The Dos and Don’ts of Buying Silver

Silver has had a good run this year, breaking through the$30 per ounce and still rising. A lot of investors are now looking at silver as a viable precious metal to put their money in. However like any investment, you need to keep abreast of the trends and have some knowledge about the market. There are different forms of silver in the marketplace. It is important to know how to assess purity so you have an idea of the price you should expect to pay. You should also take time to find the right dealer who specialises in silver bullion. Here are some do’s and dont’s of investing in silver.


Understand the form of silver you want to buy


There are different forms of silver that are being sold in the market, the most common ones are bullion bars and bullion coins. Silver bars come in rectangular form and will have the silver content or quality struck on them. The purest bullion bar is .999 which means the bar contains 99.9% pure silver. Some silver bars have 99.5% or less.. The purer the bullion bar the better. There are some mints that produce bullion bars with some kind of artwork on them. These are usually released to commemorate some event. These are collectables and usually produced in limited numbers. Expect them to cost more than the spot price of silver.


Familiarise yourself with sizes


Silver bars come in different sizes and weights. The unit of measurement for the weight of silver is a troy ounce is equal to 31.103 grams. Bars are signed in increments of 1 troy ounce, 5 troy ounces, 10 troy ounces up to a kilo. Smaller bars might be easy to carry around and store, they are also more liquid. However, they tend to cost more than bigger bars because they cost more to manufacture. It might be better to buy bigger silver bars and keep them in a storage facility. To protect the bar, d not remove the shell case they come in. The case will usually contain information about the bar and it also serves as proof of authenticity.


Get the best price when buying your silver bar


Take some time to research the different mints that sell silver bullion. Reputable dealers sell bars with the manufacturer’s information imprinted. These tend to be more expensive depending on the brand. Generic silver bars can be just as good as the high branded ones, you can simply have your silver assayed to verify the quality. For these you can expect to pay slightly less when you go to a trusted dealer.

Research silver coins before buying them


If you chose to invest in coins make sure you understand the coin market. Silver coins are available as bullion and circulated coins. Bullion coins are priced according to their weight and purity, but circulated coins are priced higher for than that. They are often rare and have a numismatic value. For instance, if you have a silver coin from the time Britain ruled Australia or an American coin that dates back to the Civil wars, the price of these coins will based not on its silver content but on the collect ability.


Ensure that you do not pay tax on the silver bullion you buy.


Investment grade silver coins (.999 purity) are exempt from GST. Any silver, gold or bar with a numismatic value is subject to GST regardless of its purity. Australians can avoid tax by buying directly from non-GST registered dealers or those infrequent one-off traders that can be found on eBay or Silver Stackers.

Don’t get fixated on the newness of the bullion


A brand-new silver bar or coin may shine brighter, but at the end of the day, the same amount of silver that is in a .999 newly minted bar is equal to the .999 silver bought second hand. You need to check and verify the authenticity of the silver bullion and buy your silver from a reputable dealer.


Don’t buy silver on online marketplaces


Online shopping is convenient and cheaper. People tend to trust online marketplace like eBay. You can find incredible deals on silver online, but you have to remember that you are buying something you cannot feel or touch. Buying online means you have to trust that the seller is selling you exactly what they promise. There are plenty of reputable online silver dealers, you only need to look properly.


Don’t be suckered by cheap prices


Online prices may seem like you are buying silver for a song, but some dealers make up for their low pricing by charging high shipping amounts. Always research shipping prices before entering into a deal with anyone.