How to buy silver? Everything about investing in silver [Guide]

If you are thinking about diversifying your investment portfolio and wondering how to buy silver, this guide is just for you. However, it is worth exploring the most important information about this metal at the beginning. Silver has been used as a currency since the dawn of time. Probably it was silver, not goldwas used to make the first coins. Due to the fact that silver is more reactive than gold, it has been much more difficult to obtain pure silver than pure gold. For this reason, silver was regarded in ancient times as a more rare metal than gold. In Egypt, silver was more expensive than gold until the 15th century BC. The situation changed only after the invention of a process called cupellation, which made it possible to successfully isolate pure silver from lead, copper and zinc ores.

Silver mining and deposits in the world

Silver has the highest thermal and electrical conductivity of all metals. However, due to its susceptibility to corrosion and its high price, it is not used in the production of electrical cables. Silver does not react with clean air and clean water, but it tarnishes on contact with air contaminated with sulfur compounds.

It is estimated that silver is about 17 times more common than gold. Most of the silver mined is mixed with copper, gold, lead and zinc ores.

The greatest amount of silver is currently mined in:

• Mexico,
• Peru,
• Bolivia
• China,
• Australia,
• Chile,
• Poland.

Currently, Mexico is the largest producer of silver in the world, mining 6120 tons per year as of 2018. It is followed by Peru (4160 tonnes) and China (3570 tonnes). Poland ranks 5th in the ranking of the largest silver producers in the world. In 2018, 1470 tons of this precious metal were mined in the Rudna mine.

Peru, Bolivia and Mexico have mined silver since 1546 and are still the world's major producers of silver.

The current use of silver

In addition to being used in the production of coins and jewelry, silver is also used to make photographic films, electrical contacts, and mirrors. Colloidal silver is used in alternative medicine, but the consumption of large amounts of silver results in a disease called argyria, an irreversible change of skin color to bluish blue.

How to buy silver: Placement Silver, CFDs, ETFs and Stocks

There are many different ways that you can directly or indirectly invest in silver. Each of the solutions has its own significant advantages and disadvantages. Below we describe the most popular methods.

Placement silver

Just like gold, silver can be bought in the form of a placement - as collector coins and bars. The advantages of such an investment include physical possession of the metal outside the financial system, and thus a specific investment resistance to the financial crisis and bankruptcies of financial entities. Due to the much lower price of an ounce of silver than gold, it is easier to make small investments over time if you do not want to buy a precious metal right away, e.g. for a few or several thousand zlotys.

Disadvantages? Low liquidity when we want to sell and cash in the purchased metal and the need to regulate VAT (investment gold, unlike silver, is exempt from this tax in the EU). Another disadvantage is the storage issue. If we want to invest a lot of cash in physical silver, it will take up a lot of space.

ETF Silver

ETFswhich faithfully follow the silver exchange rate, seem to solve the problem of logistics (gold storage) and investment liquidity. We have several funds on the market that give us the opportunity to invest indirectly in silver.

[SLV] iShares Silver Trust

• • Annual fees: 0.50%
  • Issuer: Blackrock

The largest and most liquid ETF on the market with exposure to silver. The fund uses physical replication by holding silver bullion coins in London. It manages $ 10 billion in assets and is seen as the most stable of the funds. When we are new to investments, we wonder how to buy silver, it may be the easiest and best option. The annual rate of return on this fund is 22.15% and the five-year rate is 5.69%.

[SIVR] Aberdeen Standard Physical Silver Shares ETF

• • Annual fees: 0.30%
  • Issuer: Aberdeen Standard Investments

ETF with very low fees. It is an ETF that invests in physical ore, held similar to the SLV in London. He manages assets worth 500 million dollars. Profits over the last year amounted to 22.58%, and over 5 years to 5.91%.

ETFs on silver mining companies

Investing in mining companies is characterized by higher volatility than in the physical ore itself. When the price of the metal rises, corporate profits grow faster than the price of the metal itself. This is clearly visible in the financial results of the ETFs described below. However, it should be remembered that there is a bull market on the precious metals market at present. In the event of a bear market or stagnation in this sector, the profits of companies extracting ore would lose faster than the valuation of the metal itself.

[SIL] Global X Silver Miners ETF

• • Annual fees: 0.66%
  • Issuer: Mirae Asset

The second largest ETF oriented towards the silver market. Most of the mining companies in which it invests are located in Canada and Great Britain. It manages assets worth $ 820 million. For a year, the fund generated 30.53% of profit, and in five years - 17.85%. Despite managing high-value assets, it is not seen as particularly liquid.

[SILJ] ETFMG Prime Junior Silver Miners ETF

• • Annual fees: 0.69%
  • Issuer: ETFMG

The smallest fund in the silver mining segment. Its disadvantages are high cost and low liquidity. However, it offers a unique set of companies in its basket. We will find only small silver mines and mining companies, but also mainly from Canada. The annual rate of return on investment in this fund is 46.56% and the five-year rate is 21.27%.

Silver mining stocks

Another method of investing in the silver market is direct investment in shares of silver mining companies.

fresnillo [FRES]

Mexican mining giant. It is the world's largest silver miner and the second largest gold miner in terms of the amount of ore extracted. The company is listed on the LSE in Great Britain and traded in British pound. The current capitalization is £ 8,63bn and the annual rate of return is 34,91%. The company pays 1% of dividends. The chart below shows the company's chart over the last few years.

Source: trading platform xStation, XTB.

Pan American Silver [PAAS]

Canadian mining company operating on the site Mexico and Peru. It is the sixth largest miner in the world. The company is listed on the US NASDAQ and is traded in US dollars. Capitalization is $ 7,82 billion. The company pays out a dividend of 0,56%, and over the past year its value has increased by 127%.

Source: trading platform xStation, XTB.

Where to buy silver - stocks and ETFs

The table below contains a list of brokers offering trading in shares of silver mining companies, ETFs based on the mining sector, and ETFs based on silver itself.

For example on XTB Today, we can find over 3500 equity instruments and 400 ETFs, a Saxo Bank over 19 companies and 000 ETF funds.

Broker
End	Poland	Denmark
Number of exchanges on offer	16 exchanges	37 exchanges
Number of shares in the offer	approx. 3500 - shares circa 2000 - CFDs on shares	19 - shares 8 - CFDs on shares
The amount of ETF on offer	approx. 400 - ETF approx. 170 - CFD on ETF	3000 - ETF 675 - CFD on ETF
Commission	0% commission up to EUR 100 turnover / month	according to the price list
Min. Deposit	PLN 0 (recommended min. PLN 2000 or USD 500, EUR)	PLN 0 / EUR 0 / USD 0
Platform	xStation	SaxoTrader Pro Saxo Trader Go
	REVIEW	REVIEW
	CREATE AN ACCOUNT	CREATE AN ACCOUNT

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. From 72% to 89% of retail investor accounts record monetary losses as a result of trading CFDs. Think about whether you understand how CFDs work and whether you can afford the high risk of losing your money.

CFDs on Silver

Another way to invest in silver are CFDs available from every major forex broker. CFDs are leveraged - with brokers from the European Union, the maximum leverage for silver is 1:20. Below is a list of offers from selected brokers offering the best conditions for trading on silver (CFD).

Broker
End	Poland	Great Britain, Cyprus	Australia/Mauritius/Cyprus
Silver marking	SILVER	XAGUSD	XAGUSD
Min. Deposit	PLN 0 (recommended min. PLN 2000 or USD 500, EUR)	PLN 100	$ 200
Platform	xStation	MetaTrader 4, MetaTrader 5	MetaTrader 4 / 5 cTrader
	REVIEW	REVIEW	REVIEW
	CREATE AN ACCOUNT	CREATE AN ACCOUNT	CREATE AN ACCOUNT

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. From 72% to 89% of retail investor accounts record monetary losses as a result of trading CFDs. Think about whether you understand how CFDs work and whether you can afford the high risk of losing your money.

How to buy silver - choosing an instrument

How to buy silver, which is the best instrument? It all depends on our expectations, strategy, as well as the time perspective of the planned investment and investment knowledge. Below is a list of features for each type of instrument.

In the short term, CFDs perform best - they allow you to maximize your profit thanks to leverage, even when there is low volatility in the market. In addition, we have the option of betting on price drops. The downside may turn out to be swap points Due to the holding of positions for the next day, however, in the case of silver, it should be noted that depending on the direction of our position, they can be both positive and negative. ETFs allow us to diversify our silver-based portfolio to some extent, and at the same time they are characterized by high liquidity - a solution often chosen by novice investors. Those with a greater appetite for risk may choose to buy shares of mining companies - however, it is worth considering the portfolio composition carefully and not deciding on just one company.