News Silver as an investment: value-shredder or protection against inflation

News Silver as an investment: value-shredder or protection against inflation

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Thursday, 05.12.13 , written by Bernd Lauberg In addition to gold, silver is regarded as the most important precious metal in terms of investment. But in 2013, many investors were disappointed. So the silver price has fallen massively this year. Instead of providing inflation protection, the silver investment has substantially reduced investors’ capital over the last year. Nevertheless, demand for Silber verliert als Geldanlage an Wert

Silver as investment: besides gold, the most popular precious metal

At the end of 2012, the price of silver was $ 34 per troy ounce. By contrast, at the end of November 2013, only $ 20 was left. So, if you chose silver as an investment last year, you had to accept a significant decline in value. And last year silver was the biggest value eraser among the precious metals. According to the news agency Bloomberg, the price of silver changed by -37.1 percent compared to the previous year. Gold lost only 26.5 percent in value, platinum 9.7 percent. Only palladium, a precious metal used, for example, to decolorize gold or medical instruments, posted an increase in value of 21 percent.

Tax on silver increases in 2014

For investors who are now considering investing in silver given low silver prices, a change in law from January 1, 2014 is important. Then silver coins lose their tax privilege. Instead of the previously reduced seven percent VAT then 19 percent VAT must be paid when buying silver coins. For silver bars, the higher tax already applies. The investment in silver thus loses even more appeal with the new year.

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Currently, however, a rush on the precious metal is clearly noticeable. For example, Axel Potthast, Managing Director of Goldkontor Hamburg, and Daniel Marburger of Jewelers Trade Services Limited in London confirmed a strong increase in demand vis-à-vis manager magazin online. However, both also stress that an investment in the commodity should be made later this year to benefit from the tax privilege. Meanwhile, some silver coins are now difficult to obtain, the increased demand leads in part to supply shortages.

Silver price 2014: Development of the precious metal unclear

Meanwhile, it is questionable how the silver price – apart from changes in VAT – will develop next year. Because with the beginning of the new year, the demand is likely to decline markedly by the VAT increase. In addition, the price of silver also depends heavily on global economic development. The better the industry develops, the more silver is demanded as a raw material. If the world economy or large customers like China weaken, so does the demand and thus the price of silver. As inflation protection, silver is therefore only suitable for the long term. In the short and medium term, the precious metal is too dependent on developments on the world market.

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  • Bernd Lauberg
  • editorial staff

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