It can be worthwhile for investors to buy silver and thus expand their portfolio. This is because the precious metal is an excellent investment with stable value.
With a solid annual production volume of about 27,000 tons, silver seems to be sufficiently available at first glance. In contrast to gold, of which only about 3,000 tons are extracted from the earth per year, the demand for silver is many times higher!
This is because silver is used in industry for the production of solar cells, screens in smartphones, televisions or laptops. We also often find it in the catalytic converters of our vehicles or medical devices. In addition, the demand for silver jewelery is enormous – it corresponds to about a third of the annual production.
Buying silver can therefore be an interesting alternative to other precious metals for many investors who aim to preserve value. But numerous differences can make it difficult to get started: Where can I buy silver, what forms are there, how and where can I store silver? We have the answers!
Buy silver as an investment?
There are many good reasons to buy silver. The precious metal is in enormous demand in the manufacturing industry and for jewelry. Silver production is expected to decline dramatically in the coming decades and come to a halt by mid-century. Some estimates even suggest that less than 20 years remain before all deposits are exhausted. At the same time, there are no signs that demand is falling – quite the opposite!
Significant price increases are therefore expected by many experts. Buying silver can therefore not only be worthwhile for securing one’s own assets; it can also be used as a speculative object. It is not affected by the inflation of our money due to its highly limited quantity and is very likely to increase in value.
In addition, silver offers the advantage of an “easy entry”: Due to the small market and the lower prices, silver coins or silver bars can already be purchased for smaller amounts. This way, a silver investment can be built up step-by-step, while buying gold requires higher expenses. Silver purchases can very well be executed at fixed intervals, for example, every month. Investors then benefit from cost-average effects and achieve the best long-term result for their portfolio.
As with other precious metals, a distinction must be made between the material value and a collector’s value of coins and co. when buying silver. For example, the prices for the gold coins “1626 – A New World Map” and “1812 – A New World Map” are twice their actual material value! This price difference comes from the high demand for these limited edition collectibles. Such highly limited runs offer considerable potential, but also entail initially higher costs. The same principle applies to coins made of silver, platinum and palladium.
The different forms of silver
The silver content of jewelry, silver coins and other products is expressed in thousandths. For investors, it is recommended to buy fineness 999, the purest form of silver. Here are 999 parts of 1,000 silver. Smaller numbers indicate that the silver content is lower and other metals have been added instead.
Widely known is also the purity 925, aka the “sterling silver”. It is often used in jewelry production, but it can also be used as an investment. Below this value, however, private investors should rather not buy silver, as this makes it more difficult to sell it later.
Pure silver, on the other hand, can be sold at the respective market price without any problems. It is accepted by specialty retailers as well as some banks and many jewelers.
Much of the world’s silver is “built into” household appliances, cutlery or jewelry. Silver recycling is a lucrative business due to continued demand and declining supplies.
Recycled silver forms a separate category of precious metal, distinguishing between single/first-time recycling and multiple recycling. However, since this form is primarily used in industrial companies, private investors hardly come into contact with it.
Silver bars or silver coins
Those who want to buy silver, on the other hand, have to choose between two main forms: Silver bars or silver coins. The former are particularly suitable for larger investments and allow easy storage. Such bars are available in gradations from 100 grams to one kilogram.
Coins, on the other hand, are available for smaller amounts and are ideal for slower wealth accumulation. They also offer interesting embossing and are much nicer to look at than the uniform bars. Value increases for rare issues are also possible here.
However, such collectibles differ from the coins, which are purchased purely as an investment. They usually have a higher cost than the Asset Coins because they are produced in smaller numbers .
Numerous mintings known from gold coins are also available for silver. Among the most famous are the gold coins from Australia. For example, the “Winged Victory”, “Dragon and Phoenix” or “Kangaroo at Sunset” are world-renowned gold coins that are also available in silver. The Lunar-1 series, which includes coins such as the tiger and the ox, is also issued in silver.
What is the composition of the price of silver?
Anyone who wants to buy silver, of course, first takes a look at the price. This has increased significantly in recent years – despite some temporary slumps. With global inventories running low, this trend is very likely to continue.
The silver price is formed from this strong demand and the respective supply. The exact amount is determined by Bullion Market Association members based on these parameters each day.
At the same time, silver is highly sought after both as a material for jewelry and for industry. Trading as an asset, on the other hand, accounts for only a comparatively small proportion. However, investors should not be deterred by this: Due to its lower value, silver, for example, can be an excellent complement to a gold investment. Since both metals offer interesting opportunities for price growth, gold and silver are by no means an “either or” decision !
Silver coins were used as a means of payment in many nations until the 20th century and are therefore often found in attics, estates and among other mementos and souvenirs. While such finds of gold coins often bring handsome amounts, the collector value of such silver coins is usually limited.
As a rule, a sale rarely fetches more than the material value of the silver. Nevertheless, in the case of interesting finds, it may be advisable to have an expert appraise the coins. There could be valuable pieces among them!
Buying silver: What do you need to consider?
Those who plan to buy silver should pay attention to some important points. First of all, it makes sense to purchase bars and coins only from specialist dealers like rarecoin. These should be members of the Professional Association of German Coin Dealers. A close examination of the seriousness, for example on the basis of customer ratings and certificates, is also recommended.
Purchasing is often also possible via banks; however, this route is predominantly associated with higher costs and a smaller selection for buyers. In recent years, specialist dealers have largely taken over the market for silver as an investment, as they score points with a broad and significantly more favorable range.
If larger quantities of silver are to be purchased, the space requirement must also be considered . After all, silver bars can quickly add up to several kilograms and considerable volume. If such large amounts are invested in precious metals, buying gold might make more sense instead. Due to its much higher prices, an investment takes up much less space.
For storing silver bullion, the most secure place possible, such as a high-quality safe, is ideal. Coins, on the other hand, are often displayed in display cases or other showcases. Here, a personal trade-off must be made between the enjoyment of the valuable pieces and the security risk.
The traditional storage of precious metals in bank safe deposit boxes has become increasingly out of fashion in recent years. The reason is the sharp rise in fees for this service, which in the past was often still free of charge. If you still want to store your silver at a financial institution, it makes sense to ask about the costs beforehand and to take them into account.
If silver coins are purchased, the motifs should look good for as long as possible – scratches and other damage is something every collector wants to avoid. Ideally, therefore, the coins should not even be removed from their packaging. High-quality coin capsules can make a useful upgrade for your own coins.
Special case tax: If you want to buy silver, you should buy it outside the EU. Many dealers offer this option, because it allows you to reduce the tax burden on the purchase. Instead of the regular 19 percent value-added tax due, this means that only the reduced seven percent is charged.
If the silver is resold within one year of acquisition, a final withholding tax is also levied. However, it does not apply at all if at least twelve months have passed. This strengthens the position as a long-term value investment: Anyone who wants to buy silver should ideally hold the precious metal for a longer period of time.
Buying silver is therefore perfect for individuals who want to secure their assets for the long term. As with gold , rising inflation can also be avoided here, because the precious metals have stable values and are only available to a limited extent. Attractive gold and silver coins should therefore not be missing in any well-diversified portfolio!