Silver as an Investment
First the Bad News
Investment gold is exempt from VAT, for further information about investment gold please see our "What is Investment Gold" page. Silver however is not exempt from VAT. Many people ask us why not. A better question would be "Why should it be?". Almost everything in the UK and EU is subject to VAT, although there are many exceptions. Perhaps because investment gold is now exempt, people think that all other metals such as silver, platinum, and palladium should also be exempt. Sadly this is not the case.
Because of this, we do not normally recommend silver as an investment, preferring gold, but in exceptional circumstances (when the gold:silver ratio is high), we would consider silver to be a better investment bet than gold.
See Silver Can be a Good Investment.
Some Good News
We do deal in silver coins and silver bullion bars. As you are now looking at our "Tax Free Gold" website, you wouldn't expect to find silver here, but you can find silver coins at our original website.
Secondhand Silver Coins
We also get a small number of second-hand silver coins, both collectors' coins and bullion coins, although we get far more demand for them than we can supply. This also applies to silver bars, but even more so. Most second-hand goods can be resold under a special scheme whereby the only VAT payable is on the dealers margin, and therefore almost negligible.
Investment Silver Coin Bags
We can now supply modest quantities of investment silver coin bags.
These are made up of old silver coins, usually UK coins from the 1920 to 1946 period. These were composed of an alloy containing 50% pure silver. We can supply them in sealed 10 kilo bags. Each bag contains a minimum 10 kilos gross weight of silver coins, and therefore contains 5 kilos of pure silver. Most of these coins will be very worn, and have no collectors value. Because these are dealt with under the "secondhand" scheme, there is no VAT to pay on them *
We can offer these investment bags at prices very close to the value of the intrinsic silver content.
We pay a small amount of VAT based on our margin, but no VAT is added to our quoted selling prices.
Silver Prices & Potential
Many of our gold coin investors are also convinced that silver is too cheap. Certainly it has in 1974 been as high as about $47 to $50 per ounce, and if were ever to regain those price levels, there would be substantial profits to be made. Whether silver will hit such high prices again, we do not know.
Gold Silver Price Ratio
When the first coins were made over 2,500 years ago in ancient Greece, the ratio of gold to silver was generally between 10:1 and 13.5:1, depending on the relative proximity of gold or silver mines. In the 1930's and 1940's the ratio reached 90:1 or higher, and in 1991 it peaked at about 98:1, although we have seen one source which claims over 100:1 peak. Other sources state that the gold silver ratio is no longer relevant in today's markets. We believe it is a worthwhile measure, but would stress that it is difficult if not impossible to state what the ratio "should" be.
Historic Minimum Maximum & Mean Gold Silver Ratios 1970 - 2007
Summary of annualised monthly statistics.
2006 Gold Silver Price Ratio Table
2007 Gold Silver Price Ratio Table
2008 Gold Silver Price Ratio Table
2009 Gold Silver Price Ratio Table
2010 Gold Silver Price Ratio Table
2011 Gold Silver Price Ratio Table
Highest Historical Silver Bullion Price & Lowest Recent Silver Price
The all-time high price for silver was hit on 18th January 1980 at $49.45 (£21.65) per troy ounce fuelled by Nelson Bunker Hunt's cornering of the market.
Silver then hit a post Bunker Hunt low of $3.54750 or £1.83250 per ounce on 25th February 1991.
In late 2010, silver has broken through a 30 year high of $30 per ounce.
British One Ounce Silver Britannia
One Kilo Silver Bar