Buying Silver Bullion

    Published: 06-16-2009
    Views: 10,690
    Michael Maroney, Vice President at Monex Deposit Company, talks about buying silver bullion.

    Michael Maroney: Hi! My name is Michael Maroney. I am the Vice President at Monex Deposit Company and we are discussing how to buy gold and sliver.

    So let's talk about sliver bullion. Individual investors may purchase sliver as a monitory metal to protect against inflation, to protect against geopolitical uncertainty and to protect against any sort of catastrophic event within the financial system.

    Sliver bullion bars come in many different sizes. The most accepted bar is the one thousand ounce sliver bar. This is what we call a good delivery bar. Some people call it the industrial bar. A one thousand once sliver bar can weigh up to 10% more than one thousand ounces or 10% less than one thousand ounces and of course if you purchase a bar that's less you will receive money back and if you purchase a bar that's more than one thousand ounces then you would have to pay the additional price per ounce based on your original purchase.

    Silver also comes in one hundred ounce bars, ten ounce bars and one ounce bars. These bars will trade with a little bit of a premium above the one thousand ounce bar. The one hundred ounce bar is exactly one hundred ounces and a lot of investors prefer this bar because it's very easy to stack, very easy to hold and actually very easy to transport.

    In order to receive the best possible price per ounce, of course you would buy the bar with the lowest premium and that bar would be the one thousand ounce bar. If you were to take delivery of the one thousand ounce bar obviously one of the pit falls would be if you do decide to sell five hundred ounces you would not be able to cut that bar in half.

    The hundred ounce bar doesn't trade at a extraordinarily high premium normally about a one or two percent premium above the one thousand ounce bar and obviously it is much more convenient. The ten ounce bar and the one ounce bar do trade at fairly high premiums, but if individual investors are interested in these bars typically they are interested in them because they wish to hold on to them and may be use them as a decorative piece or paper weight.

    When you decide to purchase sliver bars, it is always in your best interest to stick to a well recognized refiner. Most dealers will require an essay as far as when you do decide to sell it back. That's why it's always important to deal with a reputable dealer and potentially have this type of arrangement in place before you make your purchase or your sale.

    Sliver bullion is a reportable commodity unlike the sliver coins. When you do sell silver bullion back the IRS requires that a 1099 is in place and the proceeds of the sale are the reported directly to the IRS. So it is absolutely essential for the individual investor to make sure they save their purchase price and their sell price because that will be required to be put on their tax return.

    There you have it, now you have a better understanding of sliver bullion.