When thinking about various forms to store one’s wealth in the present economy, silver is not usually the first option for many people. This is pretty unfortunate because there is a lot of benefits to be incurred from investing in silver. It may not be at par with gold but it is not far off with a historical gold to silver ratio of 1:16. Silver is the second most consumed commodity after oil, has served as currency for over a millennium and it also has no counter-party risk. In order to successfully buy silver bullion Melbourne, here are a few things you need to know.
Spot Price and Tax implications on the price
You need to know the spot price of gold and then consider the overall implications this will have on the final cost of buying the silver. The spot price only acts as an indicator and the base to calculate the spread of the buyer. In Australia, the spot price is calculated as a derivative of the currency exchange rate between USD/AUD. When it comes to tax, you need to check to be sure whether your purchase is affected by the goods and service tax. Investment grade silver is not affected by this tax but lower grade bullion is affected. If you are after the later it makes more sense to buy them privately. There are specific rules which set the criteria of what constitutes tax free bullion which can be found here.
Make sure you have the right identification
Unless you are buying privately or for bullion less than $5000, you should be prepared for a rigorous identification process. This is a requirement by law and for transactions more than $10,000 the gold dealer has to lodge a report with Australian Transaction Reports and Analysis Centre (AUTRAC). Aside from being prepared to undergo such identification, this is a factor you can use to identify whether you are working with a ‘flyby’ business or a reputable gold dealer. Get information beforehand of any documentation you may need to provide even for online transactions.
Beware of the shipping and shipping “insurance” costs
If you are buying gold bullion over the web and not instore some traders may lure you with a low price for the bullion in their advertisements but then later charge extravagant fees for shipping or “insurance” costs. You can avoid this by insisting on knowing the shipping and “insurance” costs before purchasing to avoid hidden charges. This makes the comparison and researching on various gold dealers important both online and in store.
Storage and Insurance
As you make plans to buy silver bullion you have to ensure you have made the appropriate plans for storage. This could be in a safe deposit box at a bank, a bullion vault by a gold dealer, a safe box at home or get to the extremes of burying underground. Whatever option you choose it should be the right environment for keeping silver, secure and easily accessible when you want it. You should also make a point to provide insurance cover to your silver bullion against major risks.
Have an exit plan
Unless you are using silver bullion as a savings option, you will need to have a well thought out strategy of when to sell it or change it. You may have a price target or collecting it to reach a certain value upon which you can trade upwards for another metal such as gold.