Posted 10th November 2022

What is the Best Way to Buy Silver?

best way to buy silver kag

Silver has endured through centuries as a sought-after asset, first as the de facto trading currency before evolving over time to become an investment product.

In addition, the metal is now widely used in a variety of cutting-edge technologies. 

So as an individual looking to gain exposure to the silver price or looking to buy physical silver coins or bars, what can be the best ways to gain access to the market?

Different ways to invest in silver

There are a few different options for investors looking to invest in silver. The most straightforward of these is to hold the physical metal. This can be held in bar or coin form, with this highly liquid global market enabling individuals to have a clear entry and exit price around the world when the time comes to add to their holdings or sell them.

Aside from physical ownership, the last few years have seen a surge in the range of exchange-traded funds, or ETFs, available. These funds offer exposure to the silver price with the holdings backed up by an equivalent amount of the physical metal. However, buyers of an ETF don’t gain ownership of silver, but rather, shares in the fund. As well as a small administrative charge levied for running these funds, potential investors should also factor in the element of counterparty risk that these funds have in contrast to physical silver itself.

Buying shares in the miners that produce silver is another way of gaining exposure to the silver price with the fortunes of the miners often closely mirroring the relative performance of the metals they are bringing out of the ground. With some of these miners also paying a dividend, holding mining stocks has the added potential benefit of providing a return for investors.

Is silver a good investment?

Silver is exposed to the same fluctuations that impact commodities and equities markets. As such, the price can go down as well as up, as seen this year when silver dropped from about $26 an ounce in March down to below $18 an ounce at the start of September.

While silver has suffered in recent months mainly as a result of the Federal Reserve implementing a series of large interest rate hikes which has lessened the appeal of the non-yield-bearing precious metal, the longer-term outlook is more bullish. 

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This publication is for informational purposes only and is not intended to be a solicitation, offering or recommendation of any security, commodity, derivative, investment management service or advisory service and is not commodity trading advice. This publication does not intend to provide investment, tax or legal advice on either a general or specific basis