Bullion Basics: Navigating The Silver Investment Market

Silver is a popular precious metal to invest in, and there are several ways to buy it. You can buy physical silver in the form of coins, bullion, or bars, either online or from local dealers and pawn shops. Silver bullion bars are typically made of ..999+ pure silver and can weigh anywhere from 1 troy ounce to 1000 troy ounces. Coins are also a popular option, with certain coins, such as the American Silver Eagle, being backed by a central government and having legal tender status.

If you don't want to own physical silver, you can invest in silver through exchange-traded funds (ETFs), silver futures, or by buying stocks in silver mining companies. ETFs that own physical silver, such as iShares Silver Trust (SLV) and Aberdeen Standard Physical Silver Shares ETF (SIVR), offer a lower-risk way to invest in silver. Silver futures allow you to speculate on the price of silver without owning the physical metal, but they are riskier and more suitable for advanced traders. Buying stocks in silver mining companies can be a way to benefit from both rising silver prices and increased production by the company.

Silver bullion coins

One of the most popular silver bullion coins is the American Silver Eagle, issued by the United States Mint. It is legal tender in the United States and has a face value of $1. Other popular options include the Royal Canadian Mint Silver Coins, the Perth Mint Australian Silver Coins, and the Mexican Silver Libertad Coins. These coins are known for their high purity levels and attractive designs.

When buying silver bullion coins, it is important to consider the premium over the spot price, which refers to the additional cost charged above the melt value of the silver in the coin. Coins may warrant a higher premium due to their collectible value and government backing. It is also essential to purchase from reputable dealers and mints to ensure the authenticity and quality of the silver bullion coins.

In addition to the investment potential, silver bullion coins also have aesthetic appeal, with intricate designs that collectors appreciate. They are a good option for those who want to own physical silver and diversify their precious metal portfolio.

Silver bars

There are two types of silver bars: minted and poured. Minted silver bars are made similarly to silver coins and rounds. "Blanks" are cut from extruded silver bar stock, then struck with large dies in a hydraulic press. Poured silver bars use molds of graphite or steel and are more labour-intensive, resulting in higher premiums over the silver spot price.

When buying silver bars, it is recommended to choose a reputable dealer with plenty of positive customer ratings, a feedback policy, and strong educational resources. It is also important to ensure that the silver bar has proper stamping, including content or weight, purity, refinery, and serial number.

• PAMP Suisse
• Royal Canadian Mint
• Engelhard
• Johnson Matthey
• Sunshine Minting
• Mason Mint
• Trident

Silver rounds

There are a wide variety of silver round designs available, including historic US coin designs such as the Buffalo Nickel, the Morgan Silver Dollar, and the Walking Liberty Half Dollar. Silver rounds also come in different weights, including fractional silver rounds of as little as 1/10 oz (3.1 grams) of 0.999 pure silver, and larger 5 oz silver rounds.

Some of the most popular silver round designs include the Silver Buffalo Round, the Aztec Calendar Silver Round, the American Eagle Replica Round, and the SilverTowne Prospector Stackable Silver Round.

Silver futures

Another benefit of silver futures is that they can be used to hedge against economic downturns and inflation. During uncertain economic times, investors often turn to precious metals like silver as a safe haven investment. Silver futures provide a way to gain exposure to the silver market without the storage and protection costs associated with physical silver.

However, investing in silver futures also comes with certain risks. Futures contracts are complex and may not be suitable for beginner investors. They typically require a large account balance to get started and are only offered by certain brokers. Additionally, the high leverage in futures contracts can magnify losses if the market moves against the investor.

Overall, silver futures can be a useful tool for investors looking to speculate on the price of silver or hedge against economic uncertainty. However, it is important to carefully consider the risks and ensure that one has the appropriate knowledge and resources before investing in silver futures.

Silver mining stocks

• First Majestic Silver (AG)
• Pan American Silver (PAAS)
• Wheaton Precious Metals (WPM)
• Hecla Mining (HL)
• Endeavour Silver (EDR)
• SilverCrest Metals (SIL)
• Gatos Silver (GATO)
• GoGold Resources (GGD)
• Discovery Silver (DSV)
• Avino Silver & Gold Mines (ASM)

By owning a miner, you can benefit in two ways. First, if the price of silver rises, the company’s earnings should rise along with it. In fact, silver miners’ profits will rise faster than the price of silver, assuming all else is equal. Second, the miner can raise production over time, also increasing its profits. That’s an extra way to win with silver, over and above just betting on the price itself.

However, investing in an individual mining company comes with risks. It’s important to do extensive analysis on the company to ensure it is a high-quality business that can succeed. Many miners are risky ventures, and some may not have even started mining yet. Plus, because their profits depend on the volatile price of silver, mining stocks can be volatile, too.

An alternative to investing in individual silver mining stocks is to invest in an ETF that owns silver miners. This gives you diversified exposure to miners and lowers the risk of owning one or two individual mining stocks. Some examples of these ETFs include:

• Global X Silver Miners ETF (SIL)
• IShares MSCI Global Silver Miners ETF (SLVP)
• ETFMG Prime Junior Silver Miners ETF (SILJ)

Frequently asked questions