Allocating at least a portion of your portfolio to silver could be a wise move, especially since it’s a tangible inflation hedge. It has never been easier to add physical silver to your portfolio thanks to partners like Birch Gold Group, Advantage Gold, Red Rock Secured and American Hartford Gold.
These partners make it easy to trade silver bars because of their knowledgeable help desk staff and intuitive websites. It’s wise to know the fundamentals of silver bars prior to trading them.
In this article, you can learn more about how much a silver bar is worth and other key facts, including how to invest in silver bars via IRAs.
How Does the Worth of a Silver Bar Vary?
Silver bars are different from coins since they’re produced by private mints, not the government. Unlike coins, they don’t have specific dates or country brands on them. Silver bars aren’t used as traditional legal tender like a coin might be.
The value of silver bars depends on a few factors like purity of the silver, its weight in ounces (oz) and mint. Silver bars come in 1 oz, 5 oz and 100 oz sizes with the largest sizes having the most value. Silver bars with a greater concentration of silver also have a greater value. The spot price of silver in mid-January 2023 is $23.91, so a 100 oz silver bar made of 99% silver would have a base price of approximately $2,391. Silver prices can vary because of factors like broker transaction fees and intangible factors like a mint’s brand.
Minted bars are also more valuable than cast ones since they have more intricate packaging and branding. Cast bars are created by pouring liquid silver in molds, giving them a more uniform appearance.
Variations in the Price of Silver Bars
Several factors can impact the price of silver bars.
1. The spot price of silver
The spot price of silver can change because of supply and demand, the global economy and technological breakthroughs.
2. Condition of the silver bar
It’s important to work with a dealer that stores new silver bars with the highest standards. You want to ensure that your silver bars are stored in a sealed package at room temperature.
3. Special designs
Mints can design each bar with special logos or brands. Some of these logos celebrate special anniversaries like the founding of the mint. These silver bars have a higher value and can be deemed collectibles.
What is Silver Used for?
Silver has many purposes in a wide variety of industries like healthcare, dentistry, jewelry, batteries and mirrors. It’s especially valuable since it doesn’t corrode, and it can be very malleable. As a result, it’s also a great conductor of electricity, which is why it's commonly found in batteries.
Silver is also used in car engines to prevent them from overheating and running smoothly. It’s also an essential lubricant, making it a key ingredient in most cars.
Materials in a Silver Bar
Silver bars can be made with 99% silver or sterling silver. Since very few pure silver mines exist worldwide, most silver is produced as a by-product of gold, lead and other base metal mining. Therefore, silver bars are 99% pure with 1% traces of lead and other minor metals. These silver bars are marked with “999” to denote their purity.
Sterling silver is made of 92.5% silver and 7.5% other metals, including copper and zinc to improve durability.
Since sterling silver is more durable, it’s often found in jewelry and kitchen silverware. Sterling silver is cheaper than pure silver, but it tarnishes more easily since it contains copper and zinc. Sterling silver items are marked with “925” to show their purity status.
Best Alternate Forms of Silver to Invest In
Silver Coins
Investing in silver coins can be a more user-friendly way to invest in physical silver since they’re easier to store. Silver coins usually come in oz and fractional sizes like ½ oz, which make them even easier to trade.
Silver ETFs
Silver ETFs invest in futures contracts that trade silver. With these ETFs, you can profit if the price of silver goes up or down. You can also trade these ETFs with traditional brokers like Fidelity, commission free. Since they’re ETFs, you can also use advanced strategies like trading on margin or short selling.
Top Platforms that Sell Silver Bars and Other Precious Metals
Before trading silver bars or other precious metals, ensure your company has these traits:
1. Positive Customer Reviews
Ideally, your prospective broker should have positive business reviews on sites like BBB, TrustPilot and Yelp. It should also have quick response times and many communication channels (phone, chat, email and social media).
2. Helpful Content
The best brokers will have free, helpful content like blogs, videos, FAQ sections and U.S-based help desks. The help desk can guide you through the process of trading silver bars.
Some partners like Red Rock Secured offer free ebooks to new investors. It offers a free eBook with insider information on buying gold and silver and finding IRS loopholes to legally protect your account from increased regulation.
3. Reasonable Fees
Regardless of the investment, fees can really add up. Ensure that your broker has reasonable fees for extra benefits like storage and insurance. Partners like Birch Gold Group, Red Rock Secured and American Hartford Gold also offer transit insurance, which insures your silver bars en route to your address.
- Best For:Gold IRAs, New and Experienced Investorssecurely through American Hartford Gold's website
How to Buy Silver Bars in a Precious Metals IRA
The beauty of a precious metals IRA is that you can use them to invest in silver bars with various tax advantages. You can defer taxes on the growth with a precious metals IRA or even earn tax-free gains if you select a Roth precious metals IRA.
IRAs can also facilitate passing down your silver bars to your heirs while paying the least amount in estate taxes possible. However, confirm those specific details with your financial planner.
By law, you must have a third-party custodian hold your physical silver bars that are in an IRA. Many brokers are also registered as custodians and can properly manage your silver bars held in an IRA. They can also show you which silver bars and coins are IRS-approved to be held in an IRA.
Are Silver Bars Worth Buying?
Silver bars can be a good way to allocate your wealth towards a time-tested inflation hedge. You can also use precious metals IRAs to minimize your tax burden while trading silver bars. Since silver bars come in various sizes, you can start off with smaller sizes and work your way up to larger ones.
Silver bars have a few drawbacks like not paying dividends and being more volatile. Mining company stocks can pay dividends which compound over time in addition to capital gains. The silver market is also smaller than the gold market, which can result in large price swings.
Frequently Asked Questions
Can I touch my silver bars?
Yes, you can touch silver bars but be sure to use light gloves or hand sanitizers before handling your silver. Smudges, tarnishes and small scratches can reduce the value of your silver bars.
Is it better to invest in silver bars or coins?
Silver coins are lighter and easier to trade. Silver bars have lower production costs, which gives investors a better chance of making higher monetary gains.
Does Warren Buffett invest in silver?
Buffett doesn’t invest in gold, but his company, Berkshire Hathaway has invested almost $1 billion into silver. He prefers silver since it has more uses than gold.