There is a lot of excited chatter at the moment that silver is set for a historic bull run, which could see prices spike dramatically to all-time highs.
Silver is overdue a bull run, its last was in 2011, when prices reached $48.70 (£38.56) per troy ounce. It might be time for gold’s often overlooked cousin to enjoy it’s time to shine in the limelight. If you are a keen silver investor, or an investor of precious metals that has never considered investing in the white metal, read on.
In this article we’ll shine a light on the key signs which are stacking up to excite silver commentators around the world, and how you can buy VAT-free silver with the Gold Bullion Company.
A rampaging silver bull run on the horizon
Activity in silver investing has seen a dramatic uptick in recent months. These movements have been led by SLV, the world’s largest silver exchange traded fund (ETF), who have purchased and deposited silver at a rate comparable to the most frenzied silver buying activity in history.
SLV have purchased so much silver (220+ million oz) over the past few months, that they’ve deposited more silver into these investment vehicles than at any other point in history. Do they know something we don’t?
Either way this massively concentrated period of purchasing silver is a possible sign of huge silver price spikes on the horizon.
Commodity markets usually see a surge in prices when vast quantities of the commodity in question are removed from the marketplace. It’s a classic supply and demand situation.
So, such a huge increase of the amount of silver bought over a short period of time should see prices rise, owing to the limited natural resource becoming less readily available.
But so far silver prices haven’t responded to all this activity. Yes, prices have rebounded from the lows of March, after silver dramatically fell to an 11-year price low of $11.772 per troy ounce. At the time of writing, the 16th of July, silver has bounced back to a healthier price of $19.21, however it’s still 65 per cent lower than its all-time price highs, and is nowhere near the heights that many commentators are speculating that it will reach.
This could mean now is the ideal time to invest, rather than waiting for prices to rise.
Key indicators
It is puzzling that the silver price has been slow to rise despite the increased activity, however this could mean that when it eventually does it could be even more dramatic with a steeper upward curve than forecast.
The Silver Institute have put their voice behind the calls for a price rise to silver. Given the rise in investment activity, the Institute which is well known for not voicing its opinion on the silver price, has felt like it has had to add its weight to the growing clamour for a rise to the precious metal’s price.
The Silver Institute has members from across the silver industry, including silver mining houses, manufacturers of silver products, bullion suppliers, refiners and wholesalers of investment products.
That their membership is drawn from such a wide field in the industry, and that they are united in calling for a rise in silver’s price, is another key indicator that a rise could be imminent.
Finally, we have to note the fact that silver currently undervalued in relation to gold. The gold:silver ratio, how much silver is needed to purchase one ounce of gold, recently fell from a decade-high of 127 to 97.8 in June. Still a high mark historically, this disparity between gold and silver could well plummet soon, making silver much more competitive with gold in the eyes of investors, and thus a tantalising investment opportunity.
In the long term, silver mines are quickly being depleted meaning silver mining could end within our lifetimes.
Maximise your investment opportunity with VAT-free silver
A major factor affecting silver investors is that silver is subject to VAT in the UK, where gold is not. Because of this investors, have to see a 20 per cent price rise before they start to make any return on their investment. This is one of the reasons those interested in physical assets have often turned to gold as an attractive investment, along with its ability to hold its value.
More investors, however, might be willing to buy silver if they were aware that it is possible to buy silver VAT-free with the Gold Bullion Company.
We offer VAT-free silver when you buy from us and keep the precious metal in a LBMA vault. So long as the silver doesn’t leave the vault, you don’t need to pay any VAT.
Your silver will be stored in a purpose-built, secured and fully insured LBMA vault situated in the UK. Your silver will remain VAT-free as long as it is not removed from the vault.
Should you wish to take delivery of your silver you can make a delivery request and we will organise a secure delivery to you subject to payment of VAT and delivery charges. If you prefer, you can keep the precious metal in the vault until you’re ready to sell, at which point you can sell back to us.
Invest before the bull run picks up speed
Silver prices could soon rise to prices that have never been seen before. Don’t wait for the bull run to pick up speed, consider your silver investment options today.
Find out more about VAT-free silver purchases
