Sterling Silver Vs. Investment Silver

Pure silver, also called 999 silver, is lustrous and tarnish-resistant, but too soft for jewelers and artists to work with. In order to make it more durable, it is often alloyed with a complementary metal. In use since the 14th century, sterling silver is an alloy that is 92.5 percent silver and 7.5 percent copper. The silver jewelry standard in much of the world, sterling silver is the material of choice for many silversmiths. Ornaments, jewelry and cookware made from the alloy will be marked with the word "sterling."

Like gold and other precious metals, silver is a popular choice for investors. Although including an intrinsically valuable, tangible object like silver is widely considered to be a strong portfolio hedge against the fluctuations of the stock market and currency values, silver is a commodity. Like all commodities, its price can swing wildly, and its worth is susceptible to political, economic and social factors. Although silver can be purchased on paper in mutual funds, futures and exchange-traded funds where the buyer never actually possesses the metal, physical silver investment comes in three forms: bullion bars, coins and medallions, or rounds.

Also called ingots, silver bullion bars are solid rectangles comprised of silver that is at least 99.5 percent pure. Most often containing a .999 percent purity, bullion is often referred to as "pure silver." Silver bars can be produced by private organizations and by government mints. They are attractive to investors because they are usually the least expensive to convert into cash and they are recognized internationally as exchangeable for currency.

Silver coins and medallions are both flat and disk shaped. Coins are produced by an authorized government mint and usually have a face value. Medallions, or rounds, are produced by private mints and will never be circulated as currency. Both are prized by investors because they are physically small and therefore relatively easy to store and transport. Although they are both relatively inexpensive to purchase, only coins are always readily convertible to cash. Medallions must come from a reputable refiner in order to be exchanged for currency.