Will Silver Coins Go Up in Value?

Spotting an investment opportunity in precious metals can be lucrative if you buy early. Silver is currently very low-cost compared to gold so is seen as a bargain, providing more likelihood of future gains. The current gold-silver price ratio is 85:1. It’s interesting to note that this ratio was 47:1 some years ago. In other words, the spot price of silver has fallen significantly over the years. Of course, many investors believe that there is a downside risk of investing in silver. The present price of silver is around £12 per ounce. So, is there a risk involved in buying silver coins?

A case for the appreciation of silver prices

Silver is in great demand all over the world. As the most conductive of all metals, silver is the preferred use in technological goods, so analysts predict demand to continue rising. Silver continues to remain the preferred metal for conductivity in photovoltaic cells, which is an integral part of solar panels. As the world moves toward sustainable energy solutions, the production of solar panels is likely to keep rising. Silver is also used in all electronic products like mobile phones, laptops and tablets. As our world becomes increasingly connected through technology, the demand for silver will rise.

Will Silver Coins Go Up in Value?
Silver coins can be a great investment over the long term

Rise in prices due to falling supplies

Electric cars are soon becoming the obvious choice for land transportation. With petroleum and diesel passenger vehicles expected to be phased out from Europe between 2030 to 2040, electric cars will occupy the lion’s share of the market. Silver is a critical component for e-mobility and the overall demand is expected to shoot up due to the above factors. On the other hand, there has been a significant drop in the production of silver from the world’s largest producing countries like Peru, Mexico and China. So, on the basis of supply and demand, we can reasonably expect prices to go up eventually.


How can silver coins deliver value?

First of all, silver coins provide divisibility to any precious metal portfolio. Many investors prefer to purchase silver bars. However, when selling back into the secondary market, bars (such as a 1 kilo silver bar) give you only one chance to sell. Coin investors, on the other hand, benefit from holding a variety of denominations. They can sell small parts of their silver holding as and when the price is right.

Silver coins (such as the silver Britannia) also provide a tax-efficient avenue for investment. Many silver coins are considered to be legal tender in the UK since they have a face value. Investing in these coins can provide an attractive CGT exemption.

Silver coins can deliver value over the long term

The value of silver coins can be volatile. They can go up and down in the short term. Over the long term as a precious metals with limited supply and increasing demand, they are likely to rise in value. Premiums on collectable silver coins can rise quicker than the market price of silver due to interest from both collectors and investors.

So, we can surmise that the downside risk involved in buying silver coins is minimal. Coins, in particular, can deliver good returns over a period of time while maintaining tax efficiency for your portfolio.

Contact Physical Gold to buy silver coins

The investment team at Physical Gold are always helpful in guiding buyers to make the right choices when it comes to silver coins. Contact the team on (020) 7060 9992 and you can benefit from advice, as well as guidance in buying the right silver coins that can provide great value.


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Gold Investment Coins vs Bars?

Gold has remained a popular asset class over the years. Due to its inherent stability and value it provides, the yellow metal has found preference amongst investors who want to hedge their risks. The move towards gold is particularly prevalent during times of economic turmoil. In 2011, we saw gold reaching its highest peak ever. The spot price shot up above $ 1900 per ounce. Of course, this was also the peak of a global recession that started in 2008.

Interestingly, we are heading into, yet another recession and gold prices are already in excess of $1500 per ounce. So, let’s look at a common question that gets asked by most investors who are interested in building a gold portfolio. “Should I buy coins or bars?”

Key considerations when choosing coins or bars

For most, buying coins is better than bars for gold investment. Coins provide more flexibility to sell small parts of the holding and can fetch higher prices when you wish to sell. In the same way that larger bars are cheaper per gram than small ones, buying gold coins in bulk will also achieve price discounts. UK investors also benefit from legal tender coins being tax-exempt, whereas gold bars are not. Owning part of a very large portfolio in 1kg gold bars can achieve modest price savings.

Gold Investment Coins vs Bars?
Gold bars have lower production costs

Setting objectives

Planning is an important activity when building a gold portfolio. As a savvy investor, you just can’t go about buying a bunch of gold coins and a few bars. An unplanned approach can be disastrous for your portfolio. First of all, you need to set your objectives before making a purchase. Do you want to invest in gold and make quick gains from price rises in the near future? As stated above, investing in coins can be advantages in this scenario. However, if you wish to amass large volumes of gold at the cheapest possible price, you may be better off investing in bars. This could be part of a long-term investment strategy for the purpose of wealth building. You don’t necessarily need to buy large bars. Investing in smaller bars can help you attain liquidity and divisibility for your portfolio.


Being tax efficient

Both coins and bars are excellent for tax saving, albeit with a few subtle differences. All investment-grade gold is VAT free in the UK, so coins and bars would both qualify under this umbrella. But you may require to pay capital gains tax (CGT) on gold bars. This could apply at the time of sale. Investing in UK legal tender coins like the gold Britannia can save you VAT and CGT. Clearly, certain gold coins are a better investment from a tax perspective.

Have you thought about storage?

Storing your gold is yet another factor that influences your decision to buy coins or bars. When you buy a large number of gold coins, you can avail of a large discount and they come packed in monster boxes, which make it easy to store. Many investors prefer this. Bars can be stacked on top of each other but may require a larger storage solution.

Talk to the experts at Physical Gold for practical advice on choosing coins or bars

At Physical Gold, our friendly investment advisors can discuss your investment objectives with you and guide you on whether you should buy coins or bars. If its coins, you’re after, they can help you formulate a strategy and ensure that you buy the right coins. Contact Physical Gold on (020) 7060 9992 or simply drop us an email. A member of our advisory team will be happy to call you back and help you take the right steps in building a strong gold portfolio.


Image Credit: Osmar Valdebenito

Blog Guides

How to Sell Gold Sovereign Coins

Gold Sovereigns have been in circulation for over two centuries, making it one of the most popular iconic British coins with a large secondary market. The Royal Mint struck these coins, using 22-carat gold from the year 1817. They have now been put out of circulation and are available as a bullion investment coin. The iconic design of St George and the Dragon, created by Benedetto Pistrucci make these coins unmistakable and they are in great demand from numismatists and investors alike.

Gold sovereigns can carry hefty premiums depending on the monarch and the year. For example, the Young Head Victoria can fetch prices of around £300. There are even rarer ones like a proof set created for Edward VIII. A single coin from this set can command a price of £516,000. So, investors need to know how to sell these coins in order to maximise their profits.

How to Sell Gold Sovereign Coins
Selling a gold Sovereign can be very lucrative

Identifying a reputed online dealer

Since the Sovereign carries a numismatic value as well, as its value in gold, it’s best to sell your Sovereign gold coins to a reputable gold dealer. This will ensure you receive a fair price that reflects the gold content and the numismatic value of the coin. Members of the British Numismatic Trade Association (BNTA) are trustworthy. Going through a reputed dealer can get you access to a wider secondary market, increasing the chances of a quick sale at a good price. Preparing to sell is a key factor. If you want the best possible price, let the dealer know in advance that you want to sell your Sovereign coins. It’s important to let your dealer know about the complete details of all the coins you want to sell. You must decide on a timeline for the sale. This will help your dealer identify the right buyer and bring the coins into the market at a time when the best price can be achieved. Don’t be in a hurry to sell, unless you need the funds for an emergency. A distress sale is always likely to get you a far lower price.

Click here to download the FREE 10 Commandments when selling gold coins

Attempting a private sale

Some investors believe that they can get a far better price by arranging a private sale. But, be aware that it may not be possible for you to check the backgrounds of the buyers. It could be risky to have them visit your home. As an individual investor, it is unlikely that you will have a large network of interested buyers. So, you will be forced to depend upon only a few interested buyers who may have responded to your ad. Of course, it may also take a lot of time and effort to post your ads and reach out to the right audiences. A dealer would be far more adept at reaching out to interested parties.

Research your dealer well

You aren’t forced to sell through one dealer only. If you identify two or three reputed dealers, feel free to engage all of them. Doing your research means connecting with other investors and buyers in the marketplace. Find out all about a dealer’s reputation and background by speaking to other investors and viewing their ratings online.

Contact Physical Gold for the best way to sell your gold Sovereign

An effective way to properly market your gold Sovereign is to simply speak with our investment team. Physical Gold Limited is registered with the BNTA and have a long track record in providing exemplary service. Getting in touch with our team is easy. Simply call (020) 7060 9992 or visit our website to reach out to us.


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