 6 dollars for something that is worth 10 dollars. If the price of silver goes down in the interim to 3 dollars, then you will find yourself paying 6 dollars for something worth only 3 dollars. That is a nasty situation to say the least. You will have lost half your money! Of course you do not get the silver. It is all a cash transaction so you cannot, if you lose, collect the silver and hold onto it in the hope it will go up again and you can sell it. However t you can roll it over into another contract.

The big issue here is the leverage. You don't have to pay up front all that you are buying,. Only a percentage of between 1 and 10 percent. Of course if you win you can win a lot of money. Most people lose and that means they do not just lose the 1000 dollars they put down but the entire amount they bet.

e.g. 5000x16.7USD (shall we say, is equal to 835900USD traded. So you only pay 835US Dollars with a 100:1 margin and control 83500 worth of silver. But if the price goes down by just 1 percent, you have now lost your initial cost of purchasing the futures contract and if it goes down by even more, such as 10 percent, as can happen in a flash, you start to lose some serious money. If you don't have sufficient funds in your account, and this happens to so many people, you are liquidated immediately if you cannot met the margin call within a few minutes.

You have to have sufficient funds to back up your call so you can ride out the dramatic changes that can occur from one moment to the next.

This is all done on a cash basis in most markets and in practice you would be working with a dealer so there is no "taking the silver and run."

This explains why silver futures traders are usually professional dealer with large capital bases who are buying and selling for large institutions. And even they can lose big time.

Quite honestly you would have a far better chance of winning at the casino.

Should you Buy Silver Futures?
Our advice is to not trade in silver futures unless you have many years of experience, more money than you could ever possibly want and a devil may care attitude. Silver futures require considerable experience and knowledge and even then, many an expert trader has come unstuck trading futures.

In answer to the question, should you buy silver futures, the short answer is no.

One should not buy silver futures, one should buy silver bullion instead.

Buy Silver in the UK.

There are a few points to consider if you want to buy silver in the UK.

Silver has been on a steady incline for some years. The accompanying chart shows that silver is on a 10 year rise and likely to so continue when you consider the world wide shortage of silver as well as the economic instability of world markets.

So, how does one buy silver in Britain or the UK ?

Unless your into silver for the very long term, it is better to buy silver in the UK rather than from overseas such as the US for example. Principally because of the tax considerations and shipping costs.

Tax on Silver
The customs and duty one pays to import silver into the UK is around 15 percent, plus you have the shipping costs which can be anywhere 3 to 5 percent. Moreover, the carrier is going to charge you for collecting the tax adding a further 8 to 16 pounds to the injury. It is even possible that would exceed the cost of the tax itself. That has gotta hurt!

This makes it unsuitable to import silver for investment and even for collectors unless price is not a consideration of course.

However, one can buy silver overseas and if it is kept overseas and not imported into the UK then you will not have an issue with the tax man. If you sell that silver at a profit however you will be liable for tax as a British tax payer.

So it would seem the best silver is the silver you can buy in the UK.

Buy Silver in the UK
There are some points worthy of mention here also.

There are not very many silver coin dealers in the UK surprisingly. You can buy silver in the form of bullion bars on eBay where private individuals and dealers generally trade. The issue here is that the premiums are high and if you want to buy silver for investment or to retain asset value, you need to look for that silver with the lowest premium.

Unlike gold, silver is not VAT exempt and, even on eBay you will find VAT will be added to the purchase price.

However, VAT is only payable on silver if the seller is VAT registered. The government says they want to encourages small businesses by allowing them to sell VAT discounted goods. This seems to have no effect on silver prices, however, since buyers do not distinguish between registered and non-registered sellers and generally do not care. Price and genuineness is a more major issue for buyers.

It takes a good sort around to find silver bullion with a low premium. Sometimes it might be worth while importing 1000 oz bars if the premium is really low and the VAT can be absorbed by the increase value long term.

As the silver price climbs higher the premium is likely to narrow for specific weight bars as the manufacturing costs, shipping and other costs remain the same, Only the value of the silver is different.

Silver coins generally have even higher mark ups than bars and, although they may be good for the numismatic coin enthusiast, they are impractical for the silver investor.

Old Silver Coins
However one solution which many British people employ is to accumulate old florins, half crowns and shillings. These are pre-decimal coins phased out in the early 1970s. Those coins minted prior to 1920 contain 92.5 percent silver, those from 1920 to 1947 are 50 percent silver.

These can often be bought in bulk at a relatively low premium and have little value for coin collectors, due most likely, to them being worn coins and not of collector quality. But they do contain silver! And, importantly, there is no VAT on their purchase.

Mostly these are for sale by coin dealers and likely on eBay

Silver Investments in the UK
Other options for buying silver in the UK are silver EFTs, mining stocks and Silver Accounts.

Silver EFTs, or exchange traded funds, are simply accounts where the silver is held by a bank or some such institution as custodian and your account represents your holding of silver by that institution. The advantage here is the easy of transactions, no shipping, storage or security issue to contend with. Barclays silver ETF is a good example of a silver EFT.

Mining stocks are another way of investing in silver. These are not so assured however since the mining company you are investing in may have other interests, such as other metals which may not be so favorable as silver in the market place. Plus various management policies, buying and selling of companies and takeovers, etc, all can affect the share price.

goldmoney.com is a company where you can open a silver or gold account and deposit funds which are used to purchase gold or silver. That gold or silver is kept in bank vaults and your amount of gold or silver is reflected by your purchase. This can be done through a broker or you can even do it yourself by going to goldmoney.com.

Cashing in your Silver in the UK
There are some implications to consider if and when you want to cash in silver in the UK. If you make a profit on a sale of silver you are up for the unpopular Capital Gains Tax (CGT). There are some changes in the wind with this tax apparently but analysts expect it to eventually be a flat 18 or s percent with none paid on the first £9,200 which could be shared with a partner.

You could offset some of the CGT on profits by investing in a Individual Savings Account (ISA). This can be as much as £7,000. This only applies to shares and EFTs however, not silver bullion.
Anyway by a judicious use of tax allowances one can legally avoid paying tax on the first £32,400 (about $65,000) of silver profits.

When the end of the tax year on April 5th is nearing, one could then maximize one's silver profits by selling just enough of one's silver before April 5th using up as much of the tax free allowance for that tax year and then repurchase again to take advantage of the following year allowance. Of course this strategy will depend on how much it costs to sell and buy back the silver plus other factors such as your own personal financial position. In all cases, with anything to do you’re your tax position and financial arrangements always consult your own personal financial advisor.

So there you have it. It is possible to buy and sell silver profitably in the UK provided you spend some time doing due diligence before you buy silver in the UK

Silver Stocks

To buy silver stocks, as distinct to actually buy silver bullion is precarious and subject to many other factors than just the price of silver.

Silver mines produce around 650 million ounces of silver a year. Plus about 200 million ounces from scrap recycling, and 100 million ounces from investor selling, or government selling. That's a total of around 950 million ounces a year.

Of all that silver just over 40 percent is used by industry, 28 percent in jewelry, an additional 20 percent in photography and around 5 percent in coins and medallion. That comes to 95 percent of the total silver available.

So there is an apparent 5 percent available for investment but, as investment is starting to increase this percentage is diminishing rapidly.

Silver consumption has been increasing since the 1950s and an increasing percentage is 'lost' in consumption each year due to deterioration, destruction and hoarding.

It has been estimated that there is only around 200-300 million ounces of silver available to the market at the present time and about 125 million ounces of silver at the NYMEX, the big commodity exchange in New York.

Silver Stocks & Shares
Stocks and shares are not silver but an investment into a company that either mines or explores for silver for future mining. Few companies actually mine silver as a stand along product as silver is usually found along side or with other minerals such as tin, copper, lead or zinc. Companies will mine whatever minerals they find and process to extract all the minerals available.

So, in fact, one is rarely investing in a silver mining or exploration company per sec. Shares are, then are a base metal investment, not really a silver investment.

This puts a completely different picture on the investment as the value of the shares and not related directly to the production of silver but to other factors, which may be the production of other metals, the success of the exploration as well as the cost of production per ounce to extract the silver.

In addition there are usually internal company influences, such as management policies and decisions, external influences such as company competition, economic and market forces

To spread their risk, then, some silver investors prefer to spread their risk by investing in precious metal mutual funds rather than one individual company.

Silver Mining Companies
If you find a silver mining company that mines principally silver in which you want to invest, the most important points to consider are, how much silver does the company have in the ground and how much does it cost to extract and refine it.

Finding out how much silver he company has title to and owns in the ground and then dividing the market capitalization of the company by those ounces will tell you if it is sufficient to warrant an investment.

In this way you will find out the cost per ounce of production and then how much you are paying for what you get.

Some CEOs will try and convince their investors that their ounces are better than the next mans. This is not about the quality of the refined silver. That is the same company to company. What it means is that they are saying that the cost to produce their silver is less and therefore their profits are going to be greater and the dividends to shareholders will be bigger.

So remember the two important questions, when considering an investment in a company are: How many ounces do they have? And How much does it cost to produce those ounces.

It's very simple. Cost per ounce in the ground. How much do you get, and how much does it cost?

Silver Stocks or Silver Bullion
Investors want to invest in as close to a certain and secure investment as possible. With silver companies, such as minding and exploration, there can be fantastic gains to be made, but the risk is very high and the number of variables make it a precarious investment compared to having silver in your hot little hand.

Owning one kilo of silver in storage is worth one kilo of silver regardless of the price. Owning one kilo of silver represented by an investment in a mining company can be wildly different, particularly if the company has other issues that affect the share price and regardless of the actual value of the silver.

Historically the price ratio between silver and gold was always around 10 ounces of silver to one ounce of gold. Recently however the ratio has increase with over 50 ounces of silver to one ounce of gold. Even though the trend of both metals as remained the same the gap between then has widened.

Silver is grossly undervalued right now and there is a lot of room for decreasing the gap between silver and gold. When it comes to silver stocks, an ounce in the hand is certainly better than two ounces in the bush.

Silver Dollars

One of the first places to find silver coins was in Germany in the late 15th century, where one finds silver coins being used called the Talers. This word has been translated from the German into many other languages including English resulting in the words daler, daaler and eventually dollar. So the word dollar is not unique to the US.

Why Buy Silver Dollars
There are some investment advantages to be gained, for example, when you buy silver dollar bags. These feature highly sort after and collectible silver dollars. One of the investment advantages, in addition to known numismatic value (all silver coins should assess at the grade of Very Good or higher) is that each bag contains a sizeable quantity of actual silver.

Silver dollars are also legal tender in the US and can be very effective forms of barter in small increments as well as entire bags. Silver dollars are recognized world wide and you can exchange them practically anywhere.

In addition, your asset or wealth, stored in the form of silver dollars, will increase as the years go by with the current steady rise of the value of silver.

Yet another advantage is that when you buy a silver dollar bag that bag has a built in guarantee. Regardless of the price of silver, the face value of the coins in the bag (legal tender remember!) are always going to be $1000 dollars. So if the value of silver ever did drop below the value of the amount of silver in your bag (unlikely), you would still have 1000 dollars worth of coins.

History of the Silver Dollar
Many of these early examples of silver coins can still be found in museums, private collections and, who knows, perhaps many more may be found on future treasure hunts down the track.

Closer to present day, The minting of silver dollars in the US began in 1794 as a result of the Coinage Act of 1972. the United State Mint produced silver dollar coins up to 1803 when production was stopped until 1836 when it was then resumed.

1,758 silver dollar coins were first issued in October 1794 and these were used to distribute to visiting VIPs. Coins after that initial strike were in varying quantities and designs. As a result of the early practice of hand engraving many different designs were instituted including two obverse designs, the Flowing Hair (1794-1795) and Draped Bust (1795-1804) and the two reverse designs used for the Draped Bust variety, the small eagle (1795-1798) and the heraldic eagle (1798-1804).

All these coins are highly prized and much sought after by coin collectors.

Latter Day Silver Dollar Coins
The term silver dollar is sometimes incorrectly used to describe any large white metal coin. A silver dollar in fact should contain silver and the fact that a coin is white and large does not mean it does contain silver or that it should be called a silver dollar coin.

A silver dollar should contain a quantity of silver and early silver dollars are usually of pure silver or mostly contain silver with an alloy of another metal to improve its durability.

The Silver 1804 Dollar
This is perhaps the most well known of the silver dollars. It is also the rarest in that was not actually struck in 1804. No silver coins were in that year. was not actually in 1804 . In fact they were struck in 1834 for the purposes of presenting gifts to Asian rulers at that time in exchange for trade advantages.

The then mint officials, not realizing that the 19,000 plus dollars recorded as being produced in 1804 were all dated 1803, then proceeded to make new dies dated 1804. Only 15 of these silver dollars with the date of 1804 are known to exist. In 1999, one of them was sold by auction for over million US dollars.

The Morgan Silver Dollar
Produced from 1878 to 1904 and, after a break in production, resumed again in 1921. The Morgan Silver Dollar is very popular with a real collectors market for the pre 1921 uncirculated or mint condition issues. The post 1921 are also popular but are more common and do not command the high prices the earlier issues do.

The coin was named after it's designer, George T Morgan. George T Morgan was born in Birmingham, England and came to the US to work in 1876, getting a job as a junior engraver in that year. Morgan designed a number of coins but will always be remembered for the Morgan Silver Dollar

There are a number of different Morgans and half the fun in collecting these is studying up on the 'Morgans' and picking out which ones one would like to collect.
The Pittman Act of 1918 ordered that 270 million silver coins be melted down. As a consequence it is estimated that only about 17 percent are in existence today
You are going to need a lot of money as some have sold for the princely sum of three quarters of a million dollars or more.

Peace Silver Dollar
The Peace Silver Dollar is another coin that is popular with coin collectors. The Peace Silver dollar was designed by Anthony de Francisci to promulgate the signing on=f formal treaties between the allied forces and Germany and Australia. It was introduced in 1921 and in 1922 the Mint made all silver coins their top priority ceasing only in 1928. With the Great Depression no coins were minted until 1934 when it was resumed for two years.

Moving right up in time, over 300,000 Peace Silver Dollars were minted in 1965 at the Denver Mint and dated 1964, however these were never completed and virtually all were melted down again. It is believe that a few choice specimens are owned by certain Congress members and Presidents of the US. Curiously it is the only coin in the US that is illegal to 'own' and may be confiscated if found.

Other Silver Dollar Coins
There are other silver coins of course, some dollars, some not. Collecting silver dollars is an interesting activity, particularly if you have oodles of money. It is an activity for collects as a hobby rather than for investment purposes. A silver investor would be more likely to buy silver rounds or silver bars.

But silver dollars have a magic all their own. Who has not seen the cowboy in the movie flicking the silver dollar in the air. And another catching it!

Silver EFT

Silver EFT or silver exchange traded funds are a relatively new way to invest in silver. They offer a convenience for the busy investor who does not want the hassle of taking delivery of pure silver and the additional problems of storage and security.

Exchange Traded Fund Defined
EFTs are portfolios of securities rather like a mutual fund, that are actively traded on a stock exchange in the same way are shares of common stock).

There are over one hundred ETFs traded on the US Stock Exchange, with many more in other countries. ETFs having gained popularity over the years ever since they were introduced on the US Stock Exchange in the mid 1990s

What are Silver EFTs
Silver EFTs are a special type of exchange traded fund. These types of funds are only track the price of silver much as gold EFTs track the price of gold. Silver exchange traded funds are traded on all the major stock exchanges including London, Paris and New York.

When a person opens a silver exchange trade account they then buy in silver and their holding is an amount of silver represented by their account. The silver is stored in vaults around the world, usually in 1000 ounce silver bullion bars. If one has paid in say, for example, 5000 USD into a silver exchange traded account, one would own that equivalent of silver expressed in ounces less any charges. Usually a commission of 0.4% is charged for trading in silver ETFs and an annual storage fee is also charged as of course one actually owns the silver.

Tax considerations can be a drawback however. In some countries, ETFs may represent a way to avoid the sales tax which would apply to physical silver coins or bars but in the UK be aware that VAT may be charged on even overseas purchases and many countries will have tax considerations to watch for. It is suggested that you discuss with your financial adviser before embarking on any silver exchange traded fund activity.

Silver exchange-traded funds (or ETFs) can be a quick and easy way for an investor to gain exposure to the silver price, without the inconvenience of storing physical bars.

The other viewpoint is that one's silver is more subject to the vagaries of the market when entrusted to others. many people feel more secure holding their own silver and storing it either in bullion bars or silver rounds.

Some silver ETFs are:

iShares Silver Trust (NYSE: SLV), launched in April 2006 by iShares.
Central Fund of Canada (TSX: CEF.NV.A, NYSE: CEF) has 45% of its reserves held in silver with the remainder invested in gold.
In September 2006 ETF Securities launched ETFS Silver (LSE: SLVR) which tracks the DJ-AIG Silver Sub-Index, and later in April 2007 ETFS Physical Silver (LSE: PHAG) which is backed by allocated silver bullion.

There are many others. While silver EFT may be a convenient way of investing in silver there is really nothing quote so satisfying as actually having and handling one's own silver bars and coins.