WHY SHOULD I BUY SILVER?
Widely cherished and admired for its beauty, silver is a tangible asset that attracts investors looking to diversify their portfolios. Diversification with silver products offers the chance to install a safeguard against an unstable economic climate. As the least expensive of all precious metals, silver is an affordable investment option that is also highly liquid on an international level. You might consider buying silver to set up your independent IRA.
Silver bullion bars and coins are popular forms of precious metals investment. For your security, always buy your silver bullion from reputable dealers only. These include, but are not limited to:
Silver futures contracts, silver certificates, mutual funds, and mining stocks also present opportunities to invest in silver. However, these options do not allow or represent physical ownership of silver. Therefore, many investors avoid them and prefer to invest only in physical silver, or supplement with silver bullion.
WHAT IS THE DIFFERENCE BETWEEN A SILVER COIN, ROUND, AND A BAR?
Simply put, a silver coin carries legal tender and can technically be used as currency. But the price of 1 troy oz of silver is often much higher than its face value (e.g. a Silver Eagle’s face value is $1 USD). This incorporation of a legal tender raises the value of the silver bullion. This is why silver rounds of the same weight are often less expensive than silver coins. Silver rounds are more similar to silver bars for this reason, as neither carries a legal tender.
Additionally, silver bars usually come in more sizes than coins, which offers you flexibility with investing. When you are choosing which silver bullion to buy, consider why you want to buy silver in the first place. Are you hedging your investment portfolio with silver? Or would you like to collect silver coins with the intention of holding and selling at a much later time? Answering these questions may help you decide where to invest first.
WHAT IS THE SILVER SPOT PRICE? CAN I BUY SILVER AT SPOT PRICE?
Please note, the price of silver per ounce is not the same as silver bullion prices. This is because the spot price of silver does not include distribution, manufacturing, and dealing costs. These minor costs are what eventually make silver bullion more expensive than thespot price.
Premiums may vary depending on the product and producer. In addition to the product's production and distribution costs, most dealers incorporate a nominal dealer fee which is also included in the premium. Sometimes, you will find additional value added to the price of rare, uncommon, and otherwise valuable items, since their collector appeal has been greatly increased. For all these reasons, you usually cannot buy silver at spot price.
With that in mind, Bullion Exchanges may occasionally run deals allowing customers to buy silver at spot price on certain products. Sign up for our newsletter so you do not miss out on these special offers!
WHAT IS THE DIFFERENCE BETWEEN AN OUNCE OF SILVER AND A TROY OUNCE?
The most widely accepted silver spot price on the live market is measured in a single troy ounce. This is not the same as an ounce, which is measured as 28.35 grams. A troy ounce is 31.1 grams, which is the standard for precious metals established by the French during the Middle Ages. The US adopted this standard in 1828 when we began modernizing our coinage.
ARE SILVER PRICES THE SAME NO MATTER WHERE I LIVE?
At any given time, the price of silver in the United States is the same as the price anywhere internationally. This prevents investors from buying silver cheaply in one country and selling it in another for a profit creating an arbitrage-free silver market. When looking up ‘what is the price of silver today,’ you do not need to worry about its value being less or more in other currencies.
WHAT MAKES THE PRICE OF SILVER GO UP OR DOWN?
Silver is one of the most popular naturally occurring precious metals alongside gold and platinum. It is also the most affordable, making it appealing to investors of all backgrounds. However, circumstances that affect the fluctuation of silver prices may not always be similar to those that affect gold prices.
Although changes in supply and demand play a major role in the spot price of silver, other factors also impact its price. For example, inflation and economic downturns may greatly affect the current price of silver. However, silver also has many uses in jewelry production and as an industrial metal investment. This also means that industrial demand has a large impact on the silver spot price.
Silver’s impressive physical characteristics from its antibacterial properties, high conductivity, malleability, and ductility, make it an incredibly important resource. Besides its beneficial uses in Green Energy initiatives, silver is also widely used within the medical and automotive industries. Because it is a precious metal with high industrial value, industrial demand also deeply affects the price of silver per ounce. Therefore, the silver spot price can also vary depending on this demand. This plays a particularly major role because the silver market is significantly smaller than the gold market.
Additional factors that may affect the price of 1 oz of silver also affect the gold price. Inflation-related fears, geopolitical turmoil, and supply/demand all affect the spot price of multiple types of precious metals, including silver.
WHY DOES THE PRICE OF SILVER CHANGE SO OFTEN?
Silver can seem volatile when looking at short-term fluctuations, but it has shown to remain fairly stable historically. Over time, silver prices have shown to be no more volatile than stock prices. In fact, much like gold, it usually displays an inverse relationship to the stock market. This makes silver a very attractive precious metal for fortifying your investment portfolio, especially during uncertain times.
WHAT IS THE GOLD TO SILVER RATIO?
The Gold to Silver ratio can be defined as the number of troy ounces of silver hypothetically needed to buy one troy ounce of gold. Mathematically speaking, this ratio displays the ounces of silver in relation to the price of one ounce of gold. This ratio reached a high around 119:1 in 2020.
Gold is far more expensive than silver because it is much rarer, but these two metals trade closely together. The purpose of the Gold to Silver ratio is to help investors pick the right time to make a move in either market.
Most notably, this ratio offers investors the opportunity to understand if gold or silver is overpriced at a given time. It can also help you predict how one metal will perform in the short-term in comparison to the other. If one metal is trending higher or lower, it is quite possible the other will soon follow. Therefore, when checking “what is the price of silver today?”, you might also consider viewing a Gold to Silver ratio chart.
WHAT ARE BID AND ASK PRICES?
The ask price is the lowest price at which a seller is offering to sell silver. Conversely, the bid price is the highest price at which a buyer is willing to pay for silver. The difference between the asking price and the bid price is defined as the spread or the ‘bid-ask spread.’
When you are looking for the best deal on your silver bullion, keep in mind that the spread should not be too far apart in percentage. That being said, you might also have to account for the state of your bullion or its numismatic value. These factors, and more, considerably affect the price of 1 oz of silver.
WHAT IS THE FACE VALUE OF A SILVER COIN? DOES THIS AFFECT THE PRICE OF A SILVER COIN?
Because silver coins are marked as legal tender, they carry a face value. However, the value of a silver coin, especially that of a modern silver bullion coin, is often much greater than its face value. Therefore, the face value is more of a symbolic figure on the silver coin, and not an accurate representation of its true worth. Additionally, while silver coins might be considered legal tender for a specific country or territory, they are almost never used for day-to-day commerce.
DO I HAVE TO PAY TAX WHEN I BUY SILVER?
Depending on the state you live in, taxes may or may not apply to your silver purchase. Each state has its own laws surrounding physical silver investing. As of 2019, a new law dictated that online retailers must apply a sales tax when a customer buys silver online. However, this law may also vary depending on the state you reside in, as each state has different rules regarding sales tax.
For example, as of 2020, there is a NY sales tax statewide of 4%, but local sales tax may factor in on top of that. Please refer to our tax page to find out more and access official government websites for the most current information.
WHERE CAN I BUY SILVER ONLINE?
Bullion Exchanges is proud to have a storefront in the Diamond District of NYC open 9am-4pm Monday through Friday, but we are also open 24/7 online for buyers across the country! We proudly offer the best prices on silver and other precious metals. Feel free to browse our wide selection of silver bullion online.
CAN I ADD SILVER TO MY IRA?
Bullion Exchanges works with two IRA (Individual retirement account) custodians that make buying silver for an IRA very simple. However, if you already have a custodian, you might need to check the requirements before you buy silver for your IRA. We proudly carry a diverse range of silver products, many of which are IRA eligible. Be sure to check the product description for each silver bullion item you wish to purchase. We often include a note when a product is usually considered IRA eligible!