Britannia Silver Coins vs Cast Bar: Which One Should You Buy in 2022?
Silver is a precious metal that has many uses and benefits, such as being a store of value, a hedge against inflation, a medium of exchange, and an industrial commodity. If you are interested in investing in silver, you may wonder what is the best way to buy it. Should you buy silver coins or silver bars? And if you choose coins, which ones should you go for?
In this article, we will compare two popular options for silver investors: Britannia silver coins and cast bars. We will look at their features, advantages, disadvantages, and prices to help you make an informed decision.
What are Britannia Silver Coins?
Britannia silver coins are legal tender coins issued by the Royal Mint of the United Kingdom since 1997. They feature the iconic image of Britannia, the personification of Britain, on the reverse side, and the effigy of Queen Elizabeth II on the obverse side. They have a face value of one pound sterling, but their actual value is much higher based on their silver content and market price.
Britannia silver coins are minted in four different sizes: one ounce, half-ounce, quarter-ounce, and one-tenth ounce. They are also available in proof and uncirculated versions, which have different finishes and mintages. Since 2013, Britannia silver coins have been struck in 999 fine silver, which means they contain 99.9% pure silver. Before that, they were made of 958 fine silver, which means they contained 95.8% pure silver and 4.2% copper.
What are Cast Bars?
Cast bars are silver bars that are produced by pouring molten silver into molds and then cooling them down. They have a rough and irregular appearance, with marks and imperfections on the surface. They usually have the weight, purity, and manufacturer’s logo stamped on them. Cast bars are also known as poured bars or ingots.
Cast bars come in various sizes and shapes, ranging from one ounce to 100 ounces or more. They are usually cheaper to produce than minted bars or coins, which require more machinery and labor. Cast bars are also easier to stack and store than coins, which may take up more space.
Advantages of Britannia Silver Coins
Britannia silver coins have several advantages over cast bars, such as:
- Tax efficiency: Britannia silver coins are exempt from value-added tax (VAT) and capital gains tax (CGT) in the UK and Ireland, which means you don’t have to pay any extra fees or taxes when you buy or sell them. Cast bars, on the other hand, are subject to VAT in most European countries, which can add up to 20% or more to the purchase price.
- Legal tender status: Britannia silver coins are legal tender in the UK and Ireland, which means they have a guaranteed face value and can be used as a form of payment if needed. Cast bars are not legal tender anywhere and have no nominal value apart from their silver content.
- Design and quality: Britannia silver coins have a beautiful and intricate design that showcases the history and culture of Britain. They also have a high level of quality and purity, as they are minted by the prestigious Royal Mint using advanced technology and security features. Cast bars have a simple and plain design that may not appeal to some collectors or investors.
- Liquidity and demand: Britannia silver coins are widely recognized and traded around the world, which means they have a high level of liquidity and demand. You can easily buy or sell them at any reputable dealer or online platform at competitive prices. Cast bars may not be as popular or available as coins, especially in smaller sizes or from lesser-known brands.
Disadvantages of Britannia Silver Coins
Britannia silver coins also have some disadvantages compared to cast bars, such as:
- Premium: Britannia silver coins usually have a higher premium than cast bars, which means they cost more than the spot price of silver per ounce. This is because they incur more production costs, such as minting fees, packaging costs, marketing expenses, etc. Cast bars have a lower premium than coins because they are cheaper to produce and distribute.
- Storage: Britannia silver coins may require more storage space than cast bars because they are round and bulky. You may need to buy special cases or tubes to protect them from scratches or damage. Cast bars are easier to stack and store because they are flat and rectangular.
- Variety: Britannia silver coins have a limited variety of sizes and designs compared to cast bars. They only come in four sizes (one ounce, half-ounce, quarter-ounce, and one-tenth ounce) and one design (Britannia). Cast bars have a wider range of sizes and shapes, from one ounce to 100 ounces or more, and may have different logos or motifs depending on the manufacturer.
Prices of Britannia Silver Coins and Cast Bars
The prices of Britannia silver coins and cast bars depend on several factors, such as the spot price of silver, the supply and demand of the market, the premium of the dealer, the condition and rarity of the product, etc. Therefore, they may vary from time to time and from place to place.
As of July 3, 2021, the spot price of silver was $26.34 USD per ounce or $34.36 AUD per ounce. Based on this, we can compare the prices of Britannia silver coins and cast bars from two reputable online dealers: ABC Bullion (Australia) and Suisse Gold (Europe).
ABC Bullion
ABC Bullion is a leading precious metals dealer in Australia that offers a wide range of products and services, such as bullion bars and coins, storage solutions, trading platforms, etc. Here are the prices of Britannia silver coins and cast bars from ABC Bullion as of July 3, 2021:
| Product | Size | Price (AUD) | Premium (%) |
|---|---|---|---|
| Britannia Silver Coin | 1 oz | $47.50 | 38.2 |
| Britannia Silver Coin | 1/2 oz | $27.10 | 57.4 |
| Britannia Silver Coin | 1/4 oz | $15.90 | 87.6 |
| Britannia Silver Coin | 1/10 oz | $8.70 | 146.9 |
| Cast Bar | 10 oz | $397.60 | 15.5 |
| Cast Bar | 100 oz | $3,649.00 | 5.9 |
| Cast Bar | 5 kg | $17,112.00 | 4.6 |
As you can see, Britannia silver coins have a much higher premium than cast bars from ABC Bullion, especially in smaller sizes. The premium for a one-ounce coin is 38.2%, while the premium for a 10-ounce bar is only 15.5%. The premium for a one-tenth-ounce coin is a whopping 146.9%, while the premium for a 5-kilogram bar is only 4.6%.
Suisse Gold
Suisse Gold is a leading precious metals dealer in Europe that offers a wide range of products and services, such as bullion bars and coins, vault storage, offshore delivery, etc. Here are the prices of Britannia silver coins and cast bars from Suisse Gold as of July 3, 2021:
| Product | Size | Price (EUR) | Premium (%) |
|---|---|---|---|
| Britannia Silver Coin | 1 oz | €32.25 | 35.8 |
| Britannia Silver Coin | 1/2 oz | €18.75 | 64.7 |
| Britannia Silver Coin | 1/4 oz | €10.75 | 103.7 |
| Britannia Silver Coin | 1/10 oz | €5.75 | 178.6 |
| Cast Bar | 10 oz | €269.00 | 18.8 |
| Cast Bar | 100 oz | €2,449.00 | 7.6 |
| Cast Bar | 5 kg | €11,199.00 | 6 |
Similarly, Britannia silver coins have a much higher premium than cast bars from Suisse Gold, especially in smaller sizes. The premium for a one-ounce coin is 35.8%, while the premium for a 10-ounce bar is only 18.8%. The premium for a one-tenth ounce coin is an astonishing 178.6%, while the premium for a 5-kilogram bar is only 6%.
Britannia silver coins and cast bars are both viable options for silver investors who want to diversify their portfolio and hedge against inflation or currency devaluation. However, they have different features, advantages, disadvantages, and prices that may suit different preferences and goals.
Britannia silver coins are tax-efficient, legal tender, beautifully designed, and highly liquid, but they also have a higher premium, require more storage space, and have a limited variety compared to cast bars.
Cast bars are cheaper to produce and buy, easier to stack and store, and have a wider range of sizes and shapes than coins, but they also have to pay VAT in most European countries, have no nominal value or legal tender status, and may not be as popular or available as coins.
Ultimately, the choice between Britannia silver coins and cast bars depends on your personal preference, budget, location, and investment strategy.
Disclaimer: This article is intended as an opinion piece and does not constitute financial advice. Investing in bullion carries risks, and individuals should conduct thorough research and consult with a qualified financial advisor before making any investment decisions.
Links for places to start investing now:
- https://bullionnow.com.au
- https://www.ainsliebullion.com.au
- https://www.abcbullion.com.au
- https://guardian-gold.com.au
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