How to Buy Silver? (2024 Guide)
This article has been reviewed and updated for 2024.
If you have been wondering how to invest in silver, then we hope that the following guide will go some way to answering your questions. It can be confusing if you are wondering how to buy silver online, or just how to buy physical silver. The main thing is that you have decided to invest in silver and now just need to get started with the right kind of product!
Read on to find out what silver bullion is and ten different ways to invest in it.
Also read: Is buying silver a good investment?
What is Silver Bullion?
Silver bullion is the term used for investment-grade silver. It is generally found in the form of silver bars and silver coins. It must have a minimum purity of 999.95.
You will see that in our list of eight ways to invest in silver, very few of them give you direct access to silver bullion. When someone decides to invest in silver they very often do so because they not only wish to see some returns but also to experience the benefit that having silver bullion in your portfolio can bring. Here, we are referring to its ability to hold its value, to protect your portfolio from uncertainties and also to bring diversification to your financial strategy. Read more about why to invest in silver here.
To invest in an asset that does not give you direct access to silver is really only to invest in the price of silver and its future movements. When deciding how to invest in silver, always ask if it is silver you are buying or instead, is it an associated or derivative product.
Read more: What is silver Bullion?
1. Silver futures
If you just want to speculate on the price of silver rather than own it, then silver futures are the clear way to go. Silver futures are contracts that entitle you to buy silver at a pre-agreed price at a set future date.
Futures are risky and only for experienced investors and traders who are prepared to make large losses as well as gains. When you own silver futures then you do not own any physical silver. Generally, investors and traders use futures as speculative tools, to bet on the price of silver.
The majority of silver futures contracts are for cash settlement. In some cases you are able to take delivery of the silver however, this is rarely done and some would argue that’s not really in the spirit of the ‘game’.
Futures trade very closely to the silver spot price and so the premiums are extremely low. But the risks and rewards are high. Like gold futures, silver futures are popular because they offer high liquidity and you can use a lot of leverage. So, you can put up a small amount of capital relative to the size of the contract, but should the silver price move against you then you will be expected to shore up your position with more money. This is called a margin call and if you cannot put up the right amount of cash then your position will be closed and you can lose a lot of money.
Futures are effectively a betting tool. They are not an asset that will offer any kind of security to your portfolio, or any of the other benefits that holding physical silver will bring.
2. Silver Exchange Traded Funds
Exchange Traded Funds (ETFs) are often seen as the compromise between holding physical silver and silver futures. In truth, in the order of silver investment products ETFs would definitely sit closer to futures! ETFs are considered a bit easier to manage as you aren’t required to face the same margin requirements as you are with futures. However you still do not own the underlying silver or silver shares, you only own shares in the ETF.
ETFs that own silver
Many argue that the advantage of holding a silver ETF over unallocated or allocated physical silver is that you don’t have to worry about storage, insurance or theft. In truth, you hardly have to worry about these things when you choose to buy physical bullion directly from a reputable silver bullion dealer.
When you buy from a highly recommended dealer such as GoldCore we make our secure storage very accessible and affordable. You can choose from a number of safe jurisdictions. You also don’t need to worry about paying VAT, either. When silver bullion bars are kept in our Swiss storage facility VAT is not due.
When you come to sell a silver ETF such as iShares Silver Trust you must remember that you do not own any silver. You just own shares in a fund that may or may not have a claim to any silver.
ETFs that own silver miners
To own a silver mining ETF as an alternative to directly owning physical silver to us seems a bizarre choice. It would be like buying shares in a house in Spain but actually, you’re not sure if the house is even there and really you need somewhere to live in the UK, not Spain. Pointless.
People choose to invest in a sector ETF such as a silver miner ETF gives you diversified exposure to a range of silver mining companies, which reduces the need for you to do any analysis of the market and your risk is spread out across the companies whose shares are in the fund.
But, once again you have no right to any physical silver. Worse than an ETF that owns silver, the number of counterparties between you and even the chance of there being any silver are enormous.
People hold physical silver as part of their portfolio because there is very little counterparty risk and it has shown itself to be a hedge in times of uncertainty. With a silver miner ETF you are exposed on a number of levels to different counterparties and what you really own (a fund with shares in various companies) is not going to stand up to the number of economic and geopolitical shocks that physical silver otherwise would.
3. Digital Silver
Some online gold and silver bullion dealers offer the opportunity to invest in silver but with none of the benefits that come from owning the physical bullion. As stated above, one of the reasons to invest in the indispensable metal is the benefit gained when you have access to the tangible bar or coin. For many investors when they buy silver they look to ensure that they have more than just access to a digital representation of the silver. They would like to be able to take delivery. However in some cases, this is not an option and instead the silver holding is merely part of pooled or unsegregated holdings.
We believe that this approach works if you wish to partake in online trading of silver and only wish to consider a short-term holding. However if you wish to hold silver for the long-term then we suggest you look into our Unallocated Silver Perth Mint Certificate Program product.
4. Silver mining stocks
Silver mining stocks are another way to speculate on the price of silver. They are very liquid and some investors like to hold silver mining stocks because you are not only speculating on the silver price, but also the success of the company in whose shares you have bought.
Like any investment you must do your research first. Read about major and junior mining stocks, look at the management teams, read the feasibility studies and look at the prospectuses. There is a lot of research to be done and despite all the hard work you put in, you are still relying on counterparties to manage your investment for you.
Silver mining stocks are an exciting way to speculate on the success of a company and the silver price, but they are not there to future proof your portfolio or to act as a safe haven in times of inflation or other uncertainties.
5. Jewellery
All around the world people buy silver jewellery and silverware whether as an expression of love or maybe as a family heirloom but rarely as an investment.
Despite this, if you have googled ‘How to Invest in Silver’ you might have read some forums or articles that have pointed you in the direction of silver jewellery as a way to hold physical silver in your portfolio.
We hate to break it to you but as wonderful as we think silver necklaces or silver platters are, we would not recommend that you buy them for any other reason than because you like them. Relative to the amount of silver that they contain, silverware and jewellery are very expensive.
Silver jewellery and often silverware is alloyed to other metals. The silver content can be quite low. The high price of these items is often down to the skills that have gone into creating the necklace or punch bowl. Also consider that such items are very often created to be ‘a la mode’ - fashionable. Fashions come and go, which means the demand for fashionable items will also come and go, yet another factor that will affect the resale price.
In short, silver jewellery and silverware will contribute very little in terms of investment value to your portfolio. You would be far better off buying physical silver bullion given its low premium and liquid market.
6. CFDs and Spread betting
Like futures, contracts-for-difference (CFDs) and spread betting, are ways of using leverage to bet on the price movements of silver. You only need to put up a small amount of capital but this exposes you to significant financial risks, as well as rewards.
Using these products is not for the faint-hearted. You must be able to monitor not only the price of silver but also the various factors that can affect its price (industrial demand, economic factors such as interest rates, the prices of other metals). It is full on.
For both CFDs and spread-betting you can lose more than you initially invested. Situations change very quickly and you need to be able to react as such. This is completely different to holding tangible silver bars or coins. You cannot lose everything because you own the silver. It is yours. The price of the bar or coin in your vault might go up or down, but that hasn’t cost you any more money. The silver sits there, quietly holding its value and protecting your portfolio.
If you bet on the price of silver, you are just betting. There is no silver at the end of the contract.
7. Invest in silver bullion
For us, investing in physical silver coins and bars is the only way to get all the benefits silver can bring to a portfolio.
Silver bullion is investment-grade silver bars and coins. It must be of at least 99.95% purity, and sizes and weights vary with something to suit investors of every budget and investment strategy.
You must take time to research the various options when it comes to where to buy silver as there are a number of differences across providers. Reputation is really key, so be sure to look up customer reviews.
If you choose to use a reputable silver bullion dealer, such as GoldCore, when you invest in silver bullion, you will have access to our very secure yet accessible trading platform. This is a highly liquid and global marketplace. We are also delighted to be able to offer high-security, insured, specialised precious metals vaults in which to store your silver bullion.
Below we have highlighted some more information about silver bars and coins.
8. Investment-grade bars
Buying Silver bars are a great option for an investor. They come in standard sizes and weights. We only buy silver from LBMA-approved refineries. When you own silver that has been cast or minted in one of these refineries then you can be assured of the authenticity, standard and purity of the bar. Each bar comes with the refinery’s logo, name and a unique bar number.
At GoldCore we offer two sizes of silver bar:
100-ounce Bar: This silver bar contains 3.107kg of pure silver. They measure about 184 by 80mm by 20mm and are one of the most popular silver bars.
1,000-ounce Bar: A Good Delivery bar, this bar contains 31.07kg of silver and is 6 inches long, 2 inches wide and ¼ inch thick.
Also read: How to buy silver bars?
9. Investment-grade silver coins
Many investors prefer to buy silver coins as they offer more flexibility if you just want to realise some gains, without selling your entire chunk of silver. After all, it is impossible to cut a corner from a silver bar if you just want to sell 10% of your holdings!
Silver coins are (as you would expect) coin shaped in appearance, just like legal tender coins. Unlike legal tender, you must still pay VAT on your coins as you would silver bars.
As GoldCore we sell a range of popular silver coins from a selection of the most reputable mints, around the world.
These include:
- American Silver Eagle: 1oz 99.99%
- Canadian Silver Maple: 1oz 99.99%
- British Silver Britannia: 1oz 99.99%
- Austrian Silver Philharmonic: 1oz 99.99%
- Australian Silver Kangaroo: 1oz 99.99%
Also read: How to buy Silver Coins?
10. Perth Mint Certificate Program
The Perth Mint has authorised a small-number of bullion dealers for the Perth Mint Certificate Program (PMCP). We are the only Approved Dealer of the PMCP in the UK and the entire European Union. The PMCP allows investors precious metal storage options at the Perth Mint’s premises. The program is guaranteed by the Government of Western Australia.
We recognise that unallocated silver is not the preferred choice for everyone. However if you are considering it because of lower premiums or liquidity then we do believe this is the only way to hold unallocated silver. When you buy unallocated silver through the PMCP then you will receive a certificate with a unique number. It is issued by the Perth Mint and details the number of ounces you own and that it is stored on your behalf by the Mint. You have legal title to the silver stored in your account.
11. Numismatic and semi-numismatic coins
When someone refers to themselves as a coin collector, then they are a collector of numismatic and semi-numismatic coins. They are collectibles. A numismatic coin is a coin whose value or price is not based on its face value but instead with a focus on its date, condition, rarity value, connection to history, aesthetic attraction and mint mark of the coin.
A semi-numismatic will be based on a similar criteria but also take into account the bullion value.
A number of subjective factors can affect a coin’s value. For example, it’s historical connections or even just demand for that coin at the time. But there are some great advantages to owning semi-numismatic coins. As well as the usual benefits that come with holding bullion such as liquidity, divisibility, and portability, it can be argued that these coins price appreciation potential thanks to the value that comes with their rarity and historical connections.
Here at GoldCore we recognise the desire to own coins that are steeped in such history, especially the like of British Gold Sovereigns. As well as these we see some unusual and extremely high-quality British, American, European and other gold coins which are suitable for collectors and investors alike.
How to buy silver with GoldCore?
We hope we’ve answered your questions and are feeling more confident and knowledgeable about how to buy silver. We believe silver bullion kept in secure storage in a safe jurisdiction, is the best choice. However, if you are still unsure, schedule a free strategy call with us. We can give you more information and discuss your options with you.
Alternatively, contact us on:
Ireland +(01) 653 3426
Our experts are more than happy to help you to decide how to buy silver. For more information on silver bullion, read our post “What is Silver: All You Need to Know”
You may like reading our blog on: Should I buy gold or silver?
