Investors traditionally look to the precious metals markets when the economy gets iffy. A weak dollar, high oil prices, and rising inflation are sure signs that the metals market is starting to look good for all kinds of investors. The big investor isn’t likely looking to buy large quantities of the physical metal, no more than the small investor is going to sink thousands into investment funds. The middle ground could be in silver bullion.

There is no crystal ball that tells us where spot (current buy/sell price of) silver will be six months from now. It seems, however, that the recent (summer 2006) trend in the price of silver is to hover around the $12 per ounce range (about $13 per ounce for winter 2007 and spring 2007). It’s truly anyone’s guess what world politics and the economy is going to go through over the next twelve months. If you’re a pessimist and predict bad things are going to happen, silver could surge towards that $20 per ounce threshhold. If, on the other hand, you’re more optomistic, silver prices will likely remain somewhat stable. Somewhere in the middle are silver prices that edge towards the $15 to $16 per ounce level.

Something to consider is the fact that silver mining is usually secondary to other mining operations. Most mines are focused on other types of metals mining. Consider also the fact that the bulk of silver mines are in volatile parts of the world. Consider that in the U.S., silver mining is on the wane, with its silver resources almost depleted. Finally, consider that there is an increase in the industrial use of silver. So, what should the average investor do?

I tend to think silver bullion investors are conservative and cautious. In my opinion, buying a reasonable amount of silver bullion or silver coins is probably a pretty good idea. In my opinion, diverting a reasonable percentage of your investments towards the silver market will likely give you a better return than other market investing. If you do decide to invest in bullion, remember that bullion coins, such as the U.S. Eagle, the Canadian Maple Leaf, and other bullion coins, will typically sell for a few dollars above spot prices (depending on the year and mintage). Silver bars and rounds usully sell closer to spot prices. Spot prices of silver and gold can be found on larger precious metals dealer’s websites like Monex and Kitco.

One nice thing about moderately investing in silver bullion is the uniqueness of being able to keep a very tradable commodity on hand.

Thank you for reading this guide!