What Is The Way Best to Buy Silver?
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With recent developments in the Global Financial system, this is becoming an increasingly common question:
“How best to buy silver, gold and other precious metals?”
We buy Silver (and Gold) all the time, and as much as we can afford. Buying silver can be very simple but if you’re not very careful the financial rewards can turn out a lot less than you expect.
It is crucial then, to learn how and where to buy gold or silver safely, from trusted and reputable sources, in safe and secure transactions.
However before you even start to think about where, you need to ask some more questions, like “Why” and “How”because the answers to these will guide you in finding the right source later on.
There are a myriad of confusing options and decisions in involved in deciding why, how and where best to buy your gold or silver, so how do you know what’s best for you?
We would only recommend either investing in Silver or Gold in secure allocated storage or through your own personal possession.
You need to ask yourself these basic questions:
- Do I want to actually possess the metal, or do I just want exposure to the Spot price?
- Should a premium be paid for gold or silver jewelry?
- Do I buy silver as an investment or merely to preserve my wealth?
- Do I buy silver in grams or kilograms – do I buy bullion, rounds, ingots or coins?
- Do I buy silver directly from a mint, a producer or a dealer, or do I use an “Account” (pool) for storage?
- How do I determine the price I am willing to pay for my silver?
- Do I use silver spot price or live prices from a metals exchange, dealer or the current spot rates?
Whilst silver (and gold) are tangible assets and actual physical objects, making the metals themselves extremely visible, their respective markets are secretive and “closed” to non-professional dealers, with many hazards to the unwary or new buyer.
So, initially you have two main choices: (1) physical possession or (2) third-party storage.
Taking Physical Possession
Taking physical possession means buying coins or bars and taking physical delivery to yourself. The best way to buy in this manner is in person, with cash. Otherwise you can pay over the phone, or in person with a credit card, and collect.
There are lots of reputable gold and silver bullion dealers throughout the world, do some research, find your local dealers, call them and talk about your options, and their prices. We would generally avoid pawnshops, as although this is an easy way to buy gold or silver, there is usually a significant premium charged by comparison to a reputable dealer.
We would recommend everyone have at least a little physical gold or silver bullion in their immediate possession to cover all eventualities. Like storing extra food and supplies, you never know when it may come in handy, hopefully never, but you may one day be very thankful should you need your “real money”.
Do not keep your gold or silver in a “safe deposit” box, as safe deposit boxes, are no longer safe.. Storing your coins or bullion yourself will not cost usually anything, but you must ensure it is absolutely safe, if you have it stolen it will cost you everything..
So people want to know where to buy their gold or buy silver in larger amounts, where they do not take personal physical possession.
Buying Silver: Safe Third party Storage
As with Gold, you can buy silver and have a third party store your bullion after taking physical delivery. But it is crucial that you understand and navigate governmental restrictions, customs, local law etc, which depending on where you are can be complex and you could easily and unknowingly subject your funds to unnecessary risks.
If a third party takes delivery then your silver or gold is either “encumbered” or “unencumbered”.
Encumbered means that your silver or gold is subject to “counter-party risk” which means that if your “counter party” (the other party involved in your transaction) goes bankrupt,
…you can lose your investment ! - We highly recommend avoiding counter-party risk!
Unencumbered means the Silver is subject to physical delivery at any time and therefore not subject to the financial status of your storage company, then it is only subject to performance (Market price) risk.
You need to consider applicable insurance policies, corporate governance, their audit procedures, their compliance with applicable regulations and laws and (not least) the firm’s reputation. The metals must be insured, there should polices in place (and rigorously enforced) external audits must take place on a regular basis.
We recommend only buying investment grade gold and silver bars, such as those from the London Bullion Market Association, which have a known and proven chain of integrity and custody. Only then do you know for sure that the gold or silver you’re buying is real and not a “tungsten bar plated with gold“.
With rigorous compliance to all applicable laws Bullionvault has a sterling (no pun intended) reputation in the industry with vaults in New York, London and Switzerland (with Via Mat) and full insurance covering your bullion.
Be Careful When Buying Anything Other than Physical Silver or Gold
- although there are other ways to invest in Silver or Gold, there are many pitfalls and risks for the unwary..
There are many other more complicated ways to buy silver, many of these options include some type of paper instrument such as a futures contract, warehouse receipt, etc. If you are new to buying gold and silver then we would recommend you avoid these complex instruments until you really know what you are doing.
Paper “instruments” always carry some form of counter-party risk and usually have restrictions on demanding delivery of your bullion. You never want to get involved with an asset that you do not understand nor do you not want to get taken in a scam, Ponzi scheme or other type of fraud or theft.
Many notable personalities in the Gold and Silver markets now have grave doubts about the amount of real actual Gold that is actually available to back up the paper trading instruments.
Keep the process of buying gold or buying silver simple by exchanging your cash for the bullion.