Why Buy Silver

Why buy silver is an important question, but one that is easily answered.

When an economy is unstable and the financial market is uncertain people look for stability and security for their assets and, perhaps, even for their day to day trading ability.

As evidenced by recent events, relying upon a paper currency is very uncertain and the value of that currency is dependent, these days, more upon the manipulation of that currency and the debt levels that have been created in the banking industry, rather than the results of production.

Something is needed then, which a person can convert their assets and savings into that will not be subject to inflation or recessions and which will provide some hard security in the times to come. Silver is just that something and is why buying silver is so important.

There are two types of silver to buy depending upon the purpose. There is silver bullion bought as a safe haven for ones savings or assets. This could be silver in the form of bullion bars of various sizes and weights. How much one pays will depend upon the size of the bars and that will depend on the size of the assets one wants to preserve and if easy access is required perhaps at a later stage. As a general rule, the larger the bar the cheaper to buy ship and store but the harder to convert into cash at a later stage and one may not want to convert all ones silver at a time. The smaller the bar the more expensive but the easier it is to move around and easier it is to sell.

Silver that could be used for trade would best be in the form of silver rounds. That is silver coins that are manufactured by private mints and are not legal tender. These can be easily accumulated over time and stored easily and one can trade or sell any number of coins from one up to ones entire hoard if needed. These coins are commonly one ounce of silver each and easily converted into cash in the cash for an emergency or can be used as payment if cash is not otherwise generally available.

The above basically answers the question, why buy silver and, although there could, be many other reasons these, from the viewpoint of financial security, probably are the best.

Silver Buy Price

The silver buy price is that price which you pay for silver in whatever form it is the silver buy price is often referred to as the Ask price. The Bid price is the silver price at which a silver dealer is willing to buy silver from you. However, there is more to it than that.

When you buy silver you have to take into account the various other associated costs involved. You cannot just buy silver at the spot price as recorded in the market place and showed in the charts above. Other costs have to be factored in to get a true price for the silver you are buying.

Firstly there is the premium or mark up. When you buy silver from a mint they make a charge also, called a premium. This is to cover the cost of manufacture of that silver in the form you are buying it. This might be silver coins, silver bars or silver rounds for example. Then there is the packaging and, of course, they want to make some profit. On some silver coins, such as ‘theme’ coins, the premium is usually more than the value of the silver so the price of the silver is effectively doubled. All this affects the silver buy price for an individual.

If you buy from a dealer, on top of the original price for the coins or bars, the dealer then has his own expenses and profit to consider, so this also gets added as a mark up or premium to the price of the silver bullion such as silver coins or silver bars.

Because the larger the expenses of producing silver in the form of coins and bars is very much the same for larger as well as smaller coins and bars, the premium and mark ups for the larger silver bullion pieces remains very similar to the smaller pieces and so, in proportion, you pay less for the silver if you buy large silver bars.

Then there is such expenses as packaging, shipping and, if you are having large quantities, insurance costs to consider, all these need to be factored in when buying silver.

It pays then, to really shop around to find the silver that has the least premium and mark up added to the overall cost. This means that buying silver bullion in the form of the larger bars or finding ways of buying as close to the spot price as possible is the most cost effective way.

When it comes to the silver buy price, some research and study can pay off handsomely when you buy silver.

Selling Silver

We don't recommend selling silver but the time may come when selling some silver might be a necessity. So it is a good idea to look at some factors to consider when it comes to selling silver

Why you are selling silver is important. If you are selling to make a profit then of course you will want to sell for more than you paid. So how much you paid for your silver becomes an important issue. When you figure this original cost, remember to include any shipping, insurance and storage costs as they all form part of the overall cost of buying silver.

If you are selling silver to get some cash then how much silver you are selling becomes more important. It is a wise move to only sell as much silver as you need to to obtain the cash you require. This might only be a small amount so selling some coins is usually better than selling large silver bars in this case. There is little to be gained from converting all your silver into cash if you are only interested in a smaller amount of cash.

This is why it is a good idea to have a diversity of silver, some in silver rounds, some in small bars and perhaps some in larger bars. Depending upon the amount of silver you want to have and how much you can afford.

Now there are two silver prices. The silver paper price, or spot price. This is the price you see every day in stock market news. There is also the physical silver price which, these days, is a lot higher due to an almost overwhelming shortage of silver and the demand in these economic times by people to want to put their assets into precious metals such as silver and gold.

Why is the spot silver price so low one might ask, as the demand is so high? This is because the spot price is based upon a paper silver contracts which banks and financial institutions buy and sell between themselves to control the price of silver. The same applies to gold also. In both instances if the 'official' price of silver and gold are low, that will inspire some confidence in the value of the dollar and other currencies. That this idea is mistaken is evidenced by the fact that if you try to go out and buy physical gold or silver these days, the demand is high, the price is higher and the waiting time for delivery is around 4-8 weeks.

So if you selling silver you are safe in being able to get above the spot price for the silver. How much above you will get will depend on the type of silver you have to sell and to whom you sell it to. Silver coins and silver rounds are easier to sell than silver bars, particularly if the bars are very large.

When selling silver, auctions, such as eBay, can provide a fruitful avenue through which to sell silver but it is a good idea to browse the auctions first and see what people are asking and paying for silver. Generally it is higher than the spot price but it could be significantly higher in certain circumstances. When you check out the auctions, check out how many bids an item is getting. This is an indicator of the demand for that type of silver.

Selling through an established gold or silver dealer is somewhat safer and you may get above the spot silver price but probably not as much as in a private sale or one through an auction and you will also have to take into account that you may be expected to pay for the shipping. Some dealers have such a high demand for silver at the moment and such short supplies they may even pay above the spot price and even pay for the shipping. Checking the dealers terms of service also is a wise move. Selling silver to a scrap silver merchant is not recommended as they will pay you the minimum possible.

Following the above tips will help you improve your chances of getting a better price when it comes to you selling silver.