Silver Bullion Investment Strategies
Silver bullion is a modern commodity that is frequently used by precious metals investors. A metal is determined to be precious if the supply of this type of metallic chemical element is rare. Precious metals that are in bulk form are known as bullion. Bullion silver can be cast into silver bars for purchase and storage. A bullion unit is valued by its mass and purity. A trusted industry reference can help to determine the purity and value of silver bullion.
Silver that is cast into bullion bars can be purchased, stored, and sold again at a later time. The price of the silver bars that have been purchased is determined by several factors. The following strategies will help a new silver investor to understand the various values used in silver bar purchases, the determining purity or quality of the metal bar, and the various methods of selling silver bullion.
Strategy One: Silver Bars
Purchasing silver bars is one method that is frequently used by modern precious metals investors. Silver bars are tangible assets that can become a hedging method against possible national monetary inflation. Economic volatility can create a more demanding market for silver bullion and other precious metals. Silver bullion has a history of appreciating over the past several years. The appreciated price of silver bullion in 2010 rose 84 percent. Silver tends to have price changes that move very quickly.
Silver bars can be purchased through local and national commodities dealers. Online purchases of silver bullion have become more common over recent years. A silver dealer can offer other services for the new silver investor that include storage facilities for the purchased silver bars and insurance for the tangible asset.
The following are several factors that should be considered when purchasing silver bars:
1. The spot price of silver should be researched. A local newspaper or an online commodities service can provide the most current cash price for this white metal. Purchasing a silver bar from a dealer may include a dealer premium for the silver bar sold.
2. Different sizes of silver bars can be purchased. Silver bars come in several sizes that include a one ounce, ten ounce, one hundred ounce, and one thousand ounce bar. The weight of a bar of silver may not calculate to exactly the number of ounces purchased. Hundred ounce bars are the most common silver bars purchased and usually weigh 6.86 pounds on a bathroom scale, for example.
3. Smaller silver bars can be more costly.
4. Buy from reputable dealers with a recognized trade name. The silver bars should have recognizable silver hallmarks.
5. The physical bars need to be stored in a safe and secure location. Banks have physical storage facilities.
6. The modern retirement plan through a Roth IRA, SEP plan, or other IRA plan can include investment grade silver bars. Larger quantities are usually better for this type of purchase. Costs per ounce can be less for larger silver bars.
Strategy Two: Silver Purity
Silver bars that are purchased as investment products are usually .999 purity. This level of purity says that other precious metals have not been used to alloy or process the silver bar. Simple tests can be performed in order to determine the genuineness and purity of the silver bar purchased, and these tests include the following:
1. Paying a price for a silver bar that is below the current price of silver can be a reason of concern. The maker of the silver bar and the weight of the bar are both important factors to research.
2. Silver bars are usually stamped by the maker with recognized hallmarks. These stamped silver bars are ready for resale later on by the owner of the bullion. A one hundred ounce bar weighs 6.86 pounds on a bathroom scale.
3. There are several silver bar makers that are better known than others. The more recognizable makers produce silver bars that are easier to sell later on.
4. An acid test can be performed in order to determine the purity of the silver bar. A silver acid test kit can be purchased that has the various tools needed to test a purchased silver bar.
5. The silver bar can be scratched on the side of the bar and the acid applied. The acid will change the color of the metal if the silver is not pure. The exact metal below the scratched area can be determined with a color chart that is provided in the silver acid test kit.
Strategy Three: Silver Cash Outs
Silver bullion can be purchased in various sizes for long term storage or for a retirement plan. There may be economic times that demand that some of the silver supply be sold. An owner of silver bars needs to know how and where to sell the silver bullion for the best profit. The following are several sources that may be used when the silver bars need to be sold:
1. An individual can purchase any of the silver bars that the investor has for sale.
2. A pawn shop may be interested in the silver bars. The pay out with a pawn shop may be lower than other sources.
3. The silver owner needs to determine how much the silver weighs before beginning to find a buyer. Silver pricing indexes are available for further pricing information.
4. Investment companies that invest in precious metals are interested in purchasing silver bars. The silver owner can contact these investment companies directly and negotiate the final selling price for the silver. The investment company will send a special packaging for the silver bars to be placed into. The bars are shipped out to the investment company, and the company mails out a check after receiving the silver bars.
5. Auction websites are available for silver owners. The silver bars can be sold through these auction houses. A picture of the bullion bars needs to be presented, and the price that is asked is put together with the silver bullion pictures. The silver can be sold at the highest bidding price or can be sold for a set predetermined price.
6. A local jewelry store may be interested in purchasing the silver bars. Local and online jewelry stores may purchase the silver to melt and use for new jewelry designs.
Silver bullion can be a profitable investment. Silver bars are used as long term retirement strategies. Silver bars have a certain spot or cash price that has a good history of increasing in price value. Silver can be purchased in several sizes, and the actual physical silver bars are stored in safe banks or other storage facilities. Silver purity is important since the value of the silver bar is determined by its weight and purity rather than its face value. There are several tests that can be used to help determine the authenticity of a silver purchase. A silver test kit can be purchased and used for this purpose. A trusted industry reference can help to determine the value and selling price of a silver bullion investment as well. Silver bars can be sold for cash if the owner needs to sell off certain numbers of the silver bars. Current economic changes have created unpredictable forecasts. A silver bars owner may need to receive a cash out payment for the silver bars. There are several reputable sources to use.