How To Buy Pure Silver
Regardless of the type of silver bar you purchase, you can rest assured that the refinery producing it uses .999 or .9999 pure silver content. Most silver bars, though not all, come with an assay card that authenticates the individual product and verifies its weight, purity, and content.
how to buy pure silver
All these factors have precious metal experts like Giancarlo Camerana, a strategic advisor at QORE Switzerland feeling optimistic about the performance of silver in the coming decade. What it comes down to, he says, is "a combination of bullish factors: increased demand from both the industrial sector and financial investors as they worry of the ongoing currency debasement and the possible dollar devaluation."
Bullion in its various forms is generally available from precious metals dealers. Be sure to look for a well-established one: JM Bullion, APMEX, and SD Bullion are among the most reputable. Many banks also sell silver bullion.
Instead of relying on a single stock, you can also invest in an exchange-traded fund (ETF) or mutual fund that bundles together multiple silver-related assets. Some contain shares of silver company stocks, while others invest in the metal itself or in futures contracts.
Among the most complex of the silver-centric investment options are exchange-traded notes (ETNs) and exchange-traded commodities (ETCs). They track an underlying asset (in this case the price of silver) like the funds, but the major difference is that ETNs and ETCs are actually debt instruments.
What form of silver to invest in depends on your own desire for convenience and appreciation, and your risk tolerance. Owning silver bullion is the most direct, purest play. But owning silver-based securities is more economical and offers a chance at appreciation.
While it certainly looks like a promising moment for silver, with its industrial uses predicted to expand in the next decade, there are no guarantees. Silver is vulnerable to recession in ways that gold is not. If the tech industry begins to lag, silver prices will fall, which will hit you in your pocketbook whether you're invested in the physical metal, a silver streaming company stock, or anything in between.
The U.S. Mint does not sell bullion coins directly to the public. Learn more about silver bullion coins or locate a bullion coin dealer. Prices are based on the market price of silver, which fluctuates daily.
Keep in mind that the value of your jewelry in silver does not determine its overall worth. The price of a sterling silver piece of jewelry is much more than its cost of silver. It also reflects the artistry, uniqueness, gemstones, and age of the piece.
Silver is sometimes referred to as the "poor man's gold." As precious metals, both silver and gold can rise in price if investors want a safe haven during times of economic uncertainty, and both can hold their value better than some other assets during times of inflation.
But in another sense, silver could be considered the "rich man's copper" because silver is much more widely used as an industrial metal than gold. This can help silver as an inflation hedge in a way not seen in the gold market because rising prices often accompany economic growth and an increasing demand for goods that use silver.
"Silver is often considered as 'second gold' and thus an inflation hedge," says Roberta Caselli, commodities research analyst at Global X ETFs. "However, there are two critical differences between the two precious metals: silver's additional industrial usage and their relative market sizes."
In addition to its use in bullion and coins, silver is one of the most common metals used in jewelry. And it has a wide range of industrial applications for solar panels, electronics and electric vehicles. In 2021, industrial silver fabrication rose more than 9% to more than 508 million ounces, according to the latest World Silver Survey produced by Metals Focus for The Silver Institute.
In addition to having a much bigger role as an industrial metal than gold, there is another key difference between the two metals that investors should keep in mind: "The gold market is enormous; the silver market, however, is much smaller and tends to be more volatile," Caselli says.
When adjusted for inflation, the price of silver has risen roughly 40% since February 1915. This is good for investors who want an inflation hedge and are planning to keep the investment for a long time.
But in shorter time increments, silver, like many commodities, can be quite volatile. For example, silver bought in 1915 had lost about half of its inflation-adjusted value by 2001. The price of silver spiked to about $64 per ounce in 2011 over concerns about the Federal Reserve's quantitative easing program and geopolitical instability in Europe following the global financial crisis. But by 2020, the price of silver had dropped below $12 during the pandemic. It later shot up to about $30 in early 2021 as expectations of a global economic recovery took hold.
Recently, silver prices have been under pressure as the Fed has raised interest rates. Rising interest rates tarnish silver's appeal as an investment because the metal doesn't pay interest like Treasurys do.
"The most recent U.S. inflation data showed the pace of consumer price increases eased, and the silver price has declined," says Sam Boughedda, equities trader and lead stock market news writer at AskTraders.com.
But with an outlook for more industrial demand, especially from solar farms, silver is catching up with gold's reputation as an inflation hedge, says Collin Plume, CEO of Noble Gold Investments, a firm specializing in precious metals-based individual retirement accounts, or IRAs, and home delivery.
Physical metal. One popular way to invest in silver is to invest in the physical metal. Investors can buy 99.9% pure silver bars ranging in weight from 1 ounce to 100 ounces or bullion coins such as the 1-ounce American Eagles the U.S. Mint produces.
Investors can also buy so-called junk silver coins. Prior to 1965, all dimes, quarters and half-dollars issued by the U.S. Mint contained large quantities of silver. While many of the coins have no collectible appeal, they maintain value tied to their silver content.
"The advantage of physical ownership is that its value closely tracks the price movements of the broader silver market," Caselli says. "However, one downside is that dealers can charge premiums to buy and sell silver, which can dramatically reduce returns. In addition, there can be costs of storage, such as buying a safe or renting a safe-deposit box."
Silver futures. Investors can also buy silver futures, exchange-traded contracts where the buyer agrees to purchase a standardized quantity of silver at a predetermined price on a future delivery date.
Futures contracts are a popular way for investors to speculate in the silver market or hedge their portfolios. The contracts provide direct exposure to physical silver without the hassle of delivery or storage because they can be easily sold at any time prior to expiration.
"Paper trading provides investors with exposure to silver without needing to physically hold the metal, potentially improving liquidity and reducing the cost of ownership," Caselli says. "Unlike the bullion market, futures markets can also allow investors to use leverage."
Silver mining stocks. Investors can also buy shares of silver mining stocks. Some of the largest, most-popular silver mining stocks include Pan American Silver Corp. (ticker: PAAS), SSR Mining Inc. (SSRM) and Hecla Mining Co. (HL).
"Silver miners have traditionally outperformed bullion in bullish markets due to how these companies use their operating leverage to increase profits, which might lead to a boost in share prices," Caselli says. "Unlike investing directly in silver, miners can expand production as profit margins grow."
Silver ETFs invest in a diversified basket of silver-related assets, such as silver company stocks, physical silver bullion or silver futures contracts. For example, iShares Silver Trust (SLV) invests in physical silver, Global X Silver Miners ETF (SIL) invests in silver stocks and Invesco DB Precious Metals Fund (DBP) invests in silver and gold futures contracts.
Silver ETNs. Exchange-traded notes, or ETNs, are debt instruments that operate like a hybrid between a stock and a bond, potentially tempering investor risk. Credit Suisse X-Links Silver Shares Covered Call ETN (SLVO) is a silver ETN that tracks the price of silver and pays a monthly distribution to investors.
Silver streaming stocks. Investors can also buy shares of silver streaming or royalty companies. These companies don't mine silver directly. Instead, they finance a mining project and receive a portion of its profits. Popular silver streaming stocks include Wheaton Precious Metals Corp. (WPM) and First Majestic Silver Corp. (AG).
Silver IRAs. Another way to invest in silver is through a silver IRA. "A silver individual retirement account allows you to invest in physical silver and serves as a good hedge against inflation by having a tangible asset in your portfolio," Plume says.
If you want to try to take advantage of silver as a shorter-term investment vehicle, you'll want to pay attention to several factors. One of them is the gold-silver ratio, which is the amount of silver that can purchase 1 ounce of gold.
"Over the last 30 years, this ratio has averaged 65," Caselli says. "Currently, the ratio is near 85, possibly indicating that silver is undervalued relative to gold. Looking at historical data, when the ratio tops 80, it signals that silver is relatively inexpensive relative to gold, which is a bullish signal for silver."
David Morgan, a precious metals analyst and publisher of The Morgan Report financial newsletter, forecasts that silver will move past $30 an ounce this year as inflation rebounds and the Fed increases interest rates more than expected.
"History has shown us that spot silver prices rise when inflation soars," Morgan says. "There's a very good chance that inflation will remain sticky and could even rebound in the months ahead, driving up spot prices for silver and gold." 041b061a72