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How to Buy Silver and Become a Savvy Precious Metals Investor?

TD SECURITIES

How to Buy Silver and Become a Savvy Precious Metals Investor?

AUG 2023

Many savvy Canadian investors use physical silver to grow and protect their investment portfolios. These investors often use precious metals such as silver coins and bars to help protect their purchasing power and wealth during economic downturns and fiat devaluations1.

Silver is not just a potential hedge against inflation or an instrument to weather difficult times. Long-term silver bullion investors benefited from a return of over 320% from 2004 until the end of 20228.

The purpose of this guide is to help you learn how to incorporate silver bullion in a diversified investment portfolio effectively and with confidence.

With a fraction of the size of the gold market, silver is a commodity that has shown it can increase in price by over 150% in less than a year (August 2010 - April 2011)2.

Beyond price action analysis, here are some additional reasons why savvy silver bullion investors store some of their wealth in this precious metal:

  • Industrial demand for silver is expected to rise by 4% in 2023 to a new record high as its use in 5G devices and solar panel technologies continues to increase1.
  • Silver has been used as both a currency and a store of value for thousands of years.
  • The current gold-silver ratio (87.18 March 2023) is near its all-time high dating back to the 1970s3.
  • The silver supply deficit is expected to persist in the coming years as industrial and investment demand continues to increase6.
  • Silver is often more accessible to a wider range of retail investors due to its lower cost per ounce when compared with gold.

We wrote this silver bullion investment guide because we understand that a prosperous future is important to you. You may start from the beginning or navigate to one of the topics below:



There are a number of silver investment options in Canada.

You may purchase physical silver bullion products in the form of coins, bars, and rounds. Investment-grade silver precious metals contain a minimum purity of 99.5% silver, distinguishing them from many lower-grade collectibles.

Silver bullion products are often purchased online or in person from trusted dealers across Canada. TD is a reputable silver bullion products dealer that allows Canadians to buy silver online, at a local TD branch or at one of the TD Foreign Exchange Centres.

Other silver investment options include:

  • Silver E-Certificates. (TD Wealth offers this option)
  • You could setup a TD Secure Storage account. This will allow you to purchase physical silver products from anywhere and use TD to store your investments in a secure vault.
  • Silver futures contracts allow you to wager on the rising or falling price of silver.
  • Silver ETFs that own physical silver, such as the iShares Silver Trust (SLV).
  • Silver Exchange-Traded Receipts (ETRs).
  • Silver Company Shares. (i.e., Pan American Silver)
  • Mutual Funds with exposure to companies that are involved in silver exploration, mining, and production.

Silver bullion products are physical silver coins, bars and rounds with a minimum purity of 99.5%.

The 1oz. Silver Maple Leaf Coin (2023) is an example of a popular silver bullion product that contains 99.99% fine silver. The same amount (1 oz) and purity level (99.99%) of silver are available in bar form. The 1 oz. TD Silver Bar is popular among TD customers.

Silver bullion products are available in many different weights or sizes. They often range from a fraction of an ounce, like the 1/2 oz. TD Silver Round to products that weigh several kilograms, like the 100 oz. Royal Canadian Mint Silver Bar.

Some silver investors prefer to accumulate the 1 to 5 oz. products over the course of a year, while others favour the 10 to 100-ounce sizes.

A silver investor who is looking to purchase 500 ounces may choose to go with five 100-ounce bars or a single Silver Maple Leaf Monster Box, which contains 500 pieces of 1 oz. Silver Maple Leaf coins.

Silver is a unique commodity with a rich history as a form of legal tender for thousands of years. You should consider the following reasons for investing in physical silver:

  • Industrial demand for silver continues to grow6, which puts pressure on silver supply7.
  • Silver has been used for thousands of years as a legal tender and a store of value that has never defaulted.
  • Silver is a finite tangible asset that can often retain more value during economic turmoil, while other promissory financial instruments experience higher depreciation9.
  • When you own physical silver, you do not depend on a third party to honour its contractual obligations, as is the case with many other investments.
  • Physical silver is a hard asset that is not susceptible to cybercrimes like many modern digital assets.

In Canada, you may buy authentic silver precious metals from various types of bullion dealers:

  • Small independent dealers (some only sell online and do not have a physical store)
  • The Canadian Mint (online or two boutique locations in Ottawa and Winnipeg)
  • A major Canadian Bank such as TD (buy online, order at your local TD branch or at a TD Foreign Exchange Centre)

Before you decide which dealer to buy from, you should consider your storage options.

Many savvy Canadian investors diversify their portfolios with silver bullion through a major Canadian bank. Here are the benefits if you choose to invest through TD:

  • You will have peace of mind that you are investing in silver bullion from a regulated and respected major financial institution with over 1000 branches across Canada.
  • Your comfort and privacy is our priority when you visit your local TD Bank branch to place a silver bullion order through a teller.
  • Silver E-Certificates. (TD Wealth offers this option)
  • You can place a silver bullion order online, at your local branch or purchase in-person at one of the 12 TD Foreign Exchange Centres across Canada, with inventory on hand.
  • Selling your silver bullion products back to TD Bank is an easy process (a few simple clicks if you store with TD). You could also make an appointment at your local TD Branch if you wish to sell some of your self-stored inventory.
  • TD also offers a silver bullion storage option to store your bullion investments in a secure vault.
  • Compared to many small bullion dealers, TD has the proper IT infrastructure to ensure your personal information is safe and highly secure.
  • You can purchase silver bullion products using your existing TD account.

Investors with a higher risk tolerance may choose to take physical delivery of their silver bullion investments and store them somewhere inside their home, such as:

  • A hidden safe secured to the floor.
  • Under their mattress or bed.
  • Inside a wall.

You may want to avoid the risks associated with taking physical delivery of your silver bullion investments, including:

  • Theft from burglars or family members who have access to your home.
  • An increasing supply of silver will occupy more space and will be difficult to hide.
  • Evacuating your silver bullion supply during a fire or flood may be impossible.
  • Silver may get damaged if not stored in a cool and dry environment with low humidity.

Some investors use Secure Storage to store their silver bullion investments in a high-security vault. This gives them confidence and peace of mind when investing in precious metals.

If you choose to store with a 3rd party, ensure the institution is credible with a long proven history of running its business with a high degree of integrity.

What are the benefits of storing your silver bullion with a trusted financial institution like TD?

  • Your silver bullion investment will be stored safely in a high-security professional bullion vault.
  • The silver will be allocated, meaning you will be the legal owner, and TD will act as your investment custodian.
  • Take delivery of your silver coins or bars at your local TD brand.
  • Sell back your silver to TD with a few clicks online within your Secure Storage account.
  • Your silver bullion bars and coins will be fully insured10.

Verifying the authenticity of your silver bullion bars and coins is especially important when purchasing from a small 3rd party dealer instead of a trusted financial institution.

Here are a few standard tests you can perform:

  • Check your silver coins thickness, diameter, and weight against their published specifications.
  • Check the unique engravings on your silver coin or bar to see if it matches the marks from the mint where it was produced.
  • If you place an ice cube on top of your silver bullion product, the ice should start melting immediately
  • Authentic silver will make a ping sound for 1-2 seconds when tapped with another metal.

Silver Maple Leaf coins dated 2015 and later include The Royal Canadian Mint’s Bullion DNA technology as a cutting-edge visual authentication method.

TD Precious Metals leverages its close partnership with the Royal Canadian Mint and other major mints worldwide when sourcing silver bullion products directly from these mints. We understand that investors like yourself rely on these safeguards for peace of mind that your hard-earned wealth will be preserved.

Silver bullion products must contain a minimum of 99.5% pure silver to be considered investment grade.

As an example, the 1 oz. TD Silver Bar contains 99.99% silver. It is labelled as .9999 and sometimes referred to as “four nines” fine, which means there are 9999 parts pure silver per ten thousand parts metal in the bar.

The silver spot price is the current price of one troy ounce of silver for immediate delivery. A troy ounce equals roughly 31.1035 grams.

The Silver Price in Canada page offers insights into the spot price of silver today, along with how the price has trended historically.

The silver bullion market is very liquid, meaning it’s easy to sell to certified bullion dealers. If you purchase and store your bullion investments with Secure Storage, selling back to TD is just a few clicks away.

TD Canada Trust customers can sell their precious metals at any TD Branch. TD offers competitive pricing based on live market rates for silver.

After reading this silver bullion investment guide, we hope you are well on your way to becoming a savvy investor who understands the value of silver precious metals within the commodities asset class.

Leverage the insights from this guide when buying silver with confidence from a trusted silver bullion retailer. Consider browsing the high-purity investment-grade silver bullion products offered by TD Precious Metals.



Sources:

  1. https://www.silverinstitute.org/wp-content/uploads/2023/04/World-Silver-Survey-2023.pdf
  2. https://www.wsj.com/articles/silver-vs-gold-how-the-two-metals-compare-as-investments-11596899825
  3. https://www.longtermtrends.net/gold-silver-ratio/
  4. https://books.google.ca/books?id=nUtzJnjAic0C&newbks=1&newbks_redir=0&lpg=PA218&dq=gold+silver+ratio+roman+empire&pg=PA218&redir_esc=y#v=onepage&q&f=false
  5. https://www.silverinstitute.org/wp-content/uploads/2022/04/Metals-FocusWWS2022Launch.pdf
  6. https://www.silverinstitute.org/global-silver-demand-rising-new-high-2022/
  7. https://www.silverinstitute.org/silver-market-may-face-economic-headwinds-2023/#:~:text=The%20silver%20market%20transitioned%20to,will%20still%20be%20exceptionally%20high
  8. Silver Spot Price – TD Precious Metals - Set chart range to MAX to view historical prices used in calculation.
  9. Investigating the sustainability of the global silver supply, reserves, stocks in society and market price using different approaches https://www.sciencedirect.com/science/article/pii/S0921344913002747
  10. We insure your precious metals holdings up to replacement value. This is not CDIC insurance.
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