Silver is not unlike other forms of precious metal in the fact that it presents an investment opportunity to buyers. For over 4,000 years silver has been used as a form of currency and carries great weight in transactions. However since the introduction of paper currency it has lost its role as the primary form of legal tender. In 2009, a precedent was set when the demand for silver rocketed. Since then millions of silver bullion coins have been purchased as an investment.
Buying silver bullion can be a tricky process due to its basis as a precious commodity. It is worth learning about the world of silver bullion as it can be a profitable investment if purchased at the right price. When buying silver bullion from eBay use this guide to help gain understanding of why it is considered such a wise investment.
Silver Bullion Pricing
Silver is considered one of the world’s core commodities, which makes it notoriously volatile in the price department. Speculation, supply and demand are the driving force behind the price of silver bullion. At times there can be wide fluctuations in value which may scare some people off, but it is important not to under value silver bullion’s investment potential.
· Silver has a close relationship with gold due to their value and consistent demand.
· Smart investors will use the gold/silver ratio as a way to gauge possible investments. It is a number that is analysed by traders and buyers. The gold/silver ratio actually dates back thousands of years.
· During the Roman Empire it was set at 12:1 but in 1792 the United States government moved it to 15:1. This meant that one-ounce of gold was worth fifteen ounces of silver.
· Since then the set figure has gone through various changes and reached an average of 47:1 during the 20th century.
The gold/silver ratio is something to pay attention to at time of purchase in order to ensure that buyers are getting the best value for money.
Silver Bullion Bars
The traditional form of buying silver bullion is in a bar shape. Countries with economic independence (like Liechtenstein and Switzerland) allow silver bars to be purchased over the counter at banks. They are flat and rectangular shaped so it makes them the perfect form of silver bullion for storage, whether that is at home or in a safe. There are several sizes of silver bullion bars available:
· 1000 Ounce – These bars weigh approximately 85 pounds and can range in weight (10% in each direction). Considered the upper echelon of silver bullion bars in both value and appearance. However they are only available upon special request.
· 100 Ounce – Weighing in at a little over 8 pounds they are the most popular bar amongst retail investors. There are a variety of brands to purchase from, with Engelhard and Johnson Matthey standing amongst the most respected.
· Odd Weight – These bars have weight that doesn’t fall into the official recognised standards. They cost less as it takes work to calculate their value. These bars are considered a gamble but can be a wise investment under the right circumstances.
Bars are the traditional form of silver bullion. Their storage versatility means that they will appeal to many. When looking for the best price for silver bullion bars, be sure to check eBay’s live auction listings.
Silver Coins and Rounds
Even though silver bullion coins offer an alternative investment opportunity they carry more weight as a collectible item. Becoming a coin collector allows buyers to see the world of silver bullion in a different light. Prior to public release, coins are minted as either fine silver or junk silver, with the latter containing only small amounts of silver. This makes junk silver more suitable for collectors. Popular forms of silver bullion coins include:
· American Eagle – The official coin of the United States and arguably the most prestigious silver bullion coin available. It is often purchased in mass by collectors and is the most recognisable coin on the market.
· Canadian Maple Leaf – With a 5 dollar face value this silver bullion coin from Canada ranks amongst the most expensive in production. Issued by the Royal Canadian Mint, they are often purchased in bulk due to the silver content of the coin.
· Britannia – Originally issued by the Royal Mint of the United Kingdom back in 1997. It has a face value of 2 pounds and is altered in design annually. Has furthered the trend of featuring royal monarchs on currency.
· Chinese Panda – Considered a beautiful coin by both collectors and investors alike. The design is altered annually with the most common versions of this coin weighing just 1 ounce.
Silver bullion coins carry more aesthetic appeal than financial value, even though the design attracts attention, the silver content does not. A cross between bars and coins was developed in an attempt to get the best of both worlds. They are known as silver bullion rounds and contain one ounce of silver per coin but are not classed as legal tender. In some instances buyers can order rounds that have a custom design.
· There are new ways for buyers to acquire silver bullion being constantly developed. They are made to make acquiring precious metals even easier for those without the storage capabilities. The most prominent way is to become an owner of a silver certificate.
· This single sheet of paper allows investors to buy silver bullion without having to transfer large quantities of the product. However the process has stirred up a fair share of controversy, the United States issued silver certificates for the following amounts in 1968.
· People invested in such expecting a secure investment, but the US government has since written off such certificates. They’ve also stated that they can no longer be redeemed for physical silver or any form of legal tender.
· This caused outrage at the time and has forced world governments to change the way they see silver certificates. Australia and the Perth Mint Certificate Program are the first of many to acquire government guarantees on silver certificates. This makes them a far safer investment and other world governments are expected to follow suit.
Silver Bullion Taxation
Buying silver bullion has a great potential for profit, but buyers must take taxation into account during the initial transaction. The European Union has made gold exempt from VAT but silver still isn’t.
Norway has gone against such rulings but for the rest, VAT is standard. The following are the VAT percentage rates for silver bullion in Europe.
· Sweden – 25%
· Finland – 23%
· Netherlands – 21%
· United Kingdom – 20%
· Austria – 20%
· Germany – 19%
· Russia – 18%
· Switzerland – 7.6%
New silver bullion is subject to VAT across Europe, which to some degree lessens its investment potential. However second hand silver bullion bypasses these regulations, meaning that eBay has become a great resource in the industry. The world’s leading online auction site has developed a stellar reputation for dealing in precious metals and silver bullion is no exception.
How to Buy Silver Bullion on eBay
Silver bullion has established itself as a favourite amongst both investors and collectors. Their versatility offers great appeal and those looking to buy need look no further as to reasons why they should invest.
· In order to start browsing what is currently up for sale select collectables and antiques.
· From there click coins, bullion/bars and then silver bullion. This will display all live auctions and allow shoppers to openly browse.
Silver bullion dealers and general jewelers have taken to the eBay shops format to sell their goods. In order to find an eBay shop that carries stock of interest, select the eBay shops link at the bottom of the page and start exploring.
Completing a Transaction
· Once shoppers have located a piece of silver bullion that they wish to purchase they’ll need to do one of the following.
o Place a Bid
o Make a Best Offer
o Buy it Now
· When a buyer successfully wins an auction they will be required to complete the checkout process. Doing this through PayPal will mean that the transaction is covered by PayPal’s buyer protection program.. Silver bullion can sell for large amounts of money so it is important to make sure you are protected should problems arise with an order.
The general public has been asking questions about the investment value of silver bullion for years. Its profitability is now evident and it is no longer an elitist investment opportunity.
There are a large variety of options for those looking to obtain silver bullion no matter if you are a general buyer, investor or collector. Before entering such a temperamental market shoppers should familiarise themselves with the industry before using this guide as a point of reference.
eBay have capitalised on the popularity of silver bullion by creating a shopping environment for such that is unlike any other. It does not matter whether you are investing £10 or £10,000; the world’s top auction site has something to suit the needs of everyone.