What is silver
Silver is a metal that holds both intrinsic and practical value. It has been used by humankind as both a store of value and an industrial metal for thousands of years.
It is known as the ‘indispensable metal’. This is because it is so useful across a number of industries but also as a form of currency and a financial safe haven.
Below, we ask ‘what is silver’ and look at the ways that investors can buy silver bullion to hold as part of a balanced portfolio.
What is silver bullion
Silver bullion refers to investment grade silver of known weight, fineness and at least 99.5% purity. Silver coins and silver bars are the most common forms of bullion.
Bullion is a very old word whose origins are unclear. Many believe it is connected to Claude de Bullion, the French Minister of Finance under Louis XIII.
All too often the term ‘silver bullion’ is used as a synonym for ‘silver bar’ but this is incorrect. If you are looking to invest in silver bullion then you should be aware of the different options when it comes to silver bars and silver coins.
How is Silver Priced?
The price of silver is quoted in troy ounces which is often abbreviated to “T.Oz.” or just “Oz.” Troy ounces are only used to refer to the weight of precious metals and gemstones.
1 troy ounce = 31.1 grams, this is different to the standard (avoirdupois) ounce where one standard ounce = 28.35 grams.
Silver is priced and traded internationally in US dollars. It is the US dollar spot price of silver that you see most frequently referred to. To determine the silver price in your national currency a conversion at the exchange rate between the US dollar and your national currency is required. See our silver chart page for more on the silver price.
Where does silver supply come from?
Even though silver appears uncombined in the earth’s crust, it is mainly mined as a by-product of the mining for lead-zinc, copper, gold and copper-nickel ores. Only 27% of new silver supply in 2020, came from silver mines. This means that it is very difficult to increase the supply of silver to meet demand, because supply is driven by mining for other metals.
According to the Silver Institute’s World Silver Survey 2021, mine supply fell by nearly 6% in 2020, registering its fourth consecutive annual decline.
It is possible to recycle silver, over 150 million ounces were recycled in 2020. Much of this supply came from jewellery, silverware and industrial scrap. However, over half of all silver mined is used in industry and very often in small pieces (consider your phone, or medical devices) so it is uneconomical to recycle. It has been forecast that demand is set to outstrip supply in coming years.
Who buys silver
Silver is the most versatile of the precious metals, when it comes to demand as it has a role both as a safe haven and many practical uses.
You can split the demand for silver into three broad categories
Silver’s physical properties such as its malleability, ductility and high conductivity, mean it lends itself well to a number of industrial uses including telecommunications, medical and energy technologies.
Industrial demand for silver remains strong despite previously high consumption industries (such as photography) declining in popularity. This is because the industries that are disappearing are being replaced by new ones who sustain (if not increase) demand for silver.
One of the major ‘new’ markets to look out for is renewables. Thanks to silver being highly reflective, the solar market is a significant user of silver. The average solar panel purportedly uses 20g of silver. This feeds into the wider renewables market which generally continues to increase its demand for silver year-on-year. The explosion in demand for electric vehicles (43% increase in 2020, globally) has also put pressures on silver supply. The average battery powered vehicle uses 25-50g of silver and this is set to increase as car companies press on with automation and electrification.
Investor demand for physical silver bars and silver coins, as well as silver-backed ETFs, drives demand as well but it is a small percentage compared to industrial and jewellery demand. Silver is a popular metal to hold thanks to its dual-role as both a safe-haven and industrial metal. This double edged sword means it has the ability to perform well in times of both economic growth and downturns.
Over 50% of silver demand comes from industry. Because of this, economic factors can affect the price more than they do gold, which is primarily an investment metal.
Should I invest in silver
For thousands of years humans have used silver as both a form of money and as a store of value. Whilst it has not been used as physical money for over 40 years, the properties that make it so useful remain. It has shown itself to be a store of value and has preserved its purchasing power over long periods of time. Furthermore, it is a hedge against inflation and uncertainties such as geo-political, financial and systemic risks.
Should I buy silver bars or coins?
Both silver bars and silver coins will bring similar benefits to your portfolio, namely; diversification, the opportunity to hedge against uncertainties and geopolitical risk, and financial insurance.
If you are looking to add diversification to your portfolio and enjoy potentially lucrative returns on investment, the silver bullion coins are a great option. Both seasoned and new investors like to invest in silver coins.
GoldCore has a great selection of silver coins, to suit any investor’s requirements. Every box contains silver coins of .999 silver, the purest silver bullion minted.
- 500 1 oz Silver Britannias Monster Box: Multiples of 500, sealed in mint boxes. Each silver bullion coin contains one troy ounce (1 oz) of .999 fine silver
- Silver 1 oz Britannia Tube of 25: Tube of 25 1 oz Silver Britannia coins. Each Silver Britannia coin contains one troy ounce (1 oz) of .999 fine silver.
- Silver American Eagle Tube - 20 coins: Multiples of 20 1 oz Silver American Eagle coins. Each Silver American Eagle coin contains one troy ounce (1 oz) of .999 pure silver.
- Silver Canadian Maple Leaf Monster Box of 500 Coins: Multiples of 500 sealed in mint boxes. Each of these Silver Canadian Maple Leaf coins contains one troy ounce (1 oz) of .999 pure silver.
- Silver Canadian Maple Leaf Tube of 25 coins: Multiples of 25 that are packaged in mint tubes. There is one troy ounce (1 oz) of .999 fine silver in each Silver Canadian Maple Leaf coin.
- 500 oz US Silver Eagle Monster Box: Multiples of 500 sealed in mint boxes. Each US Silver Eagle coin contains one troy ounce (1 oz) of .999 fine silver.
- Silver Australian Kangaroo Box of 250: Multiples of 250 sealed in mint boxes. Each Silver Australian Kangaroo coin contains one troy ounce (1 oz) of .999 pure silver.
- Silver Australian Kangaroo Tube of 25 coins: Multiples of 25 that are packaged in mint tubes. Each Silver Australian Kangaroo coin contains one troy ounce (1 oz) of .999 fine silver.
- Silver Austrian Philharmonics Monster Box of 500 Coins: 500 Silver Austrian Philharmonics in a box, each Silver Austrian Philharmonic contains exactly one troy ounce (1 oz) of .999 fine silver.
- Silver Austrian Philharmonics Tube of 20 coins: 20 Silver Austrian Philharmonics in a tube, each coin contains exactly one troy ounce (1 oz) of .999 fine silver.
Silver bullion bars offer many of the same benefits as silver bullion coins. However, silver bars have a lower premium as the production costs are much lower. As a rule of thumb you will find the larger the bar, the lower the premium.
Our silver bars are available in the following sizes, such as:
- Silver Bar 100 Ounce: This bar weighs just over 3 kg. If the bar is .999 fine, it contains 3,107.20 grams of pure silver. A .9999 fine bar will contain 3,110.00 grams of pure silver.
- Silver Bar 1000 Ounce: A 1000 ounce bar is equivalent to 31.1 kilos. If the bar is .999 fine, it contains 3,107.2 grams of pure silver. At 3110.0 grams, a .9999 silver bar contains only a tiny amount more silver, which means investors do consider there to be a difference between the two.
Other ways to own a silver bar
If you are looking to invest in silver, buying silver bars and coins are not the only way to get the benefits of holding silver in your portfolio. Here at silver bullion dealer GoldCore we also offer Silver Perth Mint Certificates.
Unallocated Silver Perth Mint Certificates are a great way to have legal ownership of silver but to have it stored at the Perth Mint. When you buy unallocated silver through the Perth Mint Certificate Program (PMCP), you will be issued with a Precious Metal Certificate, from the Perth Mint, in your name. This certificate will show your holdings and that it is held on your behalf.
GoldCore Unallocated Silver
Buying unallocated silver with GoldCore offers investors a simple and secure way to own silver. With this product you will own physical silver bullion in a pool of silver with other GoldCore investors. The silver is stored in high-security precious metals vaults. Its status as ‘unallocated’ just means that your holding is part of a larger stock of physical silver rather than being contained in a single bar or coin. This is a low-cost and simple way to buy and sell silver bullion
How to buy silver
There are a number of ways in which you can choose to buy silver with GoldCore. You can buy silver coins for direct delivery, or bars and coins for secure storage in a number of high-security vaults worldwide.
We realise that there is a lot to understand if you have just decided to buy silver. That’s why our dedicated team of experts is on hand to answer any questions and to help you get started.
Please give us a call to speak with one of our team: UK +44 203 0869200, Ireland +01 653 3426, US +1 888 381 8130.