Many buyers reach out to us with the question: should I buy silver or gold, or both? This is really something you need to weigh carefully for yourself given any other investments, your financial position, risk tolerance and other relevant circumstances. The choice is obviously yours, but we can tell you more about the main differences between silver and gold. This way you can make a choice that suits you best.
SilverSilver is considered an industrial good. For that reason, physical silver is initially taxed with 21% VAT. This mainly concerns silver bars. This is unfavorable for you as a (private) investor, since individuals cannot reclaim VAT. This means you actually pay 21% more than the actual value of the silver.
If you still want to invest in silver, for example because of the lower entry value, you are better off investing in silver coins. These coins may be traded under the margin scheme, in which only the trader;s profit margin is taxed with 21% VAT. This way you pay considerably less VAT than when you opt for silver bars. Also, silver coins are more tradable because you can buy coins in smaller denominations. In addition: the market value of coins is higher than the market value of bars.
What we often see is that customers who are willing to take relatively high risk buy proportionally more silver than gold. The silver price often fluctuates more than gold and is therefore more risky. These customers often use the argument that they focus on the long term (3-5 years) and do not care what the price does in the meantime. These customers also often choose to buy their silver in several steps. This way, the risk of sharp price declines can be spread out.
Silver is currently becoming increasingly scarce mainly due to its use in industry. Silver is often found in very small amounts in electronics and is hardly recycled. Many precious metal experts who have been coming up with accurate predictions for many years are convinced that the silver price could rise 300% to 500% over the next 5 years. Virtually all commodities have risen sharply in price since 1980. However, silver is still trading below the 1980 high of $50 in 2012.
GoldInvestment gold is exempt from VAT. This means that, when investing in gold, it does not matter whether you invest on behalf of a company (business) or as a private individual, and whether you opt for bars or coins. Gold is available in many shapes and sizes, with the general rule that production costs are relatively lower for larger denominations than for smaller denominations. The larger the gold bar or coin, the lower (relatively speaking) the product cost. The difference between the purchase price and the gold price is therefore the smallest for bars of gold of high weights.
Gold is seen by our clients and many precious metal experts such as Peter schiff, Mike Maloney, Jim Rogers, Marc Faber and Eric Sprott more as a purchasing power protector. For example when inflation rises 10% the gold price also rises 10% and on balance you retain your purchasing power.
You will probably not only base your choice for the precious metal type on the price and VAT. Of course, in addition to VAT, there are many more reasons to choose to invest in silver, gold or a mix. For example, think of the weight, the entry value (a lower budget is needed for silver to be able to start investing), the course of the silver and gold rate, etc. We can imagine you'd like to know more about this. We recommend to check the extensive purchase guides in our Knowledge Center. In these guides we've laid out everything you need to know to make an informed choice for your investment.