Silver as an investment

It has been regarded as a form of money and store of value for more than 4,000 years, although it lost its role as legal tender in developed countries when the use of the silver standard came to an end in 1935.

Some countries mint bullion and collector coins, however, such as the American Silver Eagle with nominal face values.

The Hunt brothers had borrowed heavily to finance their purchases, and as the price began to fall again, dropping over 50% in just four days, due to the sudden forced liquidation of margin positions, they became unable to meet their obligations, causing further panic in the precious metal markets.

There was such immense risk to the world economy that investors drove the prices up by buying defensive commodities (e.g. silver or gold).

When the short-term risks were believed to have subsided, many investors reallocated their assets back into yielding (dividend or interest) investments such as stocks or bonds.

During the first few months of 2011, Moody's and S&P both downgraded the outlook on US finances; this was a major shock to the financial world and resulted in silver's climb to $50.

On August 5, 2011, S&P issued the first ever downgrade in the federal government's credit rating, citing their April warnings, the difficulty of bridging the parties and that the resulting agreement fell well short of the hoped-for comprehensive 'grand bargain'.

[23] The credit downgrade and debt ceiling debacle contributed to the Dow Jones Industrial Average falling nearly 2,000 points in late July and August.

As it became clear that the "financial apocalypse" would be delayed by late summer, many investors dumped silver and commodities and moved back into U.S. equities.

The term "coin" typically refers to a metallic piece minted by a sovereign government and holds the status of legal tender within its country of origin.

Coins are distinguished by their official recognition and carry a minimum face value, which represents the denomination assigned to them.

Other countries, such as Australia, Canada, Mexico, Switzerland and the United Kingdom also minted junk silver coins in the past.

[citation needed] Unlike holding physical silver, the customer has a claim against the bank for a certain quantity of metal.

In November 2006, the National Commodity and Derivatives Exchange (NCDEX) in India introduced 5 kg silver futures.

Instead of personally selecting individual companies, some investors prefer spreading their risk by investing in precious metal mining mutual funds.

For example, in the European Union the trading of recognized gold coins and bullion products is VAT exempt, but no such allowance is given to silver.

Norwegian companies can legally deliver free of VAT to the rest of Europe within certain annual limits or can arrange for local pickup.