Should I buy silver as well as gold bullion?
Many investors spend time deciding whether to buy gold or buy silver, but the savviest investors own both. While gold can offer the ultimate insurance and protection against uncertain economic times, silver is a more speculative investment. Both metals are commonly invested assets, but silver is an entirely different investment which can realise substantial profits despite the initial VAT outlay. It’s because of these differences that owning both gold and silver together can be beneficial.
A speculative investment
Silver does not offer the same level of security as gold, due to its price volatility, however it
remains a physical asset that is incredibly useful . This means that like gold, silver will
always have an intrinsic value, and as a finite asset cannot simply be devalued by inflation.
The price fluctuations of silver result in more opportunities to buy and sell at profit, making it
a more speculative investment. The price can move significantly and quickly, requiring careful
monitoring of the world's financial sector, but offers buying and selling opportunities.
Silver has proven to be a very good investment. In the three years between December 2008 and
December 2011, the silver price increased 233%, substantially outperforming many other popular
investment type such as stocks, property and even gold. 2019 saw silver gain 28.9% at its peak,
and outperformed gold in Dollars, again demonstrating its appeal as a speculative investment.
While the price is currently quite low compared to 2011's peak, it's common for markets, shares,
and other investment options like bullion to alternate between bullish trading (keen demand) and
bearish trading (limited demand). Usually prices hit a high or low point before they become too
expensive to back or too cheap to ignore, and then the market flips.
A long-term investment
Unlike gold bullion, all silver bars and coins are taxed at a rate of 20%. Paying
Value Added Tax
VAT often encourages investors to turn to gold. However, silver is still a good option, it is simply
advised that buying silver is very much a long term investment and should be owned for at least
Ideally, silver investments should be kept many years, however it is believed based on recent history
keeping your silver for at least a year may be long enough to recover the 20% VAT initially paid,
and to return a profit. For example, if an individual had invested £10,000 (£12,000 including VAT) in
silver in December 2008, their silver bullion would have been worth over £33,000 three years later in
can offer an effective way of diversifying an
individual’s investment portfolio, therefore spreading risk and providing additional protection
against other investments.
Despite silver being relatively low versus the 2011 peak, it is widely thought that silver will
continue to strengthen in price and demand due to the fact that silver is still widely used in
industry despite its status as a precious metal. As one of the best electrical conductors in
the world, more and more tech is using silver in a variety of forms; in electric cars, solar
panels, and in the newest computers. Read our 2020 silver price forecast for our thoughts
on the prospects for silver.
Easy to exchange
With the world economy mired in uncertainty and slowdown, many individuals choose to buy
silver as an alternative form of currency to protect themselves against any possible situation
where money loses much or all of its value.
It's more than a bit of a stretch to say that
(Pound coins and notes) will be scrapped
by the Bank of England and the economy will collapse, but the point is that British bullion coins
DO have a face value and ARE legal tender in case some disastrous event does happen.
With this in mind, silver offers a different option to gold, as small units of silver - such as 1oz coins -
provide the ideal currency to exchange or pay for everyday items due to their relatively small value
per unit. In comparison, gold coins and bars, which are around 80 times more valuable than silver,
would be better used to exchange for much larger items or assets.
If you have any questions about gold bullion investment, please feel free to contact our knowledgeable and friendly team on
0121 634 8060 who will be happy to talk your through any queries you may have. Alternatively, you can email us at [email protected]
and we will get back to you as soon as possible.