Silver stacking is a great way to invest for the future and it is also a great hobby, satisfying the inner magpie in all of us. If you are looking to get involved with silver then you may have some initial questions, which we aim to answer here. All of these have been put to us by readers in the past.
What is a spot price?
A “spot price”, often shortened to just “spot” is simply the market value of silver, or another precious metal. If you were to purchase at $2 “above spot” for instance, then this could mean you bought an ounce of silver for $18, when the market value was $16. You will very rarely find silver for less than spot price and never when trading with a major bullion dealer. It is possible when you are dealing with individual stackers though, people who might want to offload cheap silver quickly and are willing to come to a deal.
Do I need to pay VAT on silver?
Some countries charge VAT on sliver purchases, including the UK. Here it is at its highest and buyers need to pay 20% on top of the standard price. This means that even if you are lucky enough to buy at spot price, you will still be paying 1/5th more than you need to.
How do I avoid VAT on silver?
Not all countries have this. One thing you should never do though is buy overseas. Many silver stackers in this country and in others that charge high VAT buy from the US. They think that they are saving big, even with the shipping charges. However, many of these shipments are stopped and checked by customs and may be liable for VAT. Imagine paying extra for shipping, buying a high stack of silver to ensure it was an economically purchase, and then being hit with a bill from HRMC a few weeks later.
The best way to get around the VAT on silver is to buy from Germany. They do have a VAT charge on silver, but it is tiny and it won’t effect your stacking much. You will also not be charged extra by the UK customs and there are many sites out there that make a living selling silver to people in the UK.
How can I ensure I only buy legit silver?
You should always stick with reputable dealers. There are many out there to choose from and with the internet at your fingertips, research is easy. Google them, check their licenses and their awards, ask around on silver stacking forums and generally study them as much as you can to ensure that they are a reputable seller. That way you can guarantee that every ounce of silver you buy from them, whether it is a premium coin or a cheap bar, is legit.
You should also remember that just because they are at the top of Google doesn’t mean they are legit. Whilst being number 1 on many search terms is a good indicator of an experienced site, the sponsored links above this are easy to get into. You should also not assume legitimacy just because a company has a TV, magazine or newspaper advertisement. Scammers can pay for these as well, never forget that.
How should I store my silver?
Many stackers like to keep silver in their own homes. That way they can admire it on a regular basis. If stacking is a hobby as well as an investment opportunity for you, then this is probably the best way forward. Safety deposit boxes are good, but they cost money to run and if you have a relatively small stack and are planning on holding onto it for a long time, then they’re not worth it in the long run.
If you do keep your silver at home, make sure it is safe and hidden out of the way. Keep it away from prying eyes, as there have been many instances of stackers losing expensive metals to loose-fingered cleaners, friends and even family members. Make sure that it is not on display, but also make sure that you tell as few people about your stack as possible. You might think that “xyc” can be trusted, but they might not think twice about telling a friend about your hobby, and that friend might tell another friend. Before you know it all of the burglars in town have heard about your stack and are planning to take some of it for themselves.
How can I check my silver is real?
There are many ways you can do this. It all depends on the product that you have and what you are testing it for. One of the simplest things you can do is test the weight and dimension of the product. If it is a coin this works perfectly, although usually only if you have a legitimate coin to compare it to. The is because metals come in different densities, so whilst it is easy to get 1 troy ounce (or whatever the weight is) of all metals, they won’t be the same shape when you do.
You can also buy Neodymium magnets, which work perfectly. These magnets react in a very unique way when they come into contact with silver, sticking ever-so-slightly. However, these may not be ideal for testing a product that has a silver plating. More assured methods that you can use include acid tests, but these will damage your coin, which could be counterproductive. Silver is also great heat conductor, so another great way to test if your bar or coin is legit is to rest 1 ice cube on top of it, and one beside it, making sure the second one doesn’t touch. If you have real silver then thanks to the heat stored in the coin from your hand and from the room, the ice on the coin will melt much more rapidly than the ice cube next to the coin.
Will silver increase in the future?
We think so. In fact, at the time of writing we believe that silver is very low and that it will almost certainly be higher a year from now. However, do not take our advice or anyone else’s advice on this. There are many different opinions out there and none are right because no one can predict the future. Do your own research and form your own opinion before you decide to invest in silver.