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Silver Price Per Ounce - $500 In The Future? Calculating the Price of SilverThe first step to determining the value of a piece of silver is to determine the purity of the silver. In order to use the silver spot price, it must be what is considered sterling silver. Sterling silver is any piece of silver that is 92.5% pure silver or better. If a piece of silver is not this level of purity it must be melted down and reforged until it is of this purity.The next step is to find a scale that is very accurate and is calibrated to measure Troy ounces. If a scale can not be found that measures Troy ounces, a formula can be used to convert ounces to Troy ounces. There are 1.097 ounces in a Troy ounce. So if a piece of silver weighs two ounces, that would get divided by 1.097 to determine the number of Troy ounces. In this case, it would weigh 1.82 Troy ounces. Next, take the weight of the object and multiply it by its purity. So a 92.5% pure silver object that weighs 1.82 ounces would give you 1.82 multiplied by .925 which gives 1.68. Finally, take the number you have calculated and multiply it by the spot value of silver. The spot value will vary from moment to moment, so this will only give a general idea of the value of the piece of silver. Someone seeking to sell their silver could either go to a dealer and receive a portion of that value or attempt to sell it on the open market at that price. There are other factors that will increase the value of a piece of silver, such as the artistic value. This method only determines the raw value of a piece of silver. It does not account for the age of the piece or the artistic merit of the piece. An ancient Roman coin or silver necklace will be worth far more than the raw value of the silver contained in the necklace. The next question is about spot value. What determines the spot value? The spot value is essentially a version of the stock market for precious metals. If more people are ordering silver than selling, the price of silver rises. If more people are selling silver than buying, the price of silver drops. This continues until an equilibrium of buyers and sellers is found. Once this equilibrium is found, the spot price is set until another fluctuation occurs between buyers and sellers. The spot value of silver takes into account not only the price at which buyers are buying and sellers are selling. There are other worldwide factors as well. Unlike the stock market, the silver market involves a tangible asset. Many governments across the world back their currency with silver, though many like the United States back it with gold. So when these governments experience high inflation or economic crises with the value of their money, it can cause the price of silver to rise or drop with those crises. Determining the value of a piece of silver may seem complicated at first, but by using the simple methods discussed it can easily be determined. Far more difficult is deciding when to sell the silver. Selling too early or too late could result in a loss of a potential profit. |
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At the time of this article, the price of silver is hovering around the 42 dollar mark, so you can be forgiven for feeling a little suprised if you hear price predictions of triple digit silver in the next few years. How could such a stratospheric price be reached in such a short time I hear you cry? Well silver was $50 dollars an ounce back in 1980, how many things do you know of today that are cheaper than in the early 80s? To the right is an informative video from David Morgan editor of the Morgan report, offering his silver price target. And below are some price predictions from some well know financial pundits on where they think silver bullion could go in the long term. Of course these are just predictions, no one knows exactly as the price of silver can go down as well as up, however when you see some of the figures bandied about for the 47th element of the periodic table, they are eye openers to say the least! $500 per ounce - Max Keiser $500 per ounce - Jason Hommel $300 per ounce - Jim Dines $400 per ounce - James Turk $1500 per ounce - Mike Maloney |
By Buysilvercoins.org.uk Friday, September 9, 2011 - Site map - Privacy policy |