In short
- No one can tell you where silver’s price goes next week. You can work out whether silver suits you.
- Five questions decide it: why you want it, which form, what it costs, how it is taxed, and where it will be kept.
- In Australia, investment silver (99.9 per cent pure) as bars, wafers or bullion coins carries no GST from a dealer. Collector and proof coins can.
- Silver pays no rent or interest. What you get back depends on the price when you part with it.
The question behind the question
If you have typed “is silver a good investment”, you are probably asking two things at once. Will the price go up? And does silver belong in what I own? The first has no honest answer. The second one does, and you can reach it yourself with five questions.
1. Why do you want silver?
Start with what you want silver to do for you. People hold it for different reasons, and each one points to a different form and a different time frame.
Some want something physical they can hold, outside the banking system. Some want a part of their savings that does not depend on a company or a tenant. Some are drawn by silver’s use in industry.
Whatever your reason, write it down. It tells you how long you plan to hold, and that shapes every answer below.
2. Which form will you hold?
Silver comes in a few forms, and they are not the same thing. The table compares the main ones.
| Form | What you own | Who holds it |
|---|---|---|
| Bars and bullion coins | The metal itself | You |
| Allocated metal | Named bars, kept for you | A vault |
| Pooled metal | A share of a pool of metal | The provider |
| A fund on the exchange | Units in a fund | The fund |
Bars and bullion coins are the metal itself, and you hold them. Allocated metal means particular bars are set aside in your name in a vault. Pooled metal means you own a share of a larger store, not particular bars. A fund on the exchange means you own units in a fund that holds metal.
The difference shows up in the law. Buying bullion directly is not making a financial investment under the Corporations Act. Pooled metal may be an interest in a managed investment scheme. An allocated bar held for you under a storage arrangement is unlikely to be one. Some gold funds on the exchange are registered managed investment schemes.
3. What does it cost to get in and out?
Silver has costs that shares and property do not show the same way. The main one is the gap between a dealer’s two prices: the price to get in and the lower price to get out.
GST is the good news for bullion. In Australia, buying investment silver (99.9 per cent pure) as bars, wafers or bullion coins from a dealer carries no GST. The same is true of investment gold (99.5 per cent) and platinum (99 per cent). Collector and proof coins are not counted as investment metal, so GST can apply to them.
| What it is | GST |
|---|---|
| Silver bars and bullion coins, 99.9% | None |
| Collector and proof coins | Can apply |
Said simply: plain investment silver carries no GST, but a coin sold for its design or rarity can.
4. How is it taxed when you part with it?
When silver goes for more than you paid, the gain is usually a capital gain. If you have owned it for at least 12 months, individuals (other than foreign or temporary residents) get a 50 per cent discount on the gain, and super funds get a third off. The 50 per cent discount applies to sales before 1 July 2027. A law already passed replaces it with indexation, an adjustment for inflation, for gains from 1 July 2027 for Australian resident individuals and trusts. Whether that change applies to super funds is not yet settled.
Coins have their own tax rules as collectables; they are set out in Silver coins: bullion, proof and collector coins.
5. Where will it be kept?
Silver is bulky for its value, so storage is a real question. At home it is in your hands, but it needs a safe and the right insurance. In a vault it is kept for you, for a fee, and you want to know whether your bars are allocated to you by name.
Ask any vault three things: are my bars named to me, who checks they are there, and how do I get them back?
My view
Silver is my preferred metal. I like it because it gets used, not only stored. That’s my opinion, and you don’t have to share it or agree with it.
One easy next step
If you would like to see the bullion series in order, from what bullion is to how it is kept, the free lessons by email walk through each one in plain words. All you need is your first name and email.
Nicholas holds some of the assets discussed in this article.
Education only, not personal or financial advice.