When HMRC introduced VAT charges of 20% on purchases of silver bars and coins, they increased likelihood in the circulation of fraudulent precious metals. It’s a sad reality, but there are dishonest traders in the world that do not think twice about profiting from ill-informed buyers – so make sure you know which silver bars and coins are safe to purchase.
Despite the VAT hike, silver bullion still represents a reasonable long-term investment given the low prices and the likelihood they will double in the not-too-distant future. However, if you have been scammed and bought forged precious metals you will not get your money back when the time come to sell.
Beware of sales pitches offering rare coins with a high numismatic value. Most consumers will buy traditional silver bullion from online sources because they know the products have been purchased directly from Mints and have a certificate of authenticity.
Although rare coins will fetch more when you sell, they are generally purchased by experienced collectors who have knowledge of precious metals and their worth. The term numismatic can often be misrepresented by traders in order to demand a higher fee than the bullion is actually worth. Therefore stick to investing in mint-issued coins.
Weight in silver
The value of silver bars and coins is measured by their weight in silver per troy ounce – or 31.1 grams. Because silver coins are not expensive to purchase –currently under $20 an ounce – buy silver with a .999 fineness. If purchasing online go for a reputable dealer that have a verifiable registered office rather than private sellers advertising on eBay or Craigslist.
Reputable dealers will issue a certificate of authenticity with their bullion products. The products themselves will also feature a maker’s mark, the fineness and value of the coin. Because silver bullion is legal tender the value stated in the coin, normally £1 or £2, is not its actual worth – that is based on the weight in precious metal content and the current spot price.
The price you pay for silver bullion products is always slightly over the current spot price. This is to cover the premium charged by the dealer – typically three or four per cent. If you are charged more, look elsewhere. Online traders usually offer the lowest premium rates as they have more competition than a high-street dealer.
Bars or coins
You should take note of the type of bullion you buy. Bars easier to forge than coins as coins are minted by the government and distributed directly to traders. However, it is easier to distribute forged coins and they appear fairly frequently.
The other benefit of buying coins is that they can be sold for a higher value per weight if the coin is a special edition. The design can sometimes effect the sale price, especially if you keep the coin for many years and are able to find a collector interested in a special edition issue.
To be on the safe side do not run the risk of a scam by purchasing precious metals from an unverified source or without a certificate of authentication. For a 100% true-proof purchase visit coininvest.com today.