There are many reasons to invest in silver in the UK. Here are our top 10 reasons why people invest in silver bullion.
Table of Contents
10 Reasons to invest in silver in the UK.
Silver has had an excellent year. Silver’s price gains are almost double that of gold. This is largely due to geopolitical tensions, falling real rates and a weak dollar.
The price of silver is often more volatile than gold.
However, many self-proclaimed ‘silver bugs’ believe that the price of silver is still currently on the low side (2022) as silver is still nowhere near its 1980 high of over $49 per ounce.
Silver has intrinsic value.
Silver is a precious metal, it has an intrinsic value.
Not only is silver scarce, silver also has to be mined, transported, refined, and minted.
A huge amount of labour and resources go into mining and producing silver bars and coins, making it valuable. Although there is more silver than gold on the planet, the silver market itself is relatively small.
Often, if the price of gold is perceived to be too high, then many investors start to flock to silver which increases demand and usually, the price of physical silver starts to go up.
Silver is money.
BullionVault is the world’s biggest online bullion market. Economies of scale mean you can buy, sell and store gold and silver at close to wholesale prices.
Physical silver is a store of value.
It can’t be created out of thin air like fiat currencies.
Silver has no counterparty risk.
Physical silver doesn’t need another party to make good on a promise or contract.
Silver has no default risk as silver has value in itself.
Physical silver is a real asset that has been used as a form of money for thousands of years.
Silver is a commodity.
Not only is silver a store of value, it also has many unique properties.
It is strong as well as ductile and malleable.
Silver has the highest electrical conductivity of all elements.
Its electrical conductivity is even greater than copper.
Silver also has anti-bacterial qualities and is very reflective.
Silver has industrial uses.
Silver is a vital component, often used in batteries, photography, solar energy, dentistry, glass coatings, water purification, touch screens – the list goes on.
Silver plays a key role in our modern lives as it is a major component for the technology sector.
For example, the vast majority of mobile phones contain some silver.
Demand for silver is high while supply is restricted.
Industrial demand for silver in products such as solar panels, electric cars and mobile phone devices is high, while at the same time, silver supply is falling due to the current pandemic which is causing supply restrictions.
The price of silver has been low for a long period of time, which has resulted in little investment in the exploration and development of new silver mines.
Additionally, a long period of low prices has affected how much scrap metal is available in the market.
This has now had a knock on effect, as demand is starting to increase because there have been silver supply issues for a considerable period of time.
The gold to silver ratio is in favour of silver.
In very simple terms, the gold to silver ratio is basically: how many one ounce silver coins or bars does it take to purchase a one ounce gold coin or bar?
The current ratio (2022), is around 70 to 1. That means it takes 70 ounces of silver to buy 1 ounce of gold. In historical terms this ratio is actually a quite high ratio. A ratio of 20 to 1 for example, would be considered a very narrow ratio.
Currently, silver could be considered undervalued compared to gold, therefore, potentially more upside to come.
Over the last 20 years or so, the gold to silver ratio has averaged around 60 to 1. Again, meaning it would take 60 ounces of silver to buy 1 ounce of gold.
The gold silver ratio actually recently peaked to an all-time high, over 115 to 1 at the end of March 2020, which would be the highest level in the ratio’s history.
Silver is still relatively cheap.
Silver is still relatively cheap compared to gold and other assets.
In the UK you can pick up a 1 ounce silver Britannia for around £30-£35 (2022), however, prices are still fluctuating.
This makes silver much more affordable for the average investor.
This potentially makes it easier and more practical for an investor to make small purchases of silver, regularly, over time to build wealth. You can also essentially liquidate small amounts of silver quickly and easily to make smaller purchases of goods and services.
Is silver the most undervalued asset on the planet right now? Read more here.
Silver often outperforms gold in a bull market.
Historically, silver is more volatile than gold, which means silver often surges higher and faster than gold in a bull market.
Don’t forget, however, in a bear market, silver falls more than gold, so there are obvious risks involved when investing in silver.
In the last bull market from 2008 low to 2011 high, silver vastly outperformed gold.
The whole silver market is very small in comparison to other assets and even the gold market, therefore, even small amounts of money moving in and out of the silver market can vastly impact the price of silver.
Physical silver is an asset you can hold in your hand.
With so many digital assets, so much digital currency creation and so much digital trading in the world today, silver is one of the few physical assets you can hold in your hand, knowing that you have 100% control over your wealth.
No one is able to hack physical silver, it is not susceptible to cybercrime or vast amounts of digital debasement.
Physical silver can be completely private, confidential and 100% in your control.
Silver coins and bars.
Silver coins are a great place to start for any precious metals investor. The 1oz Royal Mint Silver Britannia or 1oz Silver Canadian Maple for example, are very popular in the UK. These coins are small in size, recognised worldwide, and are easy to buy, store and sell.
With silver bars you can potentially take advantage of smaller premiums over spot price. For example, a 1kg silver bar would normally have a smaller spot premium than that of the same weight in silver in say royal mint silver coins.
Silver can be TAX efficient.
Silver Britannia coins are British legal tender.
Therefore, a Silver Britannia coin has the luxury of being Capital Gains Tax exempt in the UK.
You can sell Silver Britannia coins, no matter how many coins you have, and any profit will be tax free.
This makes the Silver Britannia coins a very cost effective way to invest in tax free Silver.
The Silver 1oz Britannia coins are extremely popular with investors in the UK, due to being capital gains tax exempt.
In the UK silver is subject to VAT (currently 20%).
Could 2022 still be a great buying opportunity for silver? You might be hard pushed to find any other asset as undervalued as silver at this moment in time.
Many precious metal experts such as Jim Rickards and Frank Giustra are predicting a crash in the fiat currency system. With all the problems within the financial system and the vast amounts of monetary stimulus happening at present, the idea of a major financial crash doesn’t seem like such a crazy idea anymore.
In this scenario, silver could play a vital role in preserving wealth during the demise of the monetary system.
Silver has had a great year so far, and potentially there is still room for more upside as volatility in the monetary system continues into 2022 and beyond.
Silver is an excellent asset to add diversity to any investment portfolio.
However, silver is considered to be more speculative and, therefore, should be viewed as a more long-term investment.
Silver prices can fluctuate vastly over time. Precious metal prices such as silver can go down as well as up, always do your own research before you invest in silver bullion in the UK.
Top recommended websites to buy silver bullion online.
Top recommended, cheapest, safest and most accessible ways to buy silver bullion online with minimum amount of effort.
BullionStar is a popular online gold and silver bullion dealer. They offer worldwide shipping as well as a vault storage service which is a great solution for buying, selling and storing bullion.
BullionVault is the world’s largest online investment gold service taking care of $3 billion for more than 85,000 users.
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