Buying Silver in Australia

Disclaimer: Information provided does not constitute formal financial advice, see below for further details.

We were interested in diversifying into some silver, so we investigated some of the different options of buying silver in Australia.

One of the questions we need to ask ourselves when purchasing precious metals is do we want to buy physical metal and store it, or do we want to look at other ways of owning silver.

Perth Mint Online Depository

We found the Perth Mint has a savings plan that gives you a discount of 50% off the applicable transaction fee (which in this case was 1% taken down to 0.5%).

The trade of is your purchase of up to $5,000 occurs on the first working day of that month. You are meant to have the funds in your Perth Mint Depository Online account by the 25th of the prior month. This means you have less control over picking a time you think the price is best, but is meant to be for people who want to consistently add to their silver allocation each month. You can cancel the savings plan whenever you want.

Because we like low fees, there is an option of buying unallocated silver, which has no storage fees for Perth Mint Depository Online.

Perth Mint Online Depository Example Purchase

An example of a transaction, but note the prices given are not at the same time of the day.

Perth Mint Silver Spot Price when checked that day, Ask: $25.03, Bid: $24.65

Savings Plan price: $25.23/ toz (so the price appears to have dropped later in the day)

Perth Mint Silver Spot Price from Perth Mint daily price spreadsheet, Ask: $24.9, Bid: $25.28

Order value: $4,975.10

Transaction Fees: $24.88

Contract Total: $4,999.98

Price when checked at kitco.com: Bid: 24.81, Ask: 24.96

Price when checked at silverprice.org: 24.84

ETPMAG ETF price: $23.73 AUD

Physical Silver Dealers

For those looking to take care of their own silver, here are some options for places to buy physical silver in Australia.

  • Perth Mint
  • ABC Bullion

Silver ETFs

There is the Physical Silver ETF (ETPMAG).

https://www.etfsecurities.com.au/product/etpmag

The legal form is listed as "Redeemable preference share with an entitlement to metal". Note: on this page is a "Bar List" link where you can see how much metal is associated with the ETF. The ETPMAG ETF is backed by physical allocated silver held by HSBC Bank plc (the custodian). Given the history of HSBC's past transgressions, we were not as keen on using this ETF ourselves.

The ETF cannot issue new securities until new bullion has been delivered to the Custodian's vault. The silver is stored in a London, UK Vault and audited twice a year. The ETF is domiciled in Australia.

Management costs for ETPMAG at time of writing are 0.49% p.a.

Summary

These are some options we investigated for buying silver in Australia, but hope to flesh this out a bit more in the future as we learn more.

Financial Disclaimer

This information should not be considered financial advice and is based on our own research and is included only for general educational purposes. Your personal financial situation has not been taken into consideration. While investing can lead to profit, it can also lead to losing all of your original investment. Before investing, you may want to consult a certified personal financial adviser who can tailor advice to your own situation.

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