Silver

There are several options available for making investments in silver. Some of them are:

• Bullion & coins: Investors can buy bars of silver (99.9% pure). Governments around the world issue silver coins which can be purchased and stored.
• Certificates: Investors can invest in gold by buying certificates, which does not involve taking the delivery of silver immediately. The certificate guarantees the delivery of the purchased quantity when desired.
• Future & Options: Investors can trade in silver through commodity exchanges.
• ETFs: There are several ETFs available that invest in silver. These ETFs mimic spot prices of silver. ETFs purchase physical silver and store them in highly secure vaults. The ETF route is considered as a good option for investors as they do not have to worry about physical storage and security.

Silver is known to be the best conductor of electricity. It is also a good conductor of heat. These properties make it suitable for manufacturing of solar panels. Demand for silver from the auto industry is set to increase substantially in coming years. It’s use in modern-day hybrid and battery-operated vehicles is on the rise. Fossil fuel-based vehicles are also witnessing an increase in the use of electronics, thus boosting the demand for silver.

It’s a ratio of gold price per ounce to the silver price per ounce in the same currency. Suppose gold is at US$1,800/oz and silver is trading at US$20/oz, then the Gold-Silver ratio would be 1800/20 or 90.

This ratio is used by traders to decide on taking long or short positions in gold and silver. If the ratio is too high, it could be inferred that gold prices have moved upside considerably or silver prices have dropped significantly. Based on this, investors make a call to go long in silver and short gold or vice versa.