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Are Silver Coins a Good Investment?

Investing in silver coins may be attractive, but there are certain important points we need to consider first. In this article we explore “Are silver coins a good investment?”

Size and investment options

Silver coins are available in a variety of sizes. Apart from the normal sizes up to an ounce, they are now available in larger versions of 10 ounces and 1 kg. There has been speculation in the market for a while that the prices of silver are likely to go up significantly. With the spot price currently hovering around £11 per ounce, there are great profits to be made if it rises threefold. The other reason that silver is attractive to investors is that it is 85 times cheaper than gold. Gold can be prohibitively expensive for retail investors. Silver offers access to the precious metals market at an unbelievable price point.

The industrial demand for silver

Silver has a huge industrial demand. It is widely used for the manufacture of electronics, computers, solar panels, and has a range of other industrial applications. Reducing supplies of the white metal has prompted investment experts to speculate about a possible hike in prices. If you are thinking of silver coins investment and taking a calculated risk on its price, you may have to wait for at least 3 to 5 years before you can get a reasonable return.

Insider's Guide to gold and silver

They can be a great investment if bought in the right way at the right time. Silver is significantly undervalued compared to historical levels, so a medium to long term holding is advised to maximise returns.

Are Silver Coins a Good Investment
Silver coins can be a great investment if the right coins are chosen

Need for liquidity and buying coins which can be resold

Your investment is only as good as its liquidity. If you cannot take advantage of the right price point in the market by selling easily and quickly, the investment is useless. Therefore, always buy silver coins with a mass appeal and avoid purchasing obscure and rare coins. Well-known coins enjoy a vibrant secondary market, which makes it much easier to sell when the time is right. 1-ounce silver coins like the silver Krugerrand is an ideal choice.

How about collectable coins?

You may be able to extract better value from your investment if you choose a collectable coin. The premiums on these coins usually rise very quickly and investing in them can be an excellent strategy to get quick returns. Likewise, a popular coin like the 1-ounce silver Britannia makes an excellent addition to your investment portfolio. It ticks all the boxes for divisibility, liquidity and collectability. So, it’s evident that investing in silver coins can be a great idea as long as you plan properly and buy the right coins which are likely to meet your investment goals.

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Understand purity levels

When choosing coins, purity is an important factor. Many silver coins are available with 95.8% purity. But, if you do your research well and choose a coin like the Canadian Silver Maple Leaf, you have a coin with 99.9% purity. There can be different strategies for choosing the right silver coins for your investment. Purity, divisibility, variety and value are important considerations.

Tax advantages and efficiencies

From a tax perspective, silver coins which are legal tender in the UK will automatically be CGT free.

Prior to the UK leaving the EU, Physical Gold were the only silver dealer in the UK who could provide VAT free silver. Post-Brexit this is no longer possible. Due to the following reasons though, we are able to sell silver coins and bars at similar “all in” prices to previous:

  1. Free delivery – we can now provide free delivery, previously this was chargeable
  2. Reduced product range – we now provide a reduced range of silver products. This means we have negotiated better prices for the products we supply, we pass this discount on to our customers!

The overall net result is that the price difference when you buy silver coins and bars the price difference even with paying VAT is negligible and certainly competitive with other UK dealers.

We also can now accept orders for mixed gold and silver purchases, whereas previously we could only process “silver only” orders to obtain VAT free silver.

Contacting Physical Gold for Advice

Please visit the Physical Gold website for more information on how to profit from your investment in silver coins. Speak to us today on 020 7060 9992, leave an instant message or complete our contact form. We look forward to being of service and support.

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How To Buy Gold Bars?

The joy of owning a physical gold bar is fantastic. Investing in a gold bar can create great value for your investment portfolio while adding liquidity to it.

Why are gold bars more cost-effective than coins?

Many investors prefer to invest in a bar since they are a bit cheaper. You may be wondering why gold bars are cheaper than gold coins (such as Sovereigns and Britannias). Well, the spot price of gold would be the same whether you buy a coin or a bar. However, the premium charged over and above the spot price is lower. The manufacturing cost involved in producing a gold bar is cheaper than making a coin. This is primarily because a gold bar is a rectangular block, and does not have an intricate design element.

The importance of purity

Of course, the first point to check when buying Insider's Guide to gold and silvera gold bar is its purity. Most bars have a purity of 99.9% and this information is engraved in the refiner stamp on the face of the bar. It’s also important to check the serial number. Another useful tip is to buy pre-loved bars. These are available from dealers at a reasonable discount. Buying one of these gets you the same quantity and purity of gold, but you reduce your purchase price.

Buy a variety of bars – sizes and dimensions

When buying gold bars, it’s better to purchase a variety of bars of different dimensions. The attribute of variety is very important in building a robust portfolio. It enhances the divisibility of your holdings. If you’re selling a 1 kg bar, you’ll get one chance to sell it and your gold is gone. On the other hand, owning a variety of bars gives you the flexibility and advantage of selling at different price points. Smaller bars (such as 100g and 1oz)  may be slightly more expensive, but your dealer is sure to give you discounts if you buy a large number of them. You may not be planning to liquidate your entire gold holding. In that case, you may only need to sell a couple to meet your short-term financial objectives.

Where is the best place to buy gold bars?

It’s important to do your research when selecting a reputed dealer. It’s best to buy gold bars from a specialist bullion dealer. Avoid buying privately as authenticity could be a problem. Buying gold bars from a dealer can either be carried out online or over the phone. For transactions over £10k, identification will be required. When buying smaller gold bars, credit and debit cards are generally accepted, while online banking can be used for larger purchases. Most gold brokers will deliver your gold bar to your home address and insure the transit.

Check if the dealer has a buyback policy on gold bars. If they don’t want to buy back what they’re selling you, something is wrong. Every reputed dealer will be registered with an authorised regulatory body like the BNTA. Checking customer feedback on the internet is also an important part of ascertaining whether the dealer has a good track record. Once you’ve got all these bases covered, you’re good to go ahead and purchase the right gold bars to strengthen your portfolio.

How to buy gold bars
Gold bars are an attractive investment due to lower production costs

The importance of tax efficiency

Tax efficiency is an important consideration when investing in any gold. We all know that bullion coins are legal tender in the UK. As a result, they are Capital Gains Tax (CGT) exempt. Likewise, they are also VAT exempt, as they are considered to be investment-grade gold. But, do the same rules apply to gold bars? Of course, they are VAT exempt too. But, CGT would be chargeable on any profits accumulated above the £ 12,000 mark.

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Physical Gold – how to contact us

We are easy to contact, so why delay contact Physical Gold Limited through your preferred method. Contact us via our Contact Form, by calling 020 7060 9992 or by leaving an instant message. We look forward to working with you.

 

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Gold Investment vs Bitcoin?

Both investments operate outside of the established fiat money system and both work on the basis of capital appreciation rather than paying an income. Apart from that, they pose very different risk profiles. Gold investment has existed for thousands of years and is generally used to protect wealth from inflation and market downturns.

An overview of the gold market

Apart from the intrinsic value that gold commands, the yellow metal is also recognised as a globally tradable asset. Bullion coins and bars can be converted into cash in any country.

Wealth preservation

As an inflation shield, gold protects your wealth when inflation rises. Historically, gold has always tracked the rate of inflation, providing stability to investors. But, more importantly, gold is a stable asset that investors turn to during turmoil in the capital markets. If we study the price charts of gold over the last 20 years, we find that gold has always peaked at times of global economic downturn. During these times, investors pull their money out of stocks, bonds and currencies and invest in gold. The Bitcoin market, on the other hand, cannot provide investors with a safe haven. It is volatile by nature and is a risky investment.

A bleak economic outlook in the UK?

The current economic scenario is gloomy. PHYS01_Animated_Gif_2_MPUMedia reports claim that the UK could possibly be looking at another great recession. The economic pundits believe that the country’s risk of recession is at its highest level since 2007. Much of this is attributed to the uncertainty created by Brexit. In a recent news report, the BBC claimed that the London housing market has fallen by 4.4% as of May 2019. The housing market is considered to be one of the important barometers of the health of our country’s economy. We could witness more recession and that’s likely to drive investors back to gold again.

Gold Investment vs Bitcoin
The volatility of Bitcoins is not for the faint hearted

Bitcoin investment – aspects to consider

Bitcoin, on the other hand, is far less established and understood. While it provides the chance of huge gains, it also threatens to lose you everything. Unlike gold, Bitcoins are prone to counterparty risks. When you invest in any cryptocurrency, you’re dependent on the performance of the exchange. In a bizarre incident, the CEO of a Canadian crypto-currency firm recently passed away. With his death, all the critical passwords were lost, leaving investors high and dry. A recent article published by the UK magazine Wired claimed that 18 out of 40 Bitcoin exchanges went out of business and investors lost their money.

Volatility

Bitcoins also suffer from extreme volatility. At its peak, the price of one Bitcoin was equivalent to around US$ 19,000 in 2017, crashing down to a low of around US$ 4000 by December 2018. Now, it has once again risen to approximately US$ 12,000 in July 2019. So, it’s a rollercoaster ride that’s not for the fainthearted.

Universal acceptance?

Another big risk factor with Bitcoin investments is the lack of acceptance by the monetary systems of several countries. Many countries have banned Bitcoin exchanges from operating. Cryptocurrencies have also come under the scanner for its use in financing terrorism and illegal activities, including money laundering.

Insider's Guide to gold and silver

While Bitcoins use tamperproof blockchain technology, the exchanges themselves have been affected by several instances of hacking and cyber-attacks. Since it is not a regulated currency, no assurance or protection scheme is available from the government. Once the money is lost, it’s gone forever.

Conclusion

From the above, it’s amply clear that Bitcoins do not offer investors the safety and stability of physical gold. Perhaps the only attribute shared by the two vehicles of investments is that both are not adversely impacted by inflation. Gold is the safer choice and likely to remain so in the future.

Contacting Physical Gold for Advice

We are always here, available to speak and for messaging for advice and the supply of gold bars and coins. Call us on 020 7060 9992, complete our contact form, or simply leave an instant message.

 

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