Are American Silver Eagle Coins a Good Investment Now?

Like other precious metals, silver is often used as anday the gold/silver ratio was 1:67. In other words, one
investment. Although no longer considered to be legaltroy ounce of gold would buy 67 ounces of silver.
tender in the US, silver has been regarded as a storeSilver has been appreciating rather dramatically since
of value and a form of currency throughout the world2005. To put things into perspective, the yearly
for more than 4,000 years.cumulative average price of silver in 2000 was $4.95.
If you compare the price of silver to the price of goldIn 2005 the yearly average cumulative price rose to
you would see that silver is considerably more volatile.$7.31. Throughout 2009 the average cumulative price
That's because there are fluctuations in the way silverof silver was $14.67.
is used. There can be large fluctuations between storeIt appears that silver is rising in price very dramatically.
of value and industrial uses that affect its valuation.Perhaps it's because people are concerned with the
And, because silver has lower market liquidity than goldeconomy. Since the global recession began in 2008
its volatility also is greater.investors have been increasing their demand for
Silver still often tracks the price of gold because of theprecious metals. That's because when inflation
intrinsic value of the metal. However, the gold/silverincreases precious metals have historically increased in
ratio can vary by quite a bit. The lower the ratio thevalue.
more expensive silver is when you compare it to gold.One of the most popular ways to invest in silver is to
In 1792 the United States fixed the gold/silver ratio bybuy silver coins. One example is the American Silver
law at 1:15. This meant that you could buy 15 troyEagle bullion coin. The American Silver Eagle is the
ounces of silver with one troy ounce of gold. Duringofficial silver bullion coin of the US. It is only struck in
the 20th century the ratio was 1:47. In other words, onone troy ounce sizes and is guaranteed to contain one
average, one troy ounce of gold would buy 47 ouncestroy ounce of 99.9% pure silver.
of silver.Theses coins sell for a very small premium over the
On September 22, 2010 gold hit a new high. At thespot price of silver. Because of that American Silver
close of the market one troy ounce of gold was sellingEagle coins have become one of the most popular
for $1,291.20. At the close of the market the same day,ways many people use to invest in silver.
one troy ounce of silver was selling for $21.30. On that