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Evaluating the Risks Involved in Silver Investments

gold and silver coins representing diverse investments

Investing in precious metals like gold and silver is widely regarded as a safe investment in the face of inflation and other economic crises. But of course, no kind of investment comes without associated risks. If you’re looking to make secure silver storage investments, there are certain risks you should evaluate first.

1. Unpredictable Market Fluctuations

The value of silver is dependent upon many economic factors, with the leading ones being its scarcity and demand in the precious metals exchange market.

Silver more or less always remains in demand due to its use in various industries like electronics, automobile, and jewelry; but, its supply often fluctuates and remains scarce due to the high costs of mining. The increase or decrease in supply directly influences silver prices, which creates unpredictable market conditions for investors.

2. Storage Risk

Most often, investing in silver means buying silver coins or bars; these are physical assets which require a secure storage space. Since silver is lesser valued than gold, it also needs to be bought in a larger quantity to match the value of investment.

Some investors prefer to store their silver at home or any other personal space, and many of the top silver and gold investment companies provide their customers the facility of private vault storage at a cost; but the risk of loss, damage or theft remains in any case.

3. Potential Fraud Risks

Silver is less readily traded in the American precious metals market than gold due to its lower value and thus, is more susceptible to fraudulent exchanges.

Buying silver coins, either through physical or online stores, is becoming increasingly riskier because of the huge number of fraudsters. Thanks to advancing technology, it has become easier for counterfeit and imitation silver to circulate in the market.

The Federal Trade Commission (FTC) advises investors against making rushed investments to avoid scammers; while the Commodity Futures Trading Commission (CTFC) warns investors of signs to spot illegal scammers or fraudulent dealers.

4. Technological Risks

Although silver is a multipurpose metal used in a wide range of industries, the cost of mining it continues to be a looming threat to its popularity and supply.

As technology progresses, different materials or metals may prove to be less costly to mine than silver, leading to its replacement as a manufacturing material in industries like electronics or automobiles.

If industries that use silver for manufacturing purposes find better alternatives, the value of silver can depreciate, causing investors to lose claims.

How Can You Avoid The Risks?

To protect your investment against the controllable risks, make sure you’re only buying silver from the top silver investment companies in the American precious metals exchange market.

Orion Metal Exchange is among the top silver and gold investment companies and has been a PCGS (Professional Coin Grading Service) Authorized Dealer for over 50 years. We have an internal gold and silver IRA department, as well as a team of experts, who can help you ensure a secure silver investment.

Contact us to learn more and start investing.

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