Silver is an investment for those who want the security of an inflation hedge with more of an edge toward growth than gold can provide. With a greater potential upside than gold and the confidence of investors during recessions and periods of high inflation, silver is a great buy.
For Canadians, buying precious metals means making investments in a commodity priced in U.S. dollars. Not only will the price of bullion change depending on the spot, but also on the exchange rate of the Canadian dollar. That puts a lot of impetus on Canadian investors to find ways to save.
#1 Know the Spot Price
The best thing you can do for your investments is knowing the spot price of silver before you make your purchase. The spot is a kind of theoretical price – at least for retail investors – at which the major banks and mining companies trade. Premiums cover the additional costs of getting silver to you, but there are plenty of ways to save or find more competitive rates.
#2 Buy When the US Dollar Dips
Since silver is priced in USD, buy silver quickly when the Canadian dollar is worth more relatively. Keep a close eye on the exchange rate to find a good time to buy. Be aware that when the U.S. dollar loses relative value to all currencies, gold and silver prices creep upward. This is due to a combination of factors, a major one being increased demand from non-U.S. investors.
#3 Buy Higher Volumes
When you buy more silver in a single transaction, dealers save money and pass those savings along to you. There are two ways you can increase the volume of silver you buy:
- Buy bigger weight silver bars, which are available in sizes such as 5 oz., 10 oz., 100 oz., and 1 kg.
- Buy stacks of silver coins
This way you can reduce the cost per ounce.
#4 Buy Silver Online
Going online is by far the best way to buy silver bullion at a competitive price. There are a few advantages to buying online:
- Prices are updated more frequently to reflect spot prices and market changes
- Lower dealer overhead costs translate into lower premiums-above-spot
- You can compare the costs of products, i.e., bars vs. coins or even coins from different mints
- Comparing spot prices to the price of silver products makes the premiums transparent
#5 Don’t Use Your Credit Card
Credit cards come with high transaction fees – usually a percentage of the total purchase. Bullion dealers often operate on slim margins to provide competitive prices – as close to spot as possible. If the credit card company charges them 3.5% on $1,000 of silver, that cuts into their prices. It also takes the merchant longer to process the transaction, when they want to remain highly liquid to move on favorable gold and silver prices themselves.
Paying via any method that reduces transaction fees for the merchant, such as cheque, wire transfer, or even Bitcoin, is often incentivized with steep discounts. Choose the right payment method to save more.
Saving on silver helps you improve your ROI. Get more from your investments and pay attention to the price you pay for silver.