Tips on Buying Silver

There are many different types of silver available so some tips on buying silver can be very useful.

Let us look at the various types of silver available.

Silver Etfs (Exchange Traded Funds)

Silver etfs are a popular way to buy silver. With a silver etf, the apparency is that one is buying silver. However one is not actually buying silver here but only buying units, the value of which are based upon the daily movement of the silver futures price and it is not possible to redeem that silver and take delivery. One can only 'cash in' one's units and receive the value in currency. There is even some question as to how much of silver etf is actually backed by silver. If, for example, the etf went belly up and it was found that the amount of silver used to back the etf was less than the units in the investors accounts, how would that affect the value of those units?

Investing in silver etfs is not actually investing in silver any more than investing in the stock or shares of silver mining companies.

Of course when one invests in silver mining companies one is really investing, not in silver, but the company itself. This can include any other mining activities the company is undertaking as well as the management a strategy, the ability of the management team to make wise decisions and so forth. So that is not actually investing in silver either.

Silver Coins
Investing in silver coins is the first type of silver investment there is. Here one can get pure silver coins to own. Such coins as American Silver Eagles or Canadian Silver Maple Leafs have always been very popular and considered safe coins to own. The main disadvantage with them is the high premium it takes to buy them. You can pay anywhere up to an extra fifty percent of the silver value to buy silver coins. Then there is the shipping, insurance and storage costs to consider. All these add to the costs of buying silver coins. Silver rounds are a better choice here.

Silver Rounds

Silver rounds are like silver coins except they are not legal tender. Where as an American Silver Eagle is legal tender with a face value of one dollar (far less than the silver content I might add), a silver round is simply a coin shaped piece of silver with a value equal to the silver content. One of the advantages of silver rounds over silver coins is the reduced cost of manufacture and so smaller premium for the investor. Again, one still has shipping, insurance and storage costs to take into consideration when looking at the overall cost of purchase.

Junk Silver
Junk silver coins, or early US silver legal tender coins are another good way of accumulating silver. Actually junk silver coins is not the proper name for them. Basically they are old silver coins that have no numismatic value but are valued for the silver content. They are legal tender in the country they are, or were, used, such as the US, Canada and Australia for example. The word junk really refers to their collectible value, not the silver value. You can buy them by the bag and usually consist of early dimes, quarters and half dollars. You can also buy junk silver coins by the roll. Many silver dealers sell them.

Scrap Silver
Scrap silver is another way of accumulating silver. Here you can often get silver at cost price. You do need to know a bit about silver and what price you should pay for scrap. Old broken jewelery is a good source. Sometimes old silver coins can turn up as scrap silver. In this case always check if the coin has any collector value because if it does, it can be a lot higher than the silver content. It pays to do some research into the area if you intend collecting or accumulating scrap silver.

Silver Bullion Bars

Silver bullion bars are a cheaper way of buying silver. The bars come in a range of sizes but are easier to manage financially than, say, gold bars, due to the lesser cost of silver by the ounce than gold. You can buy silver in one and fifteen kilo bars and the premium is much less than with the silver coins or silver rounds. Again one still has to take into consideration the shipping costs, which can be significant with the increased weight of bullion bars compared to coins or rounds. Also, again there is insurance and storage to consider.

A Smart Way to Buy Silver
A real smart way of investing in silver that obviates a lot of the premium and saves on shipping costs, insurance and storage is by using a system whereby the silver is purchased on your behalf and stored in a bank vault for you. There is, of course some premium and a storage fee but it is much less and one does not have the problem of maintaining security of the storage.

Gold Money is one such system and one can buy virtually any quantity of silver from just a gram or two up to as many ounces or grams as you want. This is ideal for an investor as one can then embark on a regular savings plan but with the ability to vary ones regular savings according to ones ability to save. One can also buy gold this way.

The silver is stored in a bank vault in either London or Zurich and fully insured. It is audited by an independent third party on a regular basis to ensure that the silver or gold in the vaults exactly matches the record of silver or gold in the clients accounts.

With the lower purchase and maintenance fees and less hassle handling and looking after ones silver, Gold Money is an ideal way to accumulate a silver nest egg and when it comes to tips on buying silver, this must surely take the biscuit.

Quick, Silver Bullion

Quick, silver bullion available, is the word out to German investors over the border from Austria. In this case it is an Austrian pure silver coin which can still be taken across the border legally.

The coin is known to numismatics as the "Silver Philharmonic,". It is made of .999 fine silver and shows an organ and the country of origin, being the Republic of Austria on one side and the other is the well known "Vienna Philharmonic Silver" with a few musical instruments from the orchestra.

The coin was originally issued in 2008 and intended for investment rather than collection and marketing spokesman of the Austrian Mint, Bernhard Urban, describes it as being "unique" in Europe. The face value of the coin is just €1.50 Euros, but with the value of silver being around €11 Euros (around 15 dollars US) to somewhere over €14 Euros (about $20 US), no one is going to spend it to buy a beer.

Anyone traveling from Austria to Germany is allowed to bring €10,000 ($15), into Germany without having to declare it at customs. This means that a few Germans have discovered a way of importing "Silver Philharmonics" in 6000 lots, regularly quite legally, even though the silver content is much more. The difference between the face value and the silver content being as much as €110,000 ($156,000) depending on the price of silver.

This is so popular that it's a four-week wait currently for the silver coin at the Oberbank in Salzburg and the Austrian Mint can hardly keep up. In February 2008, the mint anticipated sales of three or at most, five million coins; by the end of the year, however, almost eight million were in circulation. And already in 2009, nearly five million pieces have been bought or ordered.

Seems that somebody is expecting the price of silver to go up and is laying in a store for when that time comes. The motto seems to be, "quick, silver bullion is on the rise, buy now!"

Sterling Silver

There is a big difference between pure silver and sterling silver.

Sterling silver is a term that originates in England around the 13th century. The word Sterling, according to the World Book Dictionary originated from the old English word 'steorra' meaning star which was on certain early Norman coins, and 'ing'.

Over the years, sterling silver has now come to represent a particular standard and quality of silver from which other metals are judged.

Sterling silver has 92.5 percent pure silver and 7.5 percent of other metals, usually copper. The ‘fineness’ is represented by .925. this fineness is different to the fineness we usually see in silver coins which is normally .995 or even .999.

All sterling silver should have a hallmark stamp. This should include the word ‘Sterling’ and or .925 percent or even the Lion Passant Mark included as part of the hallmark.

The Lion Passant Mark (see picture) is the British assay mark for sterling silver. The word passant indicates ‘walking position with right foreleg raised’. A hallmark is a indication of, the quality or standard of the precious metal it is stamped on and, on sterling silver, usually gives some indication of the date the piece was created, where it was created as well as the initials of the maker.

Most silver coins and bars usually have a silver content of .999 fineness and 99.5 percent silver. But you can get sterling silver coins. The hallmark does not always appear such silver coins although they should still be noted as sterling silver of course.

Regardless of the type of silver, silver remains an excellent way to store assets and value. At any rate the important thing to remember when it comes to silver coins, is that one is not looking for sterling silver coins but pure fine silver coins.

Sterling silver better refers to silver objects which have a hallmark that indicates the quality of the silver, the year of manufacture and the city in which the object was made.

The same basic system of establishing these facts by hallmark has been in existence in England for several hundred years and is still used today. The system of hallmarking items has been recorded as being around since the fourth century AD and records of hall marks on items from the Byzantine period have been recorded.

Establishing the authenticity of silver coins however is established by doing an appraisal of the coin by a reputable and experienced appraiser and having an certificate that establishes the quality, condition and value of the coin.

No coin, these days should be described as sterling silver if it is not. Nowadays the British Royal Mint strikes many silver coins in sterling silver form with the silver content is therefore .925. These coins do not have a hallmark however.

Regardless of the type of silver you buy, at least, if it is sterling silver you will know exactly what you are getting and silver, being silver, will still retain its intrinsic value on the market.

Buy Fine Silver

To buy fine silver we should outline first what constitutes fine silver as, if you want to buy silver for investment or to preserve assets or simply to just to collect silver, one should have a good idea of the different types of fine silver there are.

Silver is a malleable metal, slightly harder than gold, with a white metallic lustre that can be buffed to a high degree of polish. Of all the metals, silver has the highest electrical conductivity making it ideal for electric circuits and wires in high fidelity equipment. It has the highest electrical conductivity of all metals. However due to cost, copper, the next highest ion conductivity is usually used in more common electrical and electronic equipment.

Types of Silver
Silver has been around for hundreds of years and has been valued as a precious metal for coins as well as artefacts, ornaments and jewelery. It has also been traditionally used by the well heeled for high valued tableware more often known as silverware. Of course it has, and still is being used as currency coins and in silver rounds and bars for investment and value storage reasons.

A silver standard refers to the millesimal (millesimal = a thousandth part or part in one thousand) fineness for the silver or silver alloy used in manufacturing of silver objects.

Fine Silver
Fine silver is the best silver of all. It has a millesimal fineness of 999. It is also called pure silver and will have 99.9 percent silver. There is no such thing as pure 100 percent silver as there are always trace amounts of impurities which are virtually impossible to guarantee are removabed. Fine silver is used to make to make bullion bars for international trading and silver investment. It is also used for some silver coins, particularly of the proof quality currency coins and silver rounds. In some areas, such as silverware for example, fine silver is usually considered to be too soft for general use and so sterling silver is used instead. (see sterling silver below).

Britannia Silver
Britannia silver, on the other hand, has a millesimal fineness of 958. This silver alloy is 95.84% pure silver and 4.16 per cent copper or other metals. The Britannia standard was originally developed in Britain in the late 1600s to prevent sterling silver coins from being melted to make silver plate. In Britain it was mandatory until 1720, at which point the sterling silver standard was restored again. The Britannia Silver then became an optional standard when the sterling silver standard was restored. It thereafter became an optional silver standard

Mexican Silver
Mexican silver has a millesimal fineness of 950. The Mexican silver alloy is 95% pure silver and 5 per cent copper or other metals. From 1930 to 1945, Mexican silver had a millesimal fineness of 980.

French Silver
The French standard has a millesimal fineness of 950. The French 1st alloy is 95 % silver and 5 per cent copper or other metals.

Russian Silver
The Russian standard for silver is based on the zolotnik . This word comes from the word which actually means gold. This originated as the weight of a gold coin circulating around the late 11th century in Kievan Russia. A zolotnik originally represented a 1/96th of a pound , then later, 1/72nd of a pound. In the metric system, one zolotnik is equal to 4,266 grams and 96 zolotniks equal one Russian pound.

If you convert the Russian marks to sterling values, we see the following comparisons in silver purity degree:
84 zol. = 875/1000
88 zol. = 916,6/1000
91 zol. = 947,9/1000
Sterling Silver
Sterling silver is popular in the U.K and has been used in England for several hundred years. Sterling silver is more ideal for tableware and some jewelery for the durability afforded to it by the other metals with which it is mixed. Sterling silver is used predominantly for tableware, commonly called silver ware and is that which burglars traditionally make off with in English crime novels. Fine silver is generally considered too soft for producing large functional objects such as silver trays, soup tureens etc, So an alloy is made to strengthen the silver. Sterling silver has a millesimal fineness of 925. This alloy is 92.5 % pure silver and 7.5 per cent other metals, usually copper.

Coin Silver
Coin silver fineness can vary depending on the mint or manufacturer and the reason for the strike or production.

The term 'coin silver' derives from the fact that it was originally made from melting down silver coins. There are some differences between the coin silver standard and the coin silver alloy, as actually used in making silver objects.

The coin silver standard in the United States was 90 percent silver and 10 percent copper, as dictated by US FTC guidelines. In silver smithing, however, coins that originate from other nations can vary from 750 to 900 millesimal fineness. Some examples are given below.

Buying silver coins is a popular method of physically holding silver. Canadian Silver Maple Leaf. US Silver eagle are just two very popular silver coins sought after by collectors, numismatics and silver investors.

Interestingly, the Islamic dirham silver coin is pure silver with a specific weight equivalent to 3.0 grams.

The silver bullion coins of the Royal Mint issued since 1998, known as "Britannias" for their reverse image, are minted in Britannia standard silver. The recent production of silver coins from the US, Australia and the U.K, to mention a few, can have varying degrees of silver fineness these days depending on the purpose of the coin.

And there is also the very popular junk silver coins available as sterling silver coins. These were minted until 1919 in the U.K, Australia (1945) and the USA.
Other Silver of Lesser Fineness

Some other countries produce silver of a lesser fineness. Scandinavian silver, for example, has a millesimal fineness of 830 with the silver alloy usually containing 83 percent pure silver and 17 percent copper or other metals.

German silver has a millesimal fineness even less of 800. It is one of several silver standards used in Germany, and has been in use since 1884. This silver alloy is only 80 percent pure silver and 20 percent copper or other metals. Egyptian silver is very much the same as German silver.

Silver Accounts
A relatively new way of buying silver is the silver account method. Here are all the advantages and none of the disadvantages of buying fine silver. One can buy any quantity from the very tiny just a gram or two right up to the larger bars. There are no shipping costs to be concerned with and security and insurance are taken care of by the custodian. There is usually a storage fee to pay and the premium is not as high as buying many other forms of silver. basically one opens an account at say, goldmoney.com for example and then funds the account. Silver is then allocated to your account. The actual silver is held in storage in bank vaults and audited regularly by an independent auditor as well as insured buy Lloyds of London. The silver here is pure fine silver of .999 and a very simple and convenient way of holding pure silver.

You can also take delivery of your silver in the form of 1000 gram gold bullion bars from goldmoney. the cost is nominal and shipping and transport will vary depending on what country you want delivery too. Another advantage with a gold account of this type.

Buy Fine Silver
So there are many ways of buying fine silver available and each have their advantages. Obviously the finer the silver the better value it has from an investment and stored value point of view. But with the shortage of silver these days due to lesser production, higher production costs and bigger demand, to buy any silver is a good idea.

Silver Nuggets

Silver nuggets are rare but can still be found when prospecting, usually for gold.

Silver nuggets are wriggly bits of silver prospectors may find on the surface when panning in streams or rocky outcrops. Also by metal detection. As in gold nuggets, silver nuggets are found on the surface rather than underground or open face mining. They are rare as most silver is found underground and usually combined with sulfur, arsenic and other nasties. Also in various ores such as argentite and chlorargyrite.
In May 2000 a giant silver nugget, weighing in at 165 kilograms, was discovered at the Elizabeth Hill mine near Karratha in the Pilbarra Region in Australia. This is thought to be the largest silver nugget discovered in Australia.

Silver nuggets are also lumps of silver used to create necklaces, bracelets, earrings and other ornaments. These nuggets are not those found in the ground but small pieces of silver designed for this purpose.

There is also a silver coin from Australia sometimes called the silver nugget but we don’t mean that. Silver nuggets is also a term used for silver used in the jewelery business for the creation of necklaces, earrings, pendants and so forth but we don't mean that either.

Silver nuggets are so rare though that it would be a good idea and easier to collect silver coins such as the early US silver dollars or, American silver Eagles, Morgans or Canadian Silver Maple Leaf coins and silver rounds.

Silver rounds are still easily obtainable despite the shortage of silver and can be purchased from most reputable dealers, and are usually available in one ounce coins. Most of the popular coins are 99.9 percent pure silver and, when it comers to investment in silver bullion, it is recommended to stick to silver rounds if possible as these have a low premium.

Silver nuggets can occasionally be found at eBay and other auctions as well as precious metal dealers, sometimes they can be found advertised in auctions such as eBay and other precious metal auctions. Here one needs to take care that the seller is genuine and that the product is as described. Silver nuggets are rare enough that one needs to do some due diligence before buying silver nuggets sight unseen at auctions.

If you are fortunate to come across a genuine silver nugget in your research and travels through the precious metal world it is likely you will have a interesting time with your collection and will have something interesting to show your friends.

Silver

Silver is a precious metal with the chemical symbol of AG from the Latin word Argentum.

Silver is a bright silvery colored (naturally) hard metal used in a variety of ways including industry, photography, cutlery and art as well as investment and jewelry.
Due to its excellent electrical conducting properties, silver is used in industry extensively for printed circuit boards and contacts. You will also find it used on the back of high quality mirrors as well as being applied in chemical reactions to produce other chemicals in which silver plays a part. Of course virtually everyone knows that silver is used in photography as well.

Unlike gold, silver does tarnish in the presence of certain chemicals, namely oxygen, ozone, hydrogen sulfide and air which contains sulfur. But it is easily cleaned and the tarnish rubbed off with a suitable cleaner.

Silver is even used in the health industry, such as dental and colloidal silver for its anti-bacterial for example. Hippocrates noted that silver had healing properties when correctly used.

So silver is a good all round precious metal with many uses

Of more interest to us is the investment side of silver. Because it is used in industry and other areas silver gets 'used up' and not replaced. Coupled with the small amount of silver mined means that silver is actually in short supply and this makes it an excellent investment vehicle.

Silver comes in either pure silver, such as in silver bullion bars of silver coins and rounds, or as sterling silver where the amount of silver is 92.5 and the balance is usually copper to give the silver more durability. Junk silver coins, early American dollars, dimes and quarters for example and even early British sixpences, contain a quantity of silver anywhere from around 45 percent up to ninety percent.
All these are valid forms of silver investment with the only question be, how much do you pay for them. Obviously one goes for the cheapest or the silver with the smallest premium. This would be silver rounds, junk silver and the larger silver bullion bars. Other forms have a higher premium, i.e. you pay more for the silver per ounce.

Silver, ounce for ounce, is cheaper than gold at the moment. So you can buy more for the same money. The disadvantage is that for the same amount of money you have to ship and store more silver by weight.

One of the best ways of accumulating silver which obviates these problems is using an escrow service. Here you open an account with a company that will sell you the silver at a nominal premium and store it for you. The storage is insured and you do not have the shipping and security issues.

Another advantage is that you are not restricted in the quantity of silver you buy, whether small or large, you can buy any amount and, if and when the time comes, just as easily sell it again. In fact one can take delivery of gold bullion in ones account in the form of pure 1000 gram gold bullion bars delivered to most of the western world.

The same applies to gold of course and one can have a balance of assets in both gold and silver this way.

But whatever your preference, buying silver is an excellent way to store some of your assets and preserve their value.

Silver Investment

Silver Investment is a wise choice these days with the declining stock of silver and less mining occurring.

Silver is heavily used in industry due to its excellent thermal conductivity and electrical properties and is also still heavily used in photography despite the advent of digital photography.

Less than 30 percent of all silver is used in jewelery and around 20 percent used for investment and the purchase of silver bullion. The rest is used in industry and photography and so more silver gets lost through use each year.

In addition, the return through scrap is less than five percent and the world silver stock piles are depleting faster than silver can be mined out of the ground.

Less than thirty percent of all silver mined comes from mines that produce silver exclusively. Most of the silver produced is obtained as a result of other mining activities and there are no new silver mines currently started.

So the demand for silver is not likely to decrease especially with world demand increasing.

Silver investment can take many forms including silver exchange traded funds (ETFs), stocks & shares and silver bullion.

Silver etfs (exchange traded funds)

Silver exchange traded funds are simply a fund based upon the price of silver futures. One is not actually investing in silver as one is unable to buy or sell actual silver. One is simply buying into a fund, much like any other fund. Silver etfs are supposed to be backed by silver but there have been questions about the authenticity of that claim.

Regardless of the whys and wherefores, however, it is not an actual investment in silver bullion.

Silver Stocks and Shares
Here one is investing not in the commodity but in the management of mining. Most silver mining companies actually mine other products and silver is largely a by-product of that mining. Many mining companies also diversify into other areas, buying and setting assets, mining claims and even other mining companies. So the value of your stock in such companies is dependent more upon the management of that company than the actual silver value mined, if any, from the ground.

Investing in stock and shares of mining companies may be an interesting exercise, but it is not actually investing in silver.

Silver Bullion
Here we are looking at Silver investment in actual silver. One can buy silver coins, such as US Silver Eagles, Canadian Maple Leafs or even Chinese Pandas and many other silver coins. This is actual investment in silver. Of the actual silver investments, this is probably the most expensive. Such silver coins have a high production cost resulting in a high premium and which is inevitably passed to the buyer. Silver rounds and bullion bars present a better buy as the premium is lower due to less manufacturing costs involved.

Silver in Account
This is possibly the best and easiest way to invest in silver. Here there are no problems of shipping and storage or insurance or security issues to worry about. One simply opens an account at GoldMoney and then funds the account on a regular basis. For a nominal premium and storage fee, one can have silver deposited into ones account. The actual silver resides in bank vaults in either London or Zurich and is insured by Lloyds of London. It is also audited on a regular basis. Here the silver in your account is not represented by anything but is actually silver bullion in your name and legally owned by you. It is also possible to redeem silver from your account although this would probably defeat the ongoing benefits of having the account. the same applies to gold incidentally. One can also take delivery of ones gold in 1000 gold bullion bars if required.

Last Word on Silver Investment

Whatever method of silver investment you decide will depend on the benefits of each type of investment and whether you just want to play with the price of silver or are seriously investing for the long term.

In any event, silver investment is sure to be beneficial in the coming future years.