Guide to Investing in Silver – Chapter 5: Investing in Silver Bars

This is chapter number 5 out of 15. Read the rest:

Read Guide to Investing in Silver – Chapter 1: Introduction
Read Guide to Investing in Silver – Chapter 2: Starting out as a Silver Investor
Read Guide to Investing in Silver – Chapter 3: Silver as an Investment Vehicle
Read Guide to Investing in Silver – Chapter 4: Methods of investing in Silver

Silver bars or ingots are well accepted as a way to invest in silver. Their uniformity in size and shape makes them easy for storage and to handle. Furthermore, they are regarded as a compact store of wealth. What this mean is that any investor can park a substantial amount of his wealth in silver without consuming a great deal of storage space. The bars that are imprinted with recognized seals are easily disposable for liquid cash. These bars comes in several sizes like 10 troy ounces, 100 troy ounces, 1000 troy ounces and odd weight retail bars.

10 Troy Ounces Bars: are extremely popular and difficult to obtain. They command a slightly higher price over the other kinds of bars. Because of their small size and weight, they are the most affordable kind of silver bars and can also act as “small change” for the bigger bars.

100 Troy Ounces Bars: weigh 6.8 lbs each and are the most popular type of bars among the retail investors. Their bigger size and uniformity makes stacking them easy as well as simple to be inventorized. The major brands include Englehard and Johnson-Matthey which are costlier than the other brands. They are sold at around a premium of 40 to 50 cents above the market price of silver. But this price actually varies according to market situations. Because of their popularity among the retail investors, they also commonly know as “investment bars”. This category of investors will normally sell their silver once the price increases as their main aim to use silver as an investment vehicle and not as a store of wealth.

1000 Troy Ounces Bars: weighing around 68lbs each, these bars have a 10% allowance with regards to their weight as they are “wholesale bars”. Thus you might end up with a lighter 908.8 troy ounce bar or a heavier 1099.6 troy ounce bar. The price is usually established on delivery. These are also known as NYMEX bars. The advantage of these bars is that they are excellent for NYMEX delivery as they can be used for delivery for a 5000 troy ounce Futures contract to the major exchange. In this respect, this kind of bar is the most liquid type for large volume transactions. For transportation, their large size facilitates their haulage as compared to those smaller size bars. The disadvantage of this size is the fact that they are not appropriate for smaller transactions as they are not easily divisible. Only large bullion dealers will be able to handle these bars. The other disadvantage is the cost incurred in transporting them if you are far away from the exchange.

Odd Weight Retail Bars: are stamped 101.46 ounces or at 51.23 ounces. They also come with a 1 kilo size bar or 23.151 ounces. They cost less and also have a wider price spread. This is because extra work is involved in determining their values as well the risk load factor for carrying unknown brands. Testing whether the kind of silver bars are genuinely silver involves a “ring test”.  You will need to bang them with a wooden spoon to see if you can hear a ringing sound. If there is such a sound, then the bar is made of silver. Those bars which are alloyed with lead will not “ring” but “thud” instead. Depending on the dealer, you can buy or sell them at spot prices. These types of bars are regarded as genuine “bullion” bars and are limited in supply. 

Read Guide to Investing in Silver – Chapter 6: Silver Coinage as an Investment
Read Guide to Investing in Silver – Chapter 7: Silver in Exchange Traded Funds (ETFs)
Read Guide to Investing in Silver – Chapter 8: Silver Mining Stocks
Read Guide to Investing in Silver – Chapter 9: Silver Mutual Funds
Read Guide to Investing in Silver – Chapter 10: Silver Futures
Read Guide to Investing in Silver – Chapter 11: Silver Certificates
Read Guide to Investing in Silver – Chapter 12: Comparison between various forms of Investment in Silver
Read Guide to Investing in Silver – Chapter 13: Investment in Silver versus Gold
Read Guide to Investing in Silver – Chapter 14: How to invest in Silver
Read Guide to Investing in Silver – Chapter 15: Conclusion