Two different camps perceive silver differently. One camp has considered silver bullion as an industrial metal for a very long time. Another camp of people believes silver bullion is primarily a monetary metal, like gold bullion. It is true silver is used for industrial purposes and jewelry. So is gold. Silver is a major component of film, and reclaiming processes were set up in factories as silver's price rose years ago. Silver played such a major role in film that fears were prevalent that the metal's price would plummet as the use of film declined during the digital age. Plummeting silver prices are not unprecedented. The record high price of silver bullion was $50.35 per ounce, reached in trading on the Comex on Jan. 18, 1980. By April 1980, the price of silver had dropped to about $10.80 at one point.

What drives the silver market? Many people believe silver's market price is predominantly based on supply and demand.

This price is really driven by a very sophisticated commodity trading world, rather than simply supply and demand. If you want to delve into what's involved, you'll run into things like short selling, lease rates (now in negative territory), ETFs or Exchange Traded Funds, bimetallic arbitrage (between silver and gold), and you'll see buyers quickly turn into sellers and vice versa.

This is more involved than the average person wants to learn about. But what has been the case over the years is that silver tends to follow on the heels of the gold price. So if you believe in the fundamentals of what drives gold, like inflation and a falling dollar value, you may want to consider investments in silver.

True, the storage costs for silver are much higher than for the same value of gold, unless you keep it buried in the back yard. Most people pay for the use of bank safe deposit boxes.

One popular way to purchase silver in the past was in 100-ounce bars. The most popular bars were manufactured by Engelhard. Today, all of these bars are a little more difficult to sell and may trade at small discounts.

One-ounce rectangular silver art bars and silver rounds were also very prevalent in the marketplace in years past and have been collected, but the market is extremely thin for these as collectibles and they normally trade just for their silver content.

Bulk circulated silver coins are still popular with investors, as they have been for generations. A $1,000 face value bag of 40 percent silver Kennedy half dollars, minted from 1965 through 1969, will contain about 295 ounces of silver. A $1,000 face value bag of 90 percent silver coins, lasted dated 1964, will contain about 715 ounces of silver.

The most popular way to hold small amounts of silver today is American Eagle 1-ounce .999 silver bullion coins produced and marketed by the U.S. Mint through a network of authorized purchasers.

COIN VALUES Market Analyst - 10/15/2007