The United States Mint recently announced there will be new reverse designs for the popular Silver and Gold Eagle bullion coins in 2021.
This article is a follow-up to our last blog which discussed the merits of owning physical gold. Both novices and long-time investors stand to benefit from a review of the basics of owning physical silver. The following list contains some, but not all, of the reasons to buy tangible silver. Some items on the list hold true for any precious metal, others are unique to silver.
Recently lawmakers in Idaho and Arizona have passed bills removing Capital Gains Taxes from transactions involving gold and silver bullion.
Silver and Gold are ranked number one and number four respectively in numerous listings of best performing assets in H1, 2016. Silver was the highest ranked asset showing a 38% price increase since the first of the year while Gold reflected the fourth highest increase in valuation this year with a 26% jump year to date. Only sugar and soybeans barely kept gold out of second place. They were the top ranked assets prior to Brexit and in the subsequent market turbulence since Brexit have retained their lofty status compared to other assets. Platinum and Palladium fared well too with 2016 gains of 16% and 6% respectively.
Following similar steps already taken in United.States the European Commission recently ordered 11 members of the European Union (EU) to enact the Bank Recovery and Resolution Directive (BRRD). These rules theoretically aim to shield taxpayers from the fall out of another banking crisis similar to the recent fiascoes in Cyprus and Greece. The BRRD mandates that if a future banking crisis develops governments will not be obligated to prop up the banks. At any rate most countries are so far in debt that they would not have sufficient assets to bail out even a small regional bank. Instead the burden will be put on creditors and depositors to bail-in their troubled bank. In simple terms legislating bank bail-ins aims to remove government responsibility when a bank fails. This news was not covered by a vast majority of mainstream media outlets despite the serious risks and ramifications for depositors and savers in the United States, throughout the EU, and internationally (i.e. Canada, New Zealand, et al).
The most frequent question asked of us here at JHCB by the public goes something like this… “What’s a better buy, silver or gold?” Our simplistic answer is a polite “We don’t really know”, or a similar non-committal response usually followed up with our question for you… “Why are you buying precious metals?” We’ve found over the years that our precious metals customers can be separated into two categories. The first group are those looking to make a long term profit buying low and hopefully selling high several years down the road. Our second category of buyers want tangible metals to act as an ‘insurance policy’ against weakening paper based assets.
Recently on more than one occasion I have come across bloggers essentially claiming that United States Mint is failing in its legal mandate to meet domestic investor demand for Silver Eagles. They argue that this especially holds true when market factors lead to significant increases in demand. Arguments range from poor management to nefarious intent to drive up Silver Eagle prices. As one of only twelve organizations worldwide that can buy Silver Eagles directly from the U.S. Mint, Jack Hunt Coin Broker has a clear picture of both the supply and demand issues involved with Silver Eagles. There are numerous reasons, that work individually and/or in conjunction that sometimes affects Silver Eagle supply. Consider the following:
Reprinted courtesy of The Silver Institute
(Washington D.C. – January 28, 2016) Silver is prized primarily for its dual role as a monetary asset as well as an important industrial metal utilized in a wide-range of existing and growing applications. Factors driving the silver market include supply and demand fundamentals, global economic performance, geopolitical issues, interest rates, currency fluctuations and investor sentiment, among others. Against this backdrop, the Silver Institute offers the following thoughts on this year’s silver market trends.