Is buying silver bullion worth it?

vaporate

Title says it all.

I'm a newbie and I'm just wondering?

1 Troy ounce bars to start with if I go ahead.

Purpose: 'Just' to hold physical bars. Hobby. Long term only.

Interested in ppl's opinion.

Or stick with gold?

MacsReturns

"Worth it" is a value judgment, so each to his own

If it's 'just for a hobby' then why not? Though I'd prefer 1 Oz coins as they're prettier.

However, if your idea of 'worth it' implies 'will I make any money', then that's a more difficult one, as no-one knows where the market's going to go. Bear in mind you pay pay VAT on buying silver, which with gold you don't. For gold I also prefer coins (no CGT, though the price would have to go up a LOT for that to worry me ) So to see a real gain on silver the value has to go up by at least 17.5% plus any premium you paid.

It's often recommended to keep some of your wealth in the form of precious metals - generally as a hedge against inflation, and with physical in-your-hand stuff then you know it's not going to go bankrupt on you, like a bank (cash), a company (shares) or a government (gilts) might conceivablly do.

With gold, you can keep £10,000 in your pocket and no-one would know... with silver it would show.

So as with anything financial, it all depends on 'why' as to whether it's the right thing or not. :beer:

shaun_from_Africa

For gold I also prefer coins (no CGT, though the price would have to go up a LOT for that to worry me

The only gold coins exempt from CGT are Sovereigns and Britannias. (UK legal tender coins)
If you buy any others such as Krugerrands, maples etc you would still have to pay CGT if your profit takes you above the current limit.

vaporate

MacsReturns wrote: »

"Worth it" is a value judgment, so each to his own

If it's 'just for a hobby' then why not? Though I'd prefer 1 Oz coins as they're prettier.

However, if your idea of 'worth it' implies 'will I make any money', then that's a more difficult one, as no-one knows where the market's going to go. Bear in mind you pay pay VAT on buying silver, which with gold you don't. For gold I also prefer coins (no CGT, though the price would have to go up a LOT for that to worry me ) So to see a real gain on silver the value has to go up by at least 17.5% plus any premium you paid.

It's often recommended to keep some of your wealth in the form of precious metals - generally as a hedge against inflation, and with physical in-your-hand stuff then you know it's not going to go bankrupt on you, like a bank (cash), a company (shares) or a government (gilts) might conceivablly do.

With gold, you can keep £10,000 in your pocket and no-one would know... with silver it would show.

So as with anything financial, it all depends on 'why' as to whether it's the right thing or not. :beer:

Many thanks :beer:

MacsReturns

shaun_from_Africa wrote: »

The only gold coins exempt from CGT are Sovereigns and Britannias. (UK legal tender coins)
If you buy any others such as Krugerrands, maples etc you would still have to pay CGT if your profit takes you above the current limit.

Yes, indeed, thanks for the reminder - whenever I talk about 'gold coins' I always really mean 'sovereigns' (can't afford Britannias )

crazygaijin

There are lots of different opinions on the silver VAT thing.

One opinion is that yes you pay VAT when you buy new silver bullion but the final price you paid is the value of of it if you sold it the same day.

When you do come to sell it you seem to be able to get about the price of someone else buying new silver and paying VAT.

Look on ebay you will see most of the silver sold is the same sort of price as buying new and paying VAT.

So if you lock in todays price, when you come to sell you can get the price similar to buying new silver with VAT. After Jan it will be 20%.

So its not really true that you have to wait until its gone up 17.5% before you make a profit.

Even if that were true you wouldnt have to wait long at the rate silver is shooting up.

There is no reason why this bull market wont continue until the blow off top like the last time this cycle happened.

sabretoothtigger

Buy something practical like sterling silver spoons. I saw some going for about 40% premium over spot, looking at a silver dollar coin its 32% over spot not including delivery so why not

Or you could just buy a silver etf for 0% over spot


Otherwise I'd just stick to the gold coins for the cgt benefit when holding it long term physically


http://www.kitcosilver.com/

Bullfighter

For me, Silver has the potential to outperform Gold.

As I understand it, Silver is the basis of a very heavy carry trade, and many are suggesting that the major banks are suppressing the price (through naked short selling) to allow this profitable arbitrage to continue.

If this carry trade unwinds (and they can unwind violently) and a short squeeze occurs, then Silver could go parabolic.

Of course, we could just maintain the current status quo. However if nothing changes or the global economy miraculously recovers back to 2007 levels then you may see Silver still appreciate rapidly since it is also an industrial metal and is used in a lot of advanced electronics.

That said, a new primary mine could hit the motherlode, and the price could drop through the floor and end up so cheap that they replace the new steel 5p pieces with .999 silver versions. :rotfl:

crazygaijin

Bullfighter wrote: »

That said, a new primary mine could hit the motherlode, and the price could drop through the floor and end up so cheap that they replace the new steel 5p pieces with .999 silver versions. :rotfl:

Very unlikely all the easy to get to silver has been used up.

Nearly all the silver mines have run out been depleted.

Now about 70% of all silver every year comes as a byproduct from other mines.

MikeJ74

Bullfighter wrote: »

For me, Silver has the potential to outperform Gold.

As I understand it, Silver is the basis of a very heavy carry trade, and many are suggesting that the major banks are suppressing the price (through naked short selling) to allow this profitable arbitrage to continue.

If this carry trade unwinds (and they can unwind violently) and a short squeeze occurs, then Silver could go parabolic.

Looks like you are going to be right.

Have you seen the silver price lately?

snowqueen555

I've come the realise the majority of silver is locked away in all those spoons, plates jewelery... the actual amount of silver in bullion form is fairly low in comparison. When silver gets more recognition, people will trade all this junk in, and the availability will shoot up... surely this will have a lowering price? We can already see that a good proportion of silver that enters the market comes from scrap, and this is only going to go up year by year.