Rated Excellent on trustpilot-logo-2 with 700+ reviews

The 2023 Silver Investment Ultimate Guide

Picture of BBS Team

BBS Team



Are you unsure about how and where to buy silver? Do you want to learn why buying silver is a great way to build your assets? In this guide, we’ll provide information about investing in silver, its industrial and commercial applications, its advantages, and some factors to consider. We will also cover key tips for investing in silver in 2023.

1. Introduction

Investors concerned about the stock market’s unpredictability and volatility may look to diversify their portfolios. One option to consider is purchasing silver.

In 2022, The Silver Institute reported a record-breaking total global silver demand of 1.242 billion ounces. Looking to 2023, demand for silver is expected to remain strong as the world economy continues its recovery from the pandemic.

Silver has always been considered valuable due to its rarity, malleability, and conductivity. Recently, the demand for silver has increased, partly due to the growing interest in using silver bars and bullion coins to build wealth.

Notice: Investing in commodities like silver, gold, or the stock market comes with inherent risks that could result in the loss of your invested capital. It’s important to keep in mind that there’s no guarantee that you’ll receive any or all of your initial investment back.

2. Industrial and Commercial Applications

Silver has a variety of industrial and commercial applications as it has a long history of value and utility. Silver can be found in almost everything ranging from computers, phones, electronics, and jewellery to vehicles and many other industrial uses. 

Due to its distinctive qualities, Silver is very difficult to find a replacement for. For example, silver has been used in medicine for its antiseptic properties for centuries. Silver is also used in medical devices and supplies to fight off germs and prevent infection. Similarly, water purifiers often contain silver to prevent bacteria from building up. 

According to The Royal Mint, “Less than 10% of the gold mined is used in industry, more than 50% of silver is destined for industrial use.”

3. Advantages of Investing in Silver

There are several advantages that investing in silver offers; let’s explore them below.

1. Hedge Against Inflation

Silver is considered an increasingly popular investment option to hedge against inflation. This is due in part to its long-term value compared to other currencies. 

For thousands of years, silver has been a valuable commodity for trading. The price of silver has fluctuated, but it has increased rapidly since 1999 due to a significant shortage of silver.

Silver’s value is not tied to any government or currency, making it an attractive asset that can help protect investors from inflation. With that being said, a large part of silver is traded for industrial purposes; it is linked and affected by various factors such as supply and demand and geopolitics.

2. Affordability Compared to Gold

As silver is less expensive than gold, platinum, and palladium, more people are able to begin investing in precious metals by choosing silver as an affordable alternative. Silver is a great option for investors who are looking to diversify their portfolio with a precious metal that is affordable and has the potential for long-term growth.

Since silver is highly liquid and has a lower cost per ounce when compared to gold, it can be an attractive investment option. The London Bullion Market Association (LMBA) sets the silver benchmark price daily in the UK. It’s administered by ICE Benchmark Administration Limited.

3. Less Premium Compared to Silver Coins

Silver is called “poor man’s gold” because it is less expensive than other precious metals. Silver is highly underestimated despite its value, making it a great asset that will likely generate returns in the future.

When it comes to silver, silver bars have lower premiums than silver coins because making coins involves intricate designs, which increases labour and machining costs.

Here’s a comparison table that will better help you understand the premium difference between silver coins vs. bars.

Weight Silver Coin Premium Silver Bars Premium 

1 ounce 25.6% – 34.85% 7%

10 ounces 25.6% – 40% 6%

Buying silver bars instead of silver coins would be wise since you can get more bars for the same price as one coin. Typically, a 10 oz silver bar costs as low as $292.90, whereas a 10 oz silver coin costs at least $323.19. 

4. Easy to Store 

Similarly, silver bars are more convenient to store than coins as they can be easily stacked as stored in a vault. Also, as you acquire more ounces of silver, keeping bars becomes more manageable than storing the same coins. They also appreciate better than silver coins. 

In addition, silver bars have the advantages of being easy to transport, having high marketability, being discreet, and having long-term durability. When you buy from reputable refiners, you can choose your storage options too. They can be sold for a considerable profit when their value increases while boasting better premiums than silver coins. 

5. Diversify the Investment Portfolio

A diverse portfolio offers greater protection from the risks of market volatility over time. Diversifying investments among different asset classes, whether stocks, bonds, silver, or other precious metals, helps spread out the risk of loss if one particular asset class drops in value.

A portfolio with varying asset classes can create long-lasting wealth and better protection from market downturns.

Investing in silver can be financially advantageous due to the limited and volatile nature of the market. However, numerous options for purchasing silver bullion products can be overwhelming. It can be challenging to determine the different ways to invest in silver.

4. Different Ways to Invest in Silver

Silver can be purchased in different forms. Below are some ways to buy silver and hold it as an asset.

1. Physical Silver

Physical silver, also known as bullion, refers to tangible forms of silver. Silver often comes in the form of silver bullion bars, coins, rounds, and jewelry, which we will explain below. Investment-grade bullion usually contains silver that is 99.9% pure. The millesimal fineness system indicates the degree of purity of the silver.

Forms of physical silver:

1.1 Silver Bullion Bars

Bullion bars are rectangular blocks of silver with guaranteed purity and weight. 99.5% to 99.9% is considered pure concentrated silver. Silver bars come in various sizes and weights between 1 gram to 5 kilograms or more. They tend to be more cost-effective per ounce compared to coins and rounds. 

The main reason for purchasing silver bullion bars is to invest in their silver content. As these bars come in physical form, you may need to consider using specialized storage options such as home safes, safe deposit boxes, or secure storage facilities.

Buying or selling silver bullion bars is a straightforward and effortless process. You can do it through bullion dealers, online platforms, or precious metals exchanges because these bars are considered highly liquid assets.

There are both name-brand bars made by the government and well-known refiners as well as generic bars produced by private and smaller refineries. 

Purchasing silver bars from reputable dealers is recommended to ensure their authenticity and ease of exchange. Similarly, when selling your silver bars, consider the cost of the transaction and search for a reliable buyer.

1.2. Silver Coins and Rounds

Silver coins and rounds are also popular forms of physical silver. Silver coins are produced in many countries and are accepted as legal tender within their respective countries. Silver coins often have a high level of purity and .999 fineness. 

The designs on silver coins are usually very detailed and can include national symbols, historical figures, wildlife, or cultural themes. Each coin weighs about one troy ounce or 31.1035 grams. 

Coins can be valued higher than just their silver content if they are rare, have historical importance, are in good condition, or are in high demand by collectors. This is especially true for older or limited-edition coins. The most popular bullion coin is minted by the US Mint called the American Silver Eagle.

Silver coins should be stored to preserve their value. Keeping coins in a secure location, such as a safe or a safe deposit box at home, is important to safeguard them from theft and physical harm.

Coins have a face value, while rounds do not. While similar in appearance, silver rounds, also known as medallions, are not accepted as legal tender. Usually, private mints or refineries produce them. Silver rounds also have high purity levels.

Silver rounds are typically cheaper than government-issued silver coins because they don’t have the added cost of legal tender status or collectable value. 

Silver rounds are a cost-effective option compared to silver coins, as their content determines their value. Meaning if your main goal is to buy silver as an investment option, then the silver contents in the round will be worth more in the long run. 

2. Non-physical Silver

Silver can also be invested in through the stock market and EFTs.

2.1. Silver Exchange-Traded Funds (ETFs)

Silver Exchange-traded Funds (ETFs) are investments that allow individuals to invest in the price of silver without owning the physical metal. They are not equities or stocks but rather a fund that tracks the value of silver.

Silver ETFs are created as trusts or funds that either contain physical silver or contracts tied to the price of silver. ETFs are shares that are traded on stock exchanges just like regular stocks. These shares are usually expected to closely follow the price fluctuations of silver, taking into account any associated expenses and fees.

Investing in ETFs provides investors with greater liquidity and flexibility. Investing in a silver ETF means you don’t have to physically own or store the silver. 

Additionally, they provide a more cost-effective investment option as the cost per share is generally lower than investing in physical silver.

While investing in anything bears some risks, investors can diversify their investments to spread them across a basket of silver holdings.

2.2. Silver Mining Stocks

Investing in silver mining stocks is another option. This is when an investor purchases stocks in the companies that mine silver. You can capitalise on the increase in silver prices by buying stocks from companies that extract it.

One can invest in many silver mining companies; however, it’s essential to thoroughly research the company to mitigate any risks. The value of stocks is influenced by their management within the company, their reserves, production costs, as well as the stock market itself. 

5. Factors to Consider Before Investing in Silver

Investing in any form carries inherent risks. Individuals should carefully evaluate their financial situation and seek professional guidance before making investment decisions. Below, we’ll look at the factors to consider before investing in silver. 

1. Current Silver Market Conditions

One of the first factors to consider is the silver market itself. This is the first step in determining if the market is stable or if it is the right time to buy. 

Some market factors to consider are supply and demand, as this can affect the price of silver. Inflations and interest rates also play a role in increasing or decreasing the demand for silver. 

As silver is heavily used in industrial applications, the price of silver is also impacted by market conditions. 

2. Global Economic and Political Events

Geopolitical events, economic uncertainty, and market speculation can both negatively and positively impact the silver market. 

Liquidity can be an important factor to investors in times of economic hardships. While physical silver is considered a relatively liquid asset, it requires you to find a reputable dealer. Through EFTs, a broker can sell them for you. 

3. Silver Price Trends and Predictions

Silver prices fluctuate over time, so it can be useful to do comprehensive research before purchasing silver to better understand and compare price trends and predictions.

Similarly, when investing in silver, you’re not necessarily just investing in the silver itself but also in shipping costs, insurance, and storage. Some dealers charge free shipping on larger orders, while others charge a flat fee. 

When purchasing silver, there is a premium added to the spot price. This premium is meant to cover production costs and other associated factors. 

A spot price for silver is priced per ounce.

4. Personal Financial Goals and Risk Tolerance

Investing generally comes with its fair share of risks; therefore, thorough research is advisable, as gains or losses are not guaranteed. Speaking to a financial advisor who helps you lay out your financial goals and risk tolerance when it comes to investing can be beneficial. 

Once you have identified how much you are willing to spend and on what type of silver asset, finding a reputable seller is essential to help prevent scams or rip-offs. 

Identifying a seller who has been in business for some time and has received positive customer reviews and return policies can give you a better idea about the company you buy from. 

Some investors like to have a more hands-on approach than others. For example, physical silver requires more active management, whereas EFTs can easily be bought and sold online. 

6. Tips for Successful Silver Investing in 2023

1. Conduct Thorough Research

It’s essential to thoroughly understand investing in silver before you invest so you can clearly understand the risks and rewards. Similarly, conducting quality control on the assets you buy. 

For example, finding a reputable seller that offers .9999 purity can help you feel more at peace knowing you are purchasing quality silver. Sellers often share the weight and unique serial number of their bars. 

Additionally, ensuring that the silver bars you buy have the proper stamping and are stored and insured appropriately. It can be helpful to compare two-three dealers when considering investing in silver. 

2. Diversify within Silver Investments

Having a diverse portfolio also helps mitigate risks if there is a significant drop in value in a particular silver asset class. 

For example, silver mining stocks are tied to a company’s performance as a whole, not just the production of silver. So if there is a scandal within management that leaks, it can affect the stock price. 

3. Consult a Financial Advisor

Once you have a better understanding for yourself of the silver market, it can be beneficial to consult a financial advisor. A financial advisor has greater experience and can help you formulate a plan not just for your silver investments but all of them.

It can be confusing when you’re just starting to know exactly what to do. A highly trained professional can make a more informed decision based on expert advice. Similarly, reading guides like this or joining online communities can help you stay on top of changes within the market. 

7. Conclusion

There are many ways to diversify your investment portfolio with silver. In addition, there are many ways to diversify your silver portfolio, from physical assets like bullion bars, coins, and rounds to the stock market. 

The choice depends on the investor’s investment goals, risk tolerance, circumstances, and personal preferences. Consulting with a financial advisor can also guide the direction that best suits the individual’s needs.

Related Blogs