How to Invest in Silver

There are various factors that affect the price of Silver. Some of those factors are: Private and Institutional Investors, the large concentrated short position and Industrial demand.

From 1973 the Hunt Brothers began to corner the market. They bought enough to cause the spike in 1980 to $49.45 per troy ounce. Soon after the price fell back down due to the New York Mercantile Exchange and the intervention of the Federal Reserve. In 1997 Warren Buffet purchased 130 million troy ounces of silver. Also, in April of '06 iShares launches a silver exchange traded fund which is called the iShares Silver Trust. As of April '08 the iShares Silver Trust held 180 million troy ounces of silver as reserves.

The large concentrated Short Positions in silver also contributes to the price. As of April '07 it shows that the four or fewer largest traders are holding 90% of all short silver contracts. The total between these traders is equal to a total short of 245 million troy ounces. This is the equivalent to 140 days of production.

Industrial Demand is one of the major factor that influences the price of silver. Although silver is relatively scarce, it is the most plentiful and least expensive of the precious metals. 95% of annual silver consumption comes from the three main areas of industrial uses, jewelery, silverware, and photography.

What types of Silver Bullion are available?
- Silver Nuggets
- Silver Bars or Wafers
- Silver Coins

Silver nuggets are rare, and can be difficult to judge their true value. If you are new to investing in Silver I would avoid the silver nuggets and lean more towards the Silver Bullion or Silver bars/wafers.
Silver Bullion bars or wafers are a better option because they are produced to specific standards and each bar is marked. You can purchase a bar from 1 ounce, up to 1000 ounces.
Each Silver Bar should be stamped with the amount of silver content, the fineness degree (should be no less than 999.0) and the name of the mint in which it was struck.
Silver Coins are also very popular among Silver investors. Some of the most popular investor coins are the American Silver Eagle, the Canadian Silver Maple Leaf and the Australian Silver Kookaburra. Each of these coins is exactly 1 troy ounce of Silver.