Silver bars: a popular, flexible investment format
Many different denominations make silver bars affordable for every budget. They offer many advantages over silver coins and gold products.
Besides gold bars, silver bars are another popular form of investment, and have the distinct advantage of a somewhat lower purchase price for each individual unit. Experts too are noticing an increased demand for silver whenever the market price of gold rises: The price of silver seems to generally track gold whilst still keeping a discreet distance apart. This is particularly evident in times of international crisis. This shows that, alongside gold, silver is also a precious metal much sought after at times of crisis. It also represents a secure and independent investment.
Silver bars offer investors the choice of a convenient standard format which is available on the market in many different denominations from one gram to approximately 31 kilograms (a good delivery silver bar of approximately 1,000 ounces). Such flexibility makes this type of investment accessible and affordable for every investor, because it can be adapted to suit the needs of any existing budget, and at any time. The value of a silver ingot is primarily governed by its weight. All transactions are, of course, directly dependent on the silver price, which is published daily on the global precious metal exchanges. Silver is traded in US dollars per one troy ounce (31.1034768 g). The exchange rate for Swiss francs is also published daily across all the major financial markets.
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History and production of silver bars
Cast ingots made of precious metals such as gold, bronze, copper, tin or silver are known from archaeological finds dating back as far as the second millennium BC. At that time, there was little standardisation, so these early ingots had irregular, open-pore surfaces rather than the classic rectangular shape we see with the precious metal bars available today. Then as now, these ingots were a much sought-after exchange item which was easy to transport and could be readily melted down at any time.
Once paper currency was introduced in Europe at the end of the 13th century, bars of precious metal gradually lost their importance as a means of direct payment. However, they were still used as a means of security to cover paper financial assets up until World War II. Indeed, they are still kept in certain central bank vaults to this day as a hedge against inflation, because of their more or less guaranteed intrinsic value. These are mostly large accredited (good delivery) industrial silver bars weighing somewhere around 23 to 34 kilograms.
Today, most gold and silver bars are primarily produced for the investment market, and sometimes in more manageable units for collectors too. A distinction is always made between pressed and cast bars. Sizes of up to around 100 grams are usually pressed, which is why they are also called minted bars. This minting or pressing technique is essentially the same as that used to produce coins, and thus ensures the final product has a fine, glossy surface. However, for weights of 250 grams and upwards, silver bars are more likely to be cast, which is why they tend to have a coarser, matt surface and often have rounded edges.
LBMA standardisation ensures widespread acceptance
In 1979, a new standard was introduced to bring some clarity to the diverse range of silver bars on the market for the benefit of investors. This certification specifies the physical properties of the precious metal, such as the weight and dimensions. Only a small deviation is ever allowed from the quoted measurements, with a maximum tolerance of no more than 15 – 40 mm. This standard was drafted by the famous London Bullion Market Association (LBMA), whose history goes back to 1919. Approved bars must comply with their “Good Delivery Standard” specification (GD). For instance, bars must have a fineness of at least 999/1000 parts of silver, and must bear a cast or pressed value, as well as an assay stamp giving details of the refiner, and finally a serial number. GD silver bars weigh from 23.3 kg (750 oz) to 34.2 kg (1100 oz) and are considered to be fully tradable across all international bullion markets.
LBMA maintains precious metal lists from refiners and manufacturers who can be relied upon to produce bankable silver bars. However, to maintain the ongoing financial credibility of their product, these approved producers and refineries all have to undergo regular tests by an independent commission. Many banks today limit their trading to investment bars from accredited and certified manufacturers with GDL status.
- Learn more about the LBMA and the London Bullion Market.
Other popular and well-known silver bars
It’s not just good delivery bars that make an attractive silver investment. Small investors in particular generally prefer silver bars of 100, 250 or 1000 grams, and 31.103 grams of silver per troy ounce. In addition, you can also purchase what are known as silver coin bars, which have an embossed face value and thus actually have the same status as coins. These coin bars often have attractive motifs, such as the Dragon Rectangular (AUS), Cook Islands (AUS) or Athenian Owl (NIU).
Below is a list of international manufacturers of well-known silver bars, most of whom are LBMA certified.
| Manufacturer | City | Country |
|---|---|---|
|
Argor-Heraeus SA |
Mendrisio |
Switzerland |
|
Britannia Refinded Metals Ltd. |
Gravesdend |
England |
|
Cendres Métaux |
Biel |
Switzerland |
|
Heimerle + Meule GmbH |
Pforzheim |
Germany |
|
Heraeus Holding GmbH |
Hanau |
Germany |
|
Metalor SA |
Neuchâtel |
Switzerland |
|
Pamp SA |
Castel San Pietro |
Switzerland |
|
Rand Refinery Ltd. |
Germinston |
South Africa |
|
Royal Canadian Mint |
Ottawa |
Canada |
|
Schöne Edelmetaal BV |
Amsterdam |
Netherlands |
|
Umicore AG & Co.KG |
Brussels |
Belgium |
|
Valcambi |
Balerna |
Switzerland |
|
Western Australian / Perth Mint |
Perth |
Australia |
As of June 2020
Advantages and disadvantages of silver bars:
The bar shape offers many advantages over a collection of silver coins. Classic silver bars are much less expensive to produce than coins, which is why they can then be offered at cheaper prices. This gives investors a greater amount of silver in return for their investable assets. The serial number stamped on each bar clearly identifies the individual units, which can always be traced at any time. In addition, modern ingot products are often supplied along with a certificate, which confirms their origin and authenticity. This makes it much easier for investors to sell their white metal as and when required. Silver bars are widely available and highly visible on today’s markets. They are sold through classic precious metal trading networks (both bricks-and-mortar and online), as well as through banks, and can always be resold later in the same way.
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The only potential drawback is VAT, because unlike gold investment products, silver is still subject to VAT. In Switzerland, the rate is 8.1 percent, which must be added to the net price. And if investors wish to buy in Germany, they have to add an even higher rate of 19 percent. But potential investors should not despair, because there are ways to save all of this VAT element.
Purchase silver bars ex-VAT and store them duty-free
Because the purchase of silver bars normally attracts VAT, it is worth storing them in a duty-free warehouse in Switzerland, such as the facility offered by the private storage provider Swiss Gold Safe. White precious metals are held in allocated & segregated storage, which means customers can be sure they retain ownership of the original pieces they purchased and stored – in contrast to the usual collective storage arrangements. Purchasing silver bars is straightforward using the Swiss specialist trading company Echtgeld AG. Anyone seeking professional advice in-house is recommended to use the over-the-counter service, and the company also have a website presence which is very suitable for customers from abroad.
A customer-friendly strategic collaboration with Echtgeld means that purchased silver bars can be delivered direct to Swiss Gold Safe’s duty-free warehouse. This arrangement not only saves on security transport, it also means the customer will not be liable for VAT on the purchase. Silver bars can be sold in the same way – even without any physical movement of goods. This collaboration gives customers of both companies the opportunity to access valuable cross-industry expertise from two different business sectors. The article ‘Background knowledge about precious metal bars and coins’ includes more details about physical precious metals and is sure to be of great interest to novice investors.
An overview of the features of silver bars:
- Silver bars to suit every budget are available in many attractive denominations from 1 gram to 34 kilograms.
- Your purchase price is based on the current silver price.
- LBMA certification guarantees investors receive standardised, internationally tradable, Good Delivery silver bars.
- Get more silver for your money: bars are cheaper than coins.
- Duty-free warehouses enable VAT-free purchase and storage.
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