Bleyer Bullion is a retailer of competitively priced silver bullion bars and coins produced by London Bullion Market Association (LBMA) approved refiners. We deal in investment grade fine silver bars and coins.
Silver purchased in the UK is subject to VAT. If you are planning to make a significant silver investment then it may be worth considering purchasing plans which are not subject to VAT. Please give us a call if you would like to know more about this. Here, we will look at the current positive investment opportunity of silver but first a little background.
Silver, like other precious metals, such as gold, platinum, palladium and rhodium, may be used as an investment. For more than four thousand years, silver has been regarded as a form of money and store of value. It is only since the end of the silver standard in 1935 that silver lost its role as legal tender in many developed countries. This, after centuries of being one of two precious metals that guarded our monetary system against inflation, deflation and currency fraud, the other of course being gold. By 2009, 40% of silver was used for industrial applications.
Silver provides a unique combination of properties - conductivity and anti-bacterial being the most well known - that make it ideal for applications in industries ranging from health, medicine, electronics, communications, solar power, batteries, superconductors, computers, as well as jewellery and silverware.
“Silver helps make today’s interconnected lifestyle possible and is a vital component of virtually every motor, cell and smartphone, computer and laptop, appliance and electronic device we use. Further, silver’s antibacterial properties are finding new uses in textiles, medical instruments and hospital equipment, providing an effective tool in combating infection and bacteria,” according to Mr. DiRienzo (Executive Director of the Silver Institute)
As industry continues its wide-ranging use of silver, investors are also increasingly acquiring silver bullion, seeking the safety of the precious metal as a store of value. Investor demand for silver can be seen in the record-shattering sale of 7.5 million American Eagle Silver Bullion Coins by the U.S. Mint in January of this year. In fact, this trend has been steadily building; during the first two months of 2013 investors purchased 10.9 million American Eagle Silver Bullion Coins, up by 43 percent over the sale of the coins in the first two months of 2012.
Further, Exchange Traded Funds (ETFs) that track physical backed silver are at a record high. As of March 8, total silver ETF holdings were 653.7 Moz, up by 22 Moz from year-end 2012. “Clearly, investor demand for silver remains buoyant by any measure,” Mr. DiRienzo said. (Source: The Silver Institute)
So, is Physical Silver a current investment opportunity? Many in the market think so and their actions prove it, for example some very large investors.
"Since early 2012, JP Morgan’s stockpile has grown from less than 5 million ounces of physical silver to more than 55 million ounces of physical silver. Clearly, someone over at JP Morgan is convinced that physical silver is a great investment. But in recent times, the price of silver has actually fallen quite a bit. As I write this, it is sitting at the ridiculously low price of $15.66 an ounce. So up to this point, JP Morgan’s investment in silver has definitely not paid off. But it will pay off in a big way if we will soon be entering a time of great financial turmoil." (Michael T. Synder, Global Research)
One of the other markers that silver is building up for a strong upward correction in its value is the difference between the physical and paper market. In 2011 the ratio was 100:1. The current ratio of Physical silver available for investment versus paper certificates is around 250:1. That means if today everyone who holds SLV in their ETF funds wanted to take delivery of the Physical Silver their certificate represented, only 1 in every 250 people would receive their Physical silver. The paper with which they would be left would be worth only the price of the paper on which it was written.
"The size of the global annual silver market is equal to $5 trillion." This is from Bloomberg which has "always been a reliable source with their physical data; thus it is interesting to compare the size of the silver market as announced by Bloomberg with the size of the physical silver market. And this is where things get interesting - in a recent interview, David Morgan confirmed that the annual physical silver production is of roughly one billion ounces. With silver trading around $20 currently, this represents a $20 billion market for physical silver. So the size of the physical silver market is of $20 billion, whereas Bloomberg is mentioning $5 trillion." (Fabrice Drouin Ristori, Founder/CEO Goldbroker.com)
*Silver as of today (10/06/2015) is trading at $16.13/£10.44 an ounce, so this widens the incongruence between physical value and paper price even further.
In conclusion, all the above facts would seem to suggest that this is buying opportunity for Physical Silver (and Gold). Bleyer believe that physical precious metals are a traditional form of wealth protection to "hold long." Please browse our catalogue of Silver Bars and Silver Coins. If you enjoy our information on Silver, you may like to browse further articles on Silver, covering subjects such as demand, availability and historical price ratios to Gold etc. Here are two from our Blog Page: