Investing in Silver Bullion?
Suppose I wanted to invest in silver bullion, partially as a serious investment, partially for the novelty of having some "portable property".
Suppose I went to a coin dealer and bought several silver 1oz pieces, or a large bar, would I be able to sell them later without excess testing and fees? Assuming that I took and kept possession of the bar(s) to avoid storage fees.
What I mean is when I go to sell the bars (back to a dealer) will the process be: "Your bars have the right mass, here is your money". Or will it be more convoluted?
I've heard stories about a person who took his bars in, and had to pay for the dealer to drill holes in bars to ensure that the bar hadn't been hollowed out and filled with a cheaper metal.
What is a typical pathway from purchase to sale of a bar of silver?
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If I took one of my bars in to a coin shop to sell, and they wanted to drill in hole in my J/M serialized bar – I would give them a piece of my mind (loudly) and leave!
you should have NO problem selling them as long as they are a known refiner / assayer.
As far as the fees – thats a different matter. I have only bought from a coin store, never sold to them. Always sell to individuals – as they should atleast pay spot price (if price is in down trend) or more then spot if price is in uptrend. I doubt a coin shop will pay over spot price, as they can get it AT spot price or just a tiny bit over, and thats thier worst case scenario.
And along the same lines. SHOP AROUND – can’t stress that enough. I found that coin shops in my area had very noticable price differences for the same thing – call each coin shop one morning, and ask for the price of a 10oz .999 silver bar. Go visit the lowest 3 or 4 prices you get – (visit with empty pockets) just a get the feel of the place and see if you like who you’ll be giving your money too.
I should also say (since you asked), take it with you! DO NOT pay for storage – its no good if you can’t get to it when/if you need it. Also, any fees over time will eat up some profit you will make if the price goes up, and it will add to the lose if the price goes down.
If its just an investment, buy in on a physical ‘pool’, like at kitco.com. Its about 1/3 the way down on this page:
https://online.kitco.com/sellprice/selling.html
I only mention this as an option. Personally, I would suggest getting physical if your interested in it.
Last but not least – If you do decide to purchase some silver from a local coin shop – PAY IN CASH!! No credit cards, no debit cards, no checks, no names, no nothing – just pay, say thanks and leave.
Good luck!
edited:
"Nobody buys the actual metal as an investment anymore."
Nobody??? really??? Check E-bay – find a .999 silver "anything" that sells for less then spot price. 1000’s of oz.’s per week are sold on E-bay at what I consider high prices, especially when you take shipping into consideration.
not really sure but do you really think silver is a good investment? most silver goes to old school photo development. I can only see deamnd shrinking from here. still it would be kind of cool to own big hunks of silver.
Did you ever see anyone try to buy anything with a silver bar or buillion?
If you want to invest in silver, the futures and stock markets have several methods to own silver, and these markets are much more liquid (meaning, you can buy and sell easily) than owning the metal.
If you buy silver today and go back to the very same dealer that sold you the silver that day you will lose money.
If you keep silver in your house to avoid storage fees you still have to invest in insurance.
If you want to have some "portable property" you can buy a Prepaid MasterCard Debit Card Valid Worldwide.
If you buy silver coins you are paying a fee for the manufacturing of the coin aditionally to the price of silver.
Unless you are into numismatics. I suggest you not to buy silver coins.
Nobody buys the actual metal as an investment anymore.
If you want to invest in Silver, you can buy stocks in silver mines, mutual funds specialized in Silver mines and of course you can buy silver as a commodity.
If you need more detailed information. Let me know.
Warning …. Now is not the time….
I have bought silver bullion in the past and had no problem at a coin show selling quality bars. I bought Engelhard 1 and 10 oz. bars. I paid a premium over the spot price and was able to sell at the spot price. A dealer usually sells quantities at a profit margin of 10% over spot. Many years ago, silver was used in the x-ray and photo industry. Now silver is used in electronics, jewelry, and as a medium of investment. The US still produces bullion coins but now has to buy on the market to produce the collector coins. If you are using money that you don’t need to live on or for a rainy day, by all means invest in silver bars and rounds from the companies that are accepted on the commodity market. If you decide to invest in rare coins, only buy from a reputable dealer and only buy graded and certified coins. The same goes with silver bullion, buy from a reputable dealer and buy genuine Englehard, JM, Credit Suisse bars or rounds. Other easily traded bars or rounds include the US silver Eagle, Canadian Maple Leaf, Mexican Libertad, even the Chinese Panda. Before you buy, READ ABOUT THE BARS AND BULLION COINS. Know their weight, negotiate large purchases, and have fun collecting. I have never had a problem at a coin show and have even had dealers bidding for my pieces.