Few markets are as depressed – and, as many analysts argue, suppressed – as silver. Prices for the white metal continue to languish in a low-level trading range amidst lackluster demand.
The upshot for investors is that they can now obtain silver bullion at both a low spot price and a low premium above spot.
How long this buyer’s market will is unknowable last. But given silver’s manic-depressive personality, prices could launch explosively higher at any time.
The silver market now sits enticingly close to a major upside breakout.
The weekly silver chart shows a potential double bottom forming at the September and November low points.
Prices will need to clear the $14.75 - $15.00/oz resistance zone before bulls can finally celebrate a rally of some significance. [Silver prices entered this zone this morning.] For the moment anyway, value investors can continue to take advantage of fantastic bargains in the silver bullion space.
Silver for Barter and Trade
One of the top attributes of silver is its versatility. It comes in a wide range of shapes and sizes, including some that are particularly well-suited for barter and trade.
Silver is often overshadowed by its pricier counterpart, gold when it comes to discussions of sound money. Yes, gold is more likely to be held in reserve as a monetary metal for backing a currency. But silver is more likely to be exchanged by individuals in actual, everyday transactions.
It isn’t practical to pay for a cup of coffee using a gold coin. Factional-sized silver coins, however, can closely approximate the prices of just about anything on a coffee shop’s menu:
- A 90% silver dime is worth just over a dollar in terms of its intrinsic metal content.
- A silver quarter, about $2.85.
- A silver half-dollar, $5.70.
- A half-ounce pure silver round, $9.00.
- And a one-ounce silver round, $16.60.
Pre-1965 90% silver coins may command additional historical/scarcity premiums above their melt value in the future. You can obtain them now at the best silver bullion prices, giving you a free “call option” on rising premiums.
Silver for Wealth Building
Every silver investor should have some small denomination coins/rounds for barter and trade. Beyond that, those looking to allocate significant wealth to silver will find larger-size products more cost-effective and more convenient to store.
Conventional one-ounce coins/rounds are a good place to start as they are widely recognized. Most privately minted rounds are just as pure (.999 silver) as more famous government-minted coins such as silver American Eagles.
The advantage to opting for products with no official coin status is they tend to carry lower premiums – thus giving you more metal for your dollar.
Serious silver stackers should consider larger bullion bars, which tend to be the most cost-effective way of building wealth in silver. Silver bars are available in 1 oz, 5 oz, 10 oz, kilo, 100 oz, and 1,000 oz sizes.
The 1,000 oz bars are generally not recommended except when held in a Comex depository. These bulky bars are difficult to handle and ship, and, unless held in a Comex warehouse, may need to be assayed before selling.
The largest bar most investors should consider owning is the 100-ouncer. It’s not too heavy to handle and can be easily sold back to dealers.
Silver for Displaying and Gifting
Sometimes you don’t want to buy silver based just on its melt value. Sometimes the best way to buy silver is based on its historical, educational, or aesthetic properties. Perhaps you want silver that is suitable for displaying prominently in your office or giving to loved ones for Christmas.
If you’re looking for affordable bullion gifts that come ready to give, consider some holiday-enhanced Silver Eagles. Money Metals Exchange is pleased to offer the world's most popular silver coin – the American Eagle – packaged in an exclusive "Merry Christmas" capsule.
This gleaming pure silver coin is a great alternative to cash, gift cards, or other run-of-the-mill presents. It is virtually guaranteed to bring bigger smiles to people’s faces than the equivalent value represented in paper or plastic.
Silver Eagles can also be gifted, on any occasion, inside a beautiful wooden display box.
The gift of precious metal can be cherished for years or even decades to come.
It can help teach children about the value of money, the risks of inflation, and the long-term benefits of saving.
Another great teaching tool every sound money advocate should have on hand is the Silver versus Zimbabwe Dollar Display. The Display contains a 1 oz silver American Eagle as well as an authentic Ten Trillion Dollar Zimbabwe banknote. The essential question is posed – “Which Has Real Value?”
The Zimbabwean hyperinflation of 2008 - 2009 is one of the most dramatic recent examples of an irresponsible government destroying its currency. Whether U.S. Federal Reserve Notes hyperinflate to multi-trillion-dollar denominations remains to be seen – perhaps by future generations.
Like all fiat paper currencies, the U.S. dollar stands to depreciate over time against hard assets, including silver.
About the Author:
Stefan Gleason is CEO of Money Metals Exchange, the company recently named "Best Overall Online Precious Metals Dealer" by Investopedia. A graduate of the University of Florida, Gleason is a seasoned business leader, investor, political strategist, and grassroots activist. Gleason has frequently appeared on national television networks such as CNN, FoxNews, and CNBC and in hundreds of publications such as the Wall Street Journal, TheStreet, and Seeking Alpha.
