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Gold Investing Vs Silver Investing

Author : Ahmad Hassam


         


Silver has numerous practical uses that make it an attractive investment. Silver is a commodity that has the potential to rocket three times more than the gold in this decade. Silver has far more industrial uses than gold and as the global economy comes out its recession, it demand is going to skyrocket. Silver has many industrial applications such as conducting electricity, creating bearings, welding, soldering, brazing, photography, washing machines and many more.

Silver can play an important role in your portfolio. Because of its precious metal status, you can use it as a hedge against inflation. Now, you can invest directly in silver by buying and selling silver coins and bars. Two popular silver coins are the Silver Maple Coins (produced by Royal Canadian Mint) and the 100 oz. Silver Bar. Silver futures contracts like the gold futures contracts give the most direct access to the silver market. The most liquid silver futures contracts are the COMEX Silver futures contracts. This is the standard silver futures contracts that get traded on the COMEX Division of NYMEX. The other is the CBOT Mini-Silver. This contract is available for electronic trading.

ETFs ( Exchange Traded Funds) have become highly popular in the last two decades. They give you the benefits of both stocks as well as mutual funds. Now, you can find many ETFs tracking a basket of commodities. You can find Gold ETFs as well as Silver ETFs. The most popular one is the iShares Silver Trust Fund that is managed by the Barclays Bank. The bank hold the silver bullions in its vault. This ETF tracks the spot price of silver. So by investing in this ETF, you can profit from the silver price volatility. However, right now there might not be many ETFs that solely track this commodity. As the demand for silver increases and its price skyrocket, you will soon find many new ETFs tracking this precious metal.

Another alternative method of investing in silver is through investing in the stocks of silver mining companies. Although some of the larger mining companies have a silver mining operation, however, you can get direct exposure to the silver market by investing in companies that specialize in mining this precious metal.

One of the silver mining companies is the Pan American Silver Corporation. It has got six mines. Some of these mines are located in Peru, Mexico and Bolivia. Another silver mining company is the Silver Wheaton Corp. Many silver mining companies have smaller interest in other metals too. This is one of the few companies that generate all its revenues from silver mining activities.

Trading Silver futures in my opinion is the best way to get direct exposure to this precious metal market. You can trade these futures contracts electronically. Now, if you are new to futures trading, you can practice for a few months paper trading. Meanwhile try to learn the intricacies of the silver market. This way, you can specialize in trading silver futures!


Author's Resource Box

Mr. Ahmad Hassam has done Masters from Harvard. Know this Shocking Dow Futures Trading Secret that can make you rich. Turn $200 into $100K in just three months with this Penny Stock Trading System.

Article Source:
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Tags:   silver investing, investing in silver, silver trading, trading silver, silver coins, silver futures, silver stocks, silver ETFs

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Submitted : 2010-02-09    Word Count : 1    Popularity:   107    Times Viewed: 6   zero times read