As gold price soars, investors turn to silver

With the international price of gold continuing to climb steadily, many Chinese investors are turning to silver. As with any investment decision, however, experts say there are advantages and risks involved.

Although the international gold price has surpassed 1,200 US dollars an ounce, stores selling gold jewelry are still doing a brisk business. However, the higher price of gold has led many investors to turn to silver.

China's first silver bars came onto the market last month. As with gold bars, they can be bought and sold at any time. Silver bars are considered a more suitable investment for common people because they are less expensive than gold, and price fluctuations are less severe. That lowers short-term risk.

A silver investor said, "I think there is great potential for appreciation, and it is much cheaper than gold. So I want to buy some silver jewelry now, and emphasize silver investment in the future."

A silver investor said, "I think prices of all precious metals will go up soon."

In the first 10 months of the year, the sales volume of silver was up by more than 200 percent, while the price rose 60 percent. Experts say there are four silver investment channels: silver bars, silver currency, floor trade products, as well as extended settlement products. They predict that prices of all products will climb.

Experts also remind potential investors that silver trends may not be same as gold, so analysis of gold products does not apply to the silver price. Gold is closely related to the US dollar exchange rate and the crude oil price, whereas silver is not.

Liu Shan'en, expert of Beijing Gold Economic Research Center, said, "More and more investors are choosing silver now, because it is comparatively cheap, meaning that investors do not need a great amount of capital. At the same time, the profit is good, maybe similar to gold. So investors can make the same profit with less capital."

Precious metals are becoming more and more popular. But experts remind buyers that any investment carries a risk, and urge caution.