When should you buy Silver Bullion?  

Stack of Bank Silver Bars extreme closeup

Goods purchased for thousands of years have exchanged silver coins, and with this long history comes investor belief in silver’s stability. Investors buy silver in physical form because silver bullion has proved to be a reliable and stable investment and a hedge against inflation. Silver can be a volatile precious metal, but it is attractive because its value often increases when other metals show losses. Historically when many metal values decrease, silver and gold prices increase. Silver and gold investments are essential additions to an investment portfolio. 

The Covid-19 pandemic due to government lockdowns brought with it many challenges and turmoil in almost all markets worldwide. There were fluctuations in supply, demand, investment, and prices of most commodities. In early 2020 as the impact of the government lockdowns took effect, the silver price fell sharply, as did silver’s value compared with gold. Towards the end of 2020, the silver price rallied and outpaced gold. The annual average silver price by the end of 2020 increased 27%, which was the highest percentage increase since 2013. 

Mines throughout the world were closed because of lockdown restrictions, impacting the supply of precious metals. The year brought significant job losses and declines in economic activity.  The result was that a large surplus of silver exchange-traded products (ETFs) was up for grabs, and investors found faith in silver bullion. The growth of physical silver bullion bars and coins grew by 8% in 2020. Forecasters predict that silver will continue to show growth in 2021 in both the physical retail sectors and in investments. 

Investment experts recommend that investors buy silver bullion because it is a physical asset and has real value. Like all commodities, silver bullion will be affected by market prices and changes, but the effect is likely to be much less than the silver-market stocks and shares. The   May 2021 gold to silver ratio shows that gold bullion is 68 times more expensive than silver bullion. Gold bullion is often too expensive for the average investor, and that is what makes silver bullion attractive as an investment. 

In almost every city, there are local gold dealers who sell silver and gold bullion. Do some reading first to know more about buying bullion and which bullion you wish to buy. Bullion weight is in troy ounces, and one troy ounce is about 31 grams. Dealers will refer to a spot price, which is the daily price for a physical ounce of a particular metal. Know that you are responsible for storing precious metal bullion. Read some reviews of reputable dealers in your area.

There are four types of bullion:

  • Bullion bars are refined small bars of silver metal imprinted with a serial number. 
  • Rounds are privately made bullion, and their value is in melting the metal. They are not a form of legal tender and have no date or denomination. 
  • Coins are government property. They are legal tender and have both a face value and a melt value. 
  • Collectable coins from various mints are not a viable bullion investment.  

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