This article will provide an evidence-based argument for the investment in silver bullion as well as gold numismatic coins. We believe that investors willing to acquire silver as a long-term investment will profit handsomely. We also detail how an investor can profit from their silver investments after the impending bull market. We even show the best place to sell silver coins and other silver-related investments to achieve the best market reflective prices should the market suddenly spike.
Investors are always looking for the next investment opportunity, but most are suckered into the wrong markets at the wrong time. Take Bitcoin as an example, the general investment community only got interested in Bitcoin after it had already been in a bull market and was looking to correct lower. The public is excellent at jumping into a market that appears ‘exciting’ which happens to be the exact wrong time. The best investments are often made in assets that are out of favor and do not appeal to the masses. Finding a market that is depressed and that offers high investment returns can be tricky but there is one hiding in plain sight, that is, silver.
Silver has failed to keep up with inflation and still trades well below prices seen in 2011 which is over a decade ago at the time of writing. Silver is a unique asset insofar as its price drifts for months or years with no real excitement to note. But then will surge very quickly before selling off again which appears like a large spike on a price chart.
This sort of activity may not suit the everyday investor but the fundamentals for silver are changing in favor of investors – all thanks to the carbon reduction policies endorsed by world governments. Solar power production accounts for just 3.1% of global electricity generation but the Paris Climate Agreement seeks to raise this to 40% of world power generation. Given that around 20g of Silver makes up each solar panel, the demand for Silver will increase exponentially. Even if the market continues to drift and spike as it has before, it is extremely likely to do this in an uptrend.
What is most attractive about investing in silver, however, is the lack of enthusiasm about its prospects. If the market is not excited about an asset, then the asset is likely to be very cheap. The gains can be explosive if sentiment changes and with the coming drive to transition away from fossil fuels continuing, silver demand will increase which will cause its price to move higher.
Investors can profit from this opportunity by buying and holding physical silver bars and coins whilst the price is low and then selling after prices have risen. Typical silver investments feature 1oz Silver Britannia coins or bullion bars up to 1kg in weight. The issue is that many investors will not want to buy if the price of silver quickly zips higher because history shows that these prices often fizzle out. Bullion companies such as Auronum have traditionally been a good place to sell silver bars and coins during a price spike because they will pay a rate that tracks the silver spot price.
Some market analysts believe that the gold and silver markets are highly manipulated by central banks and other institutions working on behalf of governments in order to keep the price down. Should this be the case, returns will not be as high as other investments that do not have a futures market such as diamonds, art, or classic cars. A solution for this is to invest in numismatic gold coins. These are typically gold coins that are very rare and/or old. Their premiums are so high that the gold spot price has little influence over how much they are worth because of their collectability and rarity.
These investments are likely to increase with inflation because the more money in the hands of the investment community (through expansion of the money supply) the higher they can bid to buy the coins. With no futures market to depress the price of high-premium coins, this option can actually be a better hedge against inflation than bullion bars and coins.
Investing in these coins can be extremely profitable but does require a higher risk tolerance and a larger budget. For example, the Central American 8 Escudo typically trades at $30,000-50,000 depending on condition. This may seem like a lot to invest in a coin but if a holder of this beautiful coin offers it for sale 5% above what they paid for it, this could be $1,500-2,500 profit in one sale. Although a higher risk strategy than investing in silver coins, it will take a lot of silver coin trading to match the returns of a single high-end gold numismatic coin sale.
Bullion companies are excellent markets to buy and sell gold and silver bullion bars and coins which allows people with little or no knowledge of how the precious metals market works a way of getting exposure to the gold and silver price. It also guarantees that you will be able to take a profit when you want at the market price. Finding a private buyer after a surge in silver prices will be difficult as fellow investors all look to cash out of their silver investments at the same time.