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Your questions answered

Here you will find answers to some of the most commonly asked questions about silver investments so that you can make informed decisions and get the most out of your investments.

If you are new to investing in silver or would like more information on how to go about investing, our team of experts is also on hand to help. Just give us a call.

What factors affect the price of silver? 

The silver price is affected by many factors, including supply and demand, market sentiment, inflation, government policy and currency fluctuations.  

Silver has been revered as a safe-haven investment for centuries, whether as jewellery or used as currency across many civilisations. This status means around a quarter of silver demand is driven by investment in bars and coins while another quarter in jewellery and silverware. For the rest, almost half of silver demand is driven by industrial uses including electronics.  

All these demand drivers are linked to the economic health of the global economy, with industrial and jewellery demand dropping when the economic environment is constrained, while investment demand often rises as people look to safe-haven assets during recessionary periods.  

Silver is subject to far more speculation that gold, which can create more volatility in the market (the ‘Reddit’ surge of 2021 is a case in point). But like gold, silver has in the past acted as an inflation hedge, and is also subject to the vagaries of monetary policy like fiscal tightening or loosening. The myriad impacts on silver make for more volatility, but its low entry level pricing and safe-haven reputation make it a popular precious metal choice for investors looking for diversity in their portfolio.  

Has the value of silver increased or decreased over time? 

A hundred-year chart of the silver price shows substantial fluctuations over the century, with a peak in 1980, contemporary lows in the early part of the 21st century, and a relatively steady rise since then with inflections in 2011 and 2020. That said, the volatility of the 100-year silver chart belies the widely accepted view of silver as a precious metal with long term value and safe-haven status.  

It’s important to recognise that while gold is subject to its own vagaries of supply and demand, silver is far more volatile, swinging wider and faster than gold. This means short-term investors can and do use it speculatively to ‘play the market’ which exacerbates the volatility.  

The answer to the question has silver increased or decreased over time entirely depends on where you choose your baseline year, but over centuries, like gold, silver has been a long-term store of wealth. 

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When is the best time to buy silver?  

Like all commodities, silver’s value fluctuates up and down in response to market conditions. The ideal time to buy would be when prices are low, then sell when they are high, but it is very difficult to predict all market moves. 

Unless you are specifically investing in silver speculatively to ride a hoped-for rise in prices and make a short-term profit, buying physical silver should be a choice to invest in a physical asset that sits outside the banking system, and has long-term value as a safe-haven asset. 

Delaying or forgoing an investment when prices are rising (or seem high in comparison to decades-old figures), in the hope that they will fall, leaves investors exposed to the market conditions that are driving the price higher. 

When should you buy silver? When you are ready to diversify your investment portfolio.  

Should I buy silver coins or bars?  

Silver coins and bars serve two different purposes in an investment portfolio.

Coins come in many different denominations and can be bought and quickly liquidated in smaller quantities as required (allowing for easy entry-level precious metal investment). They are popular and prolific so they are easily bought and sold. Depending on individual circumstances, silver coins minted by the Royal Mint (that are considered legal tender) can be capital gains tax free.

Meanwhile, bars are often bought by investors looking for larger silver investments. Silver bars are the most cost-efficient form of silver investment because they have a lower production cost per gram than silver coins. Silver bars are subject to capital gains tax.

While all silver (bars and coins) bought and stored in the UK is subject to VAT, it is possible to purchase and store physical silver bars outside the EU which do not attract VAT.

 How do I buy physical silver?

Buying physical silver is as easy as buying physical gold. Choose a reputable precious metals dealer (seek out recommendations or outlets with strong customer feedback). Use online resources or speak to a consultant to understand what options are available (coins, bars etc). Then conclude the purchase directly with the dealer and have your purchase delivered or stored. Contact The Pure Gold Company to speak to our experts for more information on buying physical silver. 

Should I buy silver or gold?

Like gold, silver has been revered for centuries. Its malleability means it has long been used in jewellery and decorative items, while its inherent value as a precious metal means it has been used as currency across many civilisations. Ultimately it is not as rare or as valuable as gold, but it is a very important asset nonetheless and over the last several decades has proved itself more than useful in other disciplines, including industry and medicine.  

Gold’s higher value and relatively stable pricing mean it is more often used for safety and security, having kept its value for thousands of years. Silver’s lower price and smaller market on the other hand means it is much more volatile, and more inclined towards upside speculation. This highlights the difference in investment objectives for gold and silver buyers. Gold tends to be bought for long term value retention, and silver for short term profit.  

The lower price also make silver an easier ‘currency’ to hold. Although you can’t spend it in a shop like cash, the lower value of each denomination makes it easier to afford initially and to liquidate smaller amounts. 

Ultimately investors looking for a diversified portfolio may choose to hold both gold and silver to ensure they can benefit from the long-term stability of the gold price and the potential for short-term silver profit.  

Discover all there is to know about buying gold for investment

Our free Investor Guide will reveal:

  • How to invest in gold
  • Timing & pricing considerations
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The Pure Gold Company Investor Guide

Discover all there is to know about buying gold for investment

Our free Investor Guide will reveal:

  • How to invest in gold
  • Timing & pricing considerations
  • Our buy back guarantee
The Pure Gold Company Investor Guide
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Have more questions?

If you are new to investing in silver or would like more information on how to go about investing, our team of experts is also on hand to help. Just book a consultation below or give us a call on 0207 060 6902