Gold and Silver?

These days no matter where you live you've probably seen advertisements on the television, radio and even seen physical stores asking you to trade in your gold and silver for cash. Now more than ever this seems to be the case so even if you've never noticed this in the past you probably wondered why they seem so keen to do it now?

If you take a look at the current 'spot price' (the value per ounce of pure silver) right now and compare that with the last few years you'll soon realise why it's happening. The value of silver is way lower than it should be and it's been going up for a long time but still is nowhere near its real value. Although there are significant differences between gold and silver you can see that the price of gold has also gone up significantly over the last year. Both of these price rises are based on similar things and will continue for a long time to come.

Only a few months ago the price of silver was $20 an ounce, today it is $29 - that's an increase in price of almost 50% in a few months. This might sound normal for some high-tech stock but for something as long-standing and known as silver it is a massive change.

As well as the dollar getting weaker and weaker and the US government printing more and more money to cope with the current recession, there is a massive increase in the amount of silver required for use in industry, so even if there was no recession there would still be a draw towards the price of silver increasing.

Combine that with the fact that many silver reserves have run out and you get a situation where there are more promises to pay in the form of bank notes than there is actually value associated with them. This means that savvy investors are also moving into assets which have intrinsic value like gold and silver and this also makes the price go up.

There are many factors that affect these things but right now the biggest of them are pushing for the price of precious metals to increase and that's exactly what they're doing.