Investing in / Selling Silver

richtips86

I'm aware that silver is at a relatively low price for recent years.

I have fortunately got quite a lot of silver coins that I have inherited from various grandparents and parents etc. and wonder if anyone has an opinion / knowledge of what may happen to the price of silver over the next year or two.


This is in the context that I have recently got engaged so have a wedding to plan for shortly and so cannot decide whether to sell the coins I have and put in a high savings account (with possible increase in BoE BR) or, buy more silver in anticipation of higher prices in the next year or two with the possibility of making a small profit.


Any advice would be very much appreciated

bowlhead99

richtips86 wrote: »

I'm aware that silver is at a relatively low price for recent years.

People have been selling silver for hundreds years. Go back a couple of decades; in 93/94 it was $5 an ounce. A decade later, at end of 2003/ start of 2004 it was still about $5 an ounce. Five years later at end of 2008, it was $10. Five and a half years later it is just below $20. So, ignoring the noise from the credit crunch when equities fell through the floor and precious metals shot up temporarily, it has basically doubled every five or six years for the last decade. That doesn't make it relatively cheap.

This is in the context that I have recently got engaged so have a wedding to plan for shortly and so cannot decide whether to sell the coins I have and put in a high savings account (with possible increase in BoE BR) or, buy more silver in anticipation of higher prices in the next year or two with the possibility of making a small profit.

Unlike shares and government debt (bonds), metals do not produce an income. In fact, it's the opposite, as instead of being paid to own them, you're paying money to store safely or/and insure them.

This means that in times when QE is reducing and interest rates are rising, the price of metals will theoretically fall, as the metal which just sits there and doesn't produce an income, is relatively less attractive. So if you think BoE's BR and Fed rates are going up, you may find fewer people are inclined to have their fortunes stored shiny bits of metal instead of cash or bonds which pay interest or shares which pay dividends.

Commodities such as PMs can be useful to hold in inflationary times as the value of a shiny bit of metal may stay roughly constant in real terms -it is still a shiny bit of metal in 10 years time and if all other goods and services become more expensive, the lump of metal may be too.

However, if you look at recent inflation rates, CPI hardly appears to be going through the roof. The last few months have been somewhere in the 1.5%-2% range and it is not much different in the US. As the government and BoE have a target of 2% it doesn't seem we are in those hyper-inflationary times when gold and silver become extremely desirable to hold for a two year time horizon.

and wonder if anyone has an opinion / knowledge of what

Everyone has an opinion. No-one has knowledge.

of what may happen to the price of silver over the next year or two.

Oh, what *may* happen. In that case any chump can answer that. It may go up a lot or down a lot.

Any advice would be very much appreciated

If you have a known savings goal in a reasonably short time frame, nobody would recommend you save for that using speculative price-volatile commodities such as precious metals, barrels of oil, etc. Or, for that matter, in stock market investments such as shares and bonds. The amount of money needed to have even an extravagant £50k wedding party would quite easily fit into a few of the top high street banks' current accounts which pay 3%-5% a year, meeting your goal of "a small profit".