Tuesday, September 07, 2010
Why Silver May Be a Better Investment than Gold
Are you thinking of investing your money into a metal such as gold or silver? There are benefits to both, but silver may be the better way to go.
First, let’s face the fact that the difference between silver and gold prices is vast. Silver, one of the major natural resources, is much more in demand compared to gold, due to its industrial usage. Silver has many uses, everything from circuit boards to coinage to dentistry to cloud seeding to medicine. Approximately 600 million ounces of silver is mined every year, but the demand for silver is around 900 million ounces per year. The United States Mint has limited the amount of coins consumers can buy due to the massive growth in demand for the metal.
There are only a couple of way of producing silver: recycling and mining. The deeper the mine the more expensive it is to extract silver. There are several smaller mining companies which have recently become profitable due to the higher price of silver. The higher price also allows the companies to open new mines that were previously not profitable to develop.
One way investors can invest in silver is through one of the metals ETFs. For example, ETFS Physical Silver Shares (SIVR) has direct ownership of silver. E-TRACS UBS Bloomberg CMCI Silver ETN (USV) is designed to track the entire liquid forward curve of the silver contracts, by buying silver futures.
If you prefer the silver mining stocks, which can give you a better bang for the buck, check out Global X Silver Miners ETF (SIL) that invests in a basket of worldwide companies involved in the silver mining industry. Some of the ETF's largest holdings include Silver Wheaton (SLW), Fresnillo (FNLPF.PK), Industrias Penoles (IPOAF.PK), Hochschild Mining (HCHDF.PK), and Polymetal.
For a free list of silver and gold ETFs, which can be downloaded, sorted, and changed, go to WallStreetNewsNetwork.com.
Author does not own any of the above.