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Are Silver Proof Coins a Good Investment?

Proof silver coins as an investment

Silver coins have increasingly gained popularity over the years for several reasons. Firstly, silver is much cheaper than gold and provides investors with an affordable pathway to access the precious metals market. Secondly, the industrial demand for silver has steadily risen over the last decade. At the same time, supplies have fallen significantly. So, there is a legitimate expectation amongst investors that the spot price of silver will eventually rise, allowing those who invested early to book healthy profits.

Investing in silver coins

Silver coins are a popular choice for collectors and investors alike. As many silver coins are legal tender in the UK, they provide an opportunity to invest, without having to carry the burden of Capital Gains Tax (CGT). However, when investing in silver coins, one needs to make the right choice. Silver coins are available as proof sets, bullion coins and rare/ collectable coins.

Are Silver Proof Coins a Good Investment?
These US Mint proof coins in silver are great for collectors

What are silver proof coins?

Proof coins were originally produced before the actual issue of a coin. They were used for securing approvals from the Ministry of Finance and the administration of the mint. Checking the proof coins is also a method used for verification of the dies used during the production process. Finally, they were retained for archival. Proof coins are usually produced by polishing the dies. This results in a high-quality finish, with a polished look and feel and sharp edges and design. The polished areas of the coin take on an almost mirror-like finish, especially in silver coins. Additionally, the dies used for production are often chemically treated to create a frosty appearance in some areas of the coin.


FREE Guide. Click here to download The Insiders Guide to Gold & Silver Investment


The rising popularity of proof coins

Due to their high-quality finish and attractiveness, silver proof coins have become extremely popular over the years and enjoys healthy demand from the general public. As a result of this, the Royal Mint has been issuing limited edition sets of proof coins. Of course, these coins can be bought at hefty premiums and are usually purchased by numismatists.

Silver proof coins as an investment

If an investment is a primary focus, then buying bullion coins is a better bet. Bullion coins finished to brilliant uncirculated finish are cheaper per gram than a silver proof coin. Most silver dealers will not pay you the same premium when you come to sell the proof silver coin. Proof coins are better suited to collectors or as presents.

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The premiums you would pay for buying a proof coin set is more or less the same as that of a commemorative issue. One needs to bear in mind that the higher price being charged for a proof coin is simply on account of production costs and limited availability. This does not change the price of the silver contained within the coin. Bullion coins, on the other hand, are freely available with low premiums. As an investor, you can secure great deals from dealers on bulk purchases of bullion coins. So, if you are buying silver coins as an investment, steer clear of buying silver proof coin sets. Buy current issues of silver bullion coins like the silver Britannia and you can land yourself a much better deal.

 

Call our silver investment team to discuss your silver coin purchases

Our investment experts offer you free and impartial advice on buying silver coins. By connecting with the team, you can stay abreast of the latest deals and find out everything you need to know about buying silver coins. Call us today on (020) 7060 9992 or contact us online to speak to a member of the team.

 

 

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Which Gold is the Best for Investment?

Best type of gold for investment

Over the last few years, the world has witnessed unprecedented levels of adversity. Several geopolitical events like Brexit, the US-China trade war, the threat of global terrorism and rising levels of government debts have pushed the world to the brink of yet another severe financial crisis.

The final nail in the coffin has been the COVID-19 global pandemic, which has crippled the world economy. Gold prices have been soaring in the wake of these adverse events. The current spot price of gold has gone beyond $1600 per ounce and continues to rise. If you are an investor thinking of parking your money in gold, it’s important to focus on the right types of gold that can strengthen your portfolio and provide good returns.

Reasons to invest in gold

As an asset class, gold provides balance to your portfolio and insures you against any negative outcomes. Apart from providing you with the opportunity to hedge risks, gold investments also protect you against monetary factors like rising inflation and volatility in global currencies. Investing in bars and coins can have different outcomes, but at the end of the day, gold is always an excellent choice for investment.

Which Gold is the Best for Investment?
Physical gold investments do not carry undue risks

Setting your objectives

Firstly, decide on your objectives. If you wish to trade in and out of the market and depend on timing, then electronic gold like ETFs may be the most efficient method. If you have a high-risk appetite, then buying gold mining shares could provide enhanced returns if that mining company outperforms the market. For those seeking, security and low risk, with tax-efficient returns, then buying physical gold as an investment is best, which can be achieved through a reputable gold dealer.


Read our 7 step cheat sheet to buying the best gold bars and coins


Achieving key objectives

Certain objectives are critical in planning your portfolio. For example, liquidity, value, divisibility and variety are key attributes that you need to focus on when investing in gold products.

Liquidity

When you invest your money in any asset class, the ability to generate funds as and when required is called liquidity. Gold bars that are manufactured by reputed companies like Metalor are very liquid. Likewise, when buying coins, you buy well-known coins like the gold Britannia or the Sovereign, which always ensures liquidity. Also, when buying your products from a reputed dealer, always check if they have a buyback scheme. This ensures that you can convert your gold to cash at any point in time.

Counterparty risk

The above term refers to the risk carried by an asset class whose performance depends on a third-party. When buying gold products is best to avoid the ones that carry counterparty risks. Any kind of paper gold products like ETFs, or mining company stocks will have exposure to such risks. It’s best to stick to physical gold investments, which are of course devoid of these risks.

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Tax efficiency

In the UK, all investment-grade gold is VAT exempt. If you want to build a portfolio that maximises its tax efficiency, you should focus on gold coins that are legal tender in the UK. Such coins are CGT exempt and will provide you with much-needed tax relief. If you buy gold bars, they will be VAT exempt but you may have to cough up the capital gains tax applicable on profits above £12,000 in a tax year.

Divisibility

Investing in gold products that add divisibility to your investment makes good sense. Divisibility allows you to sell your gold investments in small denominations at various price points in the market. Gold coins are a great choice when it comes to divisibility. They are available in a variety of denominations and sizes, including fractional ones. This allows you to drip feed your investments into the market, rather than having to sell off all your gold at one time.

Call our investment team to plan your gold investments

As we can see, the key to selecting the right gold products for investment lies in meticulous planning. But, there’s nothing to worry about. Our investment experts are there to help. Call us on (020) 7060 9992 to speak to a member of our team, or simply drop us an email and we’ll get in touch with you to help you plan your investments.

 

 

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What are the Benefits of Buying Silver Bars?

Benefits of purchasing Silver Bars

Investors often turn to silver when making an entry into the precious metals market. Well, one of the reasons that many people prefer silver at the start of their investment journey, is simply because of the gap in gold and silver prices. This is officially known as the silver-gold ratio. Of course, gold has always been more expensive than silver and in recent years, silver was 85 times cheaper than gold.

Now, in 2020, we are on the brink of another global financial crisis. Over the last few years, several geopolitical factors have pushed the global economy to the edge. As a result, investors have turned to gold to hedge their risks and the spot price of gold has risen to more than US$ 1700 per ounce. Therefore, in March 2020, silver became 125 times cheaper than gold. The ratio has now fallen slightly to 113:1. This is quite literally a ‘silver lining’ for investors who want to buy the white metal.

Benefits of Buying Silver Bars
Large silver bars provide better value for money

Why should you invest in silver bars?

More silver for your money

The primary benefit of buying silver bars is the lower cost per gram when compared to smaller silver coins. Silver bars can be bought in large sizes such as 5kg, and yet still be affordable due to silver’s low price. Silver bars have lower production costs, which results in cheaper prices per gram. When buying a bar, you can, therefore, acquire a larger volume of silver for the money you invest. Silver bars are abundantly available in the market and the common denominations are 1 kg and 5 kg. The silver market is eventually expected to rise due to escalating industrial demand. So, investing in bars provides you with an opportunity to lock in great value and book profits in the future.

Insider's Guide to gold and silver

Convenience of storage

Storage of silver bars is also easier due to their convenient size they can be stacked. If you buy silver bars from a reputed dealer, in all probabilities, you can also opt for a storage solution. Many dealers will store your silver for you in secure vaults. If you choose to receive your purchase at your own home, storing bars inside your home vault is easy as the bars are rectangular and occupies less space.

Tax efficiency

Many investors prefer to purchase coins since UK silver coins have a face value, which makes them legal tender. Therefore, they are Capital Gains Tax (CGT) exempt. Silver bars are not legal tender, which implies that CGT would apply to profits that you make at the time of selling.  Selling some before the tax year end and some after, can ensure that the annual CGT allowance isn’t breached, so no tax applies.

Get in touch with Physical Gold to buy silver bars

Physical Gold is a highly reputed precious metals broker with a team of silver experts. You can call physical gold on (020) 7060 9992 to discuss the most appropriate buying opportunities in silver bars. Likewise, you can also contact the team online and discuss everything related to your silver purchases and build a strong and robust portfolio.

 

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What are the Benefits of Buying Silver Britannias?

Benefits of purchasing Silver Britannias

In 1987, the Royal Mint released the gold Britannia coin. These coins were an instant hit and won popularity among collectors and investors. So, to replicate the success of its gold counterpart, the silver Britannia was launched in 1997. At the time of its original issue, the coin had a fineness of 95.8%. In terms of look and feel, the silver Britannia was very similar to its sister coin – the gold Britannia. It featured the Britannia icon, which made the coin instantly recognisable on its reverse.

The coin depicted Britannia as a warrior goddess carrying her trident and shield. The design for the silver Britannia was conceptualised by the well-known designer – Jody Clark. By 2013, the coin was upgraded to 24 carat silver with a fineness of 99.9%. By this time, silver investment had started gaining popularity and the demand for the coin rose significantly.

Benefits of Buying Silver Britannias
The silver Britannia is a timeless classic

Affordability vs value

Silver Britannias are affordable to buy and store, as they can be bought in tubes of 25 and monster boxes of 500 coins. Since the coin had been released as a bullion coin, they were easily available at very low premiums. Buyers can contact reputed dealers and avail of bulk discounts on their purchases. So, availability and affordability are clearly two benefits that contribute to the popularity of this coin. On the other hand, silver has always been cheaper than gold. It was 85 times cheaper than the yellow metal not too long ago and now, with the global financial crisis deepening, the gap has widened further. Currently, silver is 113 times cheaper than gold, with the ratio touching as high as 125:1 in March 2020. So, this allows investors to have easy access to the precious metals market at a cheaper price point than gold. The silver Britannia coin has made huge gains on the back of this sentiment.

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Tax efficiency

As a legal tender coin, any value increases are completely free from Capital Gains Tax. So, UK investors can save a substantial amount in taxes by investing in this coin. Tax awareness is an essential consideration for any investor building a portfolio. The silver Britannia is a clear winner in this case, as the coin offers an opportunity to build a highly tax-efficient silver portfolio.

Liquidity

The silver Britannia is an instantly recognisable, popular coin across the world. Being issued by The Royal Mint, the coins are very liquid and easy to sell worldwide. This is a huge advantage for buyers since the coin can be sold instantly at any point in time, without losing out on market value. The liquidity factor enhances the demand for this coin as for investors who are keen to hold liquid investments that can be converted into cash when the need arises.


Understand the 7 Crucial Considerations before buying Silver Britannias. Click here


Divisibility

The silver Britannia is also available in different weights and sizes. There are special anniversary editions as well. This contributes to variety and divisibility – two more important benefits of owning the silver Britannia. Variety adds to the value of the coin, while divisibility allows investors to plan their sales and sell off small portions of their silver investments at a desirable market price.

Get in touch with us for guidance regarding your silver investments

At Physical Gold, we have a team of silver experts who can assist you in making the right purchasing decisions, when it comes to buying silver coins. Call us today on (020) 7060 9992 or get in touch with our team online to get the best deals on silver Britannias.

 

 

Image Credit: Eric Golub