What’s your focus, when it comes to silver prices – live or historical?

If you’re serious about investing in silver, here’s the best answer to that question: both.

The price of silver is continuing to creep upward. Gold prices are still on the rise, too. But what does that mean, exactly?

Should we all be rushing in to buy silver?

Realistically, “rushing” to do anything isn’t a great idea…unless we’re rushing to make a good choice about our Eternal security. You don’t need a financial investor to tell you to hurry up and make the choice to accept salvation.

But as for the earthly decisions, even our instincts will tell us it makes sense to get all the facts–or at least, as many as we can–before making investment decisions. And if you’re not an expert in finance and the stock market, be sure to talk to someone who is, before you invest your money.

Because regarding silver prices, live market values give you an idea of what silver’s doing at the moment.

Sort of.

Whatever the numbers may show you, the question to ask is, what do those numbers actually mean?

What are the factors that affect today’s market price?

There are many, and sometimes, they can be complex.

When comparing silver prices – live vs. historical – you’ll see that the rise in price is not new. Indeed, the price of silver has been rising for years (1). So, is that the main factor to consider when choosing whether or not to invest?

How about the fact that silver is cheaper than gold? Both are on the rise, but is silver a better deal?

Not necessarily.

First, take a look at the gold/silver ratio. This is a simple way to compare the price of gold to the price of silver.

In the U.S., the gold/silver ratio was set at 1:15 back in 1792. Setting this ratio meant that 1 troy ounce of gold could be used to purchase 15 troy ounces of silver (1).

As this ratio gets higher, that means silver is getting cheaper, when compared to gold. On the other hand, when the ratio is lower, that means silver is getting more expensive, when compared to gold.

Take a look at some historical silver prices, from the gold/silver ratio point of view (1):

Gold/Silver Ratios

1990 – 94.3

2000 – 56.4

2005 – 60.8

2009 – 66.3

2010 – 60.7

2011 (through May 2011) – 38.5

Based on the ratio, although silver still costs less than gold, it’s not necessarily remaining all that much  “cheaper” than gold.

Making the decision to invest requires us to look at silver prices – live, historical, and in comparison to the rest of the market. And even then, there are other factors to consider, too.