Saturday, June 14, 2014

How Much Is Silver Worth To You

By Jessica Drury


The talk shows are full of the high price of gold, especially since the soundness of the American dollar seems to be eroding. However, gold prices rise and fall regularly enough to scare many. It may be time, however, to consider another precious metal as a hedge against hard times. Finding out how much is silver worth to you today and in the future is considered a survival skill by many financial advisers.

Just like learning about the stock market, understanding how gold and other valuable metals are valued, bought, and sold is necessary to make wise decisions. The difference is that stocks are shares in corporate entities, while metals are tangible assets and are traded in the commodities market. Many people feel that owning units of precious metal is a way to secure the future.

Silver and gold can be bought in bars, called ingots. They also can be made into coins. Ingots have a value according to their weight. The same is true for coins, although they may have added value if they are in mint condition, are rare, or have historical significance.

The 'troy ounce' has been used to weigh silver for centuries. This system, developed in France during the Middle Ages, sets twelve troy ounces to a troy pound; these ounces are slightly heavier than the ones used to weigh sugar or flour. Ingots range from 100 troy ounces to 5,000.

Prices for precious metals are very volatile. They are affected by consumer confidence in the dollar (the world reserve currency), by politics, by supply and demand, and by the value of other world currencies. If the dollar is 'weak', precious metals will be 'strong'. People who buy these metals for investment hope to be able to buy cheaply and sell when prices are high, thereby reaping a profit.

Of course, there are other measures of worth than the commodity market. Some advisers say that, in times of emergency, people would have a hard time buying food or other necessities with ingots of gold, for instance. They say having a hoard of coins makes more sense, since they are a familiar form of exchange and merchants are more likely to accept them. If the main reason for having silver is for emergency use, 'junk-silver' might be the most valuable investment.

'Junk-silver' is what coin dealers call American coins with merely intrinsic value. Their worth is calculated according to the weight of precious metal in them. Dollars, half-dollars, quarters, and dimes dated before 1965 are 90% pure. On troy weight value, a dollar would be worth over $10 on today's market. Some survivalists recommend having $1,500 worth of 'junk' for each member of the family, to be used in case of an emergency to buy necessities.

Therefore, the true value depends on the reason you are collecting the metal. An investment for trading is one thing, an emergency hoard another, a carefully-selected coin collection still another.




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