How to buy silver
Or get exposure to the silver price
A number of readers have asked how to buy silver - or how to get exposure to it the price, so here goes.
Broadly speaking, these are the four ways to get exposure to the silver price:
Buy silver bullion - coins and bars
Buy a silver ETF
Buy silver price via a spreadbet, CFD or a future
Buy a silver mining company
Let’s now consider each of these.
It’s a pain in the butt, but in the UK silver is subject to VAT, which means an extra 20% on the price, but only if you take delivery of the bullion.
So, if you want to buy silver coins and bars, store them with the dealer and you won’t have to pay VAT.
Moreover, if you buy silver Britannias (which aren’t the cheapest coins), you won’t have to pay any CGT either.
I gather there are some clever wheezes to avoid VAT and take delivery, but I do not know what they are - and I would be very careful not to break the law.
Which bullion dealer to use? My current recommended bullion dealer in the UK is the Pure Gold Company. I also like Goldcore in Dublin. Both deliver to the UK, US, Canada and Europe, or you can store your bullion with them. They will help you with the VAT issue.
My ambivalence to silver is well known and buying bullion tends to turn you into a long-term holder, which you might not necessarily want to be. While I can see a rally here over the next few months, I also recognize that, in a market panic, silver, currently at $19, could easily fall below $15. It could just as easily go back to $50, the price it reached in 2011, or higher. In fact, sooner or later it will go back there.
If you are looking to be a long-term holder, bullion is good. If you are looking to flip, you can still do this via Pure Gold Company or Goldcore, but there are other, simpler methods, which I’ll come to in a moment.
I used to know a chap who would buy Georgian silver tea sets on eBay and elsewhere at prices below the spot value of the silver content. If you have some spare time, that’s not a bad way to pick up cheap silver - and there’s no VAT on second hand goods bought from private sellers.
So to the other options.