There are several long, interesting answers to this question depending on which financial advisor you talk to. But there are a few fundamental reasons to invest in silver bullion that everyone seems to agree on:
The answer to this question applies to other places outside the UK too. Silver bullion can be bought from bullion traders in stores and depots in cities around the world. However, there is almost no advantage to buying your silver bullion in person when there are so many quality online bullion dealers to choose from. Once you’ve found them, check that they have a Trustpilot or Feefo rating, a recognisable address, and other trustworthy credentials.
There are countless shops and depots that will buy your silver bullion from you at the current silver price. For convenience’s sake, it’s worth making a list of three or four different silver traders nearby. Visit them, ask how much they’ll offer for your silver bullion and compare their offers. There are also numerous online traders that will buy your silver bullion from you – just make sure to research them before you deal with them.
As we mentioned in the answer directly above, you can store silver bullion coins either in a home safe or in a safe deposit box. How you make this decision will depend on how many silver bullion coins you have and how much free space you have in your home. It’s also worth considering whether or not your home insurance or other specialist insurance company will cover your collection of silver bullion coins. If not, it may be best to use a safe deposit box or an LBMA-approved refinery.
The quick answer is yes. The longer answer explains why silver bullion coins are such a good investment. Silver sovereign coins, as official currency, will not be subject to capital gains tax in the UK, so they are better than silver bars or gold bars in this regard. Silver coins are also a highly liquid, flexible investment as they are easy to store, transport and sell as there is always a high demand for them.
Silver bullion coins offer some advantages that silver bars do not, but they also come with additional production overheads that bars do not, so it’s best to invest in a mixture of silver bullion coins and bars.
The answer to this isn’t obvious or universal as individual people’s situations differ significantly. The two main options are silver coins and silver bars. Silver bars are easier to store if you’re buying a lot of bullion as they are designed to slot on top of one another and fit right into the corners of a vault. Silver coins take up more space but sovereign coins (minted by countries) count as official currency and will not incur a capital gains tax in the UK when you eventually sell them.
However, coins also come with higher premiums per item, as it costs more to make an intricate coin than it does to make a simplistic bar. Weigh up whether the space and economy of silver bars is attractive to you, or if avoiding capital gains tax with silver coins is more advantageous.
You can store silver bullion coins either in a home safe or in a safe deposit box. How you make this decision will depend on how many silver bullion coins you have. As silver bullion isn’t nearly as valuable in relation to its weight, you may need to store a considerable amount of it if you’ve made a sizable financial investment. This just means that an investment of several thousand pounds in silver will result in a lot of silver bars or coins, so you will need ample space either in a home safe or an assay office.
Private home safes need to be of a certain standard for insurance companies to insure your bullion, so make sure the safe you buy fits these standards. However, as you may have to store a lot of silver bullion, it probably makes more sense to pay for storage. Investors who do not intend to store their bullion at home should store it either at a bank, within a safe deposit box, or at a refinery approved by the LBMA or another certified organisation.
When you see ‘.999 silver’ it means that it is 99.9% pure silver. It’s impossible to attain 100% purity, but 99.9 is the standard purity level for all investment-grade silver bullion. You can usually see the purity stamped onto a silver bar or along the circumference of a silver bullion coin. If you cannot see ‘.999 fine’ or something similar somewhere on a piece of silver bullion, make sure the product is authentic before you purchase it.
Often, silver bullion is bought by bullion vendors, as many have a buy and sell aspect to their business. As with buying silver bullion from online retailers, it’s important to vet any potential seller by doing a little research on them. If you have a few companies in mind, then you can react to a sudden price increase very quickly, selling your bullion whilst it’s still worth more than you originally bought it for.
There are different sizes and shapes of silver bullion bars, but they all have a purity of 99.9%. A silver bullion bar has been designed for easy transportation and storage, allowing many to be slotted together on top of one another. If you’d like to browse a range of different silver bullion bars, check out our silver bars collection.
Once again, this answer could differ depending on who’s asking. Generally speaking, however, new investors are advised to stick with sovereign silver coins as their purity is guaranteed and they provide investors with a capital gains tax loophole in the UK. However, if you’re happy to invest more time and effort into researching silver coins, you’ll quickly discover the rich world of numismatic coins.
Numismatic coins can be gold, silver, platinum, etc. and they have additional value as collector’s items based on their rarity, mint, aesthetics, and a whole range of other variables. It’s a complicated market to get into and it will take up a lot of your time, but if you have the time, numismatic coins have the potential to make you a lot of money.
The worth of silver bullion changes over time as the world silver markets rise and fall in accordance with the supply of silver mined and refined each year and the demand made by the numerous industries that use it to make their products. As silver is used to make so many different products (such as cameras, solar PV panels, mirrors, hospital equipment), there is a huge demand for it.
So, when there is a shortage the demand stays the same, so the value rises significantly. The value of silver changes dramatically over time, but this is often viewed as a positive by investors as it allows them to buy it when it’s cheap and sell it when its value skyrockets.
As with most other commodities, it’s best to buy silver when its price is relatively low. If you would like to buy silver bullion but you are unsure of where the current price fits into the greater scheme of the silver market, then look at the historic rise and fall of silver prices on one of the many statistics websites available.
It’s also just a good idea to buy silver bullion when you can definitely afford it, as although it is a very liquid investment, it will tie up your capital, which is fine until you need it.
Interestingly, the majority of the world’s silver bullion is owned by private bullion investors. Over 1,500,000,000 ounces of silver bullion has been bought by private investors since the crash in 2008. Government bodies and private companies also hoard large amounts of silver, but ordinary private investors own the lion’s share.
If you’re worried about damaging your silver bullion bars, you can pay a professional to clean them for you. However, there are several proven methods that you may like to try if you’re feeling brave. The best option, however, is to buy specialist silver cleaner and follow the instructions on the packet. Beware of online advice to use lemon juice and other acids as you could end up damaging your silver bullion significantly.
If you’d like to keep your silver bullion from tarnishing in the first place, you need to reduce the amount of hydrogen sulphide wherever you store it. You can do this by putting in charcoal that you can buy in pet shops (for fish tanks) as it absorbs hydrogen sulphide. Silica gel helps prevent condensation around the silver bullion, and condensation can lead to corrosion, mildew, and rust. It’s also a good idea to make sure that your silver isn’t exposed to anything acidic, including anything coating your hands.
The answer to this question is entirely dependent on your funds and the range of your overall investment portfolio. As silver is reasonably cheap in relation to its weight, you can buy a hefty amount with only a few thousand pounds. However, a silver bullion investment works best when hedged against a gold bullion investment and as part of a wider investment portfolio.
It is usually recommended that your investment portfolio consist of between 10 and 15% bullion, with twice as much gold as silver. However, if you get a particularly low price on silver, then it’s definitely worth buying a lot more in one go.
As of 2013 figures, there is an estimated 777,275 tonnes of silver currently in the world. However, as we use around 60% of the annual silver yield in various industrial processes, nowhere near all of it is turned into investment-grade silver bullion. A rough estimate of the amount of silver bullion back in 2015 came to around 2.3 billion ounces, most of which is owned by private investors.
However, these figures don’t account for the collective amount of silver coins and bars that haven’t been declared in some way, so the figure is probably significantly higher. How much higher, however, is anyone’s guess.
The answer to this is the converse of the answer above. Sell silver bullion when the price of silver rises. Obviously, the nature of this rise will differ and you have to decide whether you’d like to sell when the price rises a little or wait until it skyrockets. If you sell earlier, there is always the opportunity to buy more silver once the prices drop, then sell that bullion when the price skyrockets.
This can be a difficult decision, not because your investment is at risk, but because you have to decide when you want to cash in your investment and if you’re willing to let an opportunity pass you by in favour of a better one coming along in the near future.