How Much is a Silver Bar Worth

If you’re considering investing in precious metals, you may wonder: How much is a silver bar worth? There are many ways to invest in silver, including bars and coins, stocks, mutual funds, exchange-traded funds and futures contracts. 

However, one of the most popular methods for investors is buying silver bars. Understanding the value of silver bars can help you decide whether to add silver to your investment portfolio. 

Historical Value of Silver Bars

Silver has been used in commerce for centuries. Throughout history, emperors, kings and merchants have used silver bars as a means of exchange or to back paper currency, a practice widely observed by governments. 

In the 1800s, many countries, including the United States, moved from a silver standard to a gold standard to support currency. In 1971, U.S. central banks stopped using precious metals to back currency. In response, investors could use its store of value to diversify portfolios and hedge against inflation.

The value of silver bars is tied to silver’s spot price, commonly traded in U.S. dollars per ounce. Dealers use the spot price to value silver bars based on weight.

Historically, silver prices have risen as uncertainty and inflation have grown. Silver has shown a strong correlation with gold, having a similarly finite supply. However, silver tends to be more volatile because of its ties to industrial uses.

While the gold-to-silver ratio hovers around 76, it has a historical average ratio of 16. Silver’s recent high ratio to gold indicates that it might be undervalued.

Types of Silver Bars

When considering silver bars as an investment, it’s good to understand the two different types and sizes available on the market. Silver bars are either poured (cast) or minted (pressed).

As the name suggests, poured silver bars are heated to the melting point and poured into a mold. The bar, known as an ingot, is then cooled to solidify it. Then, it’s stamped with the refiner's name, the purity of the silver, and the bar’s weight. 

Pouring is an expensive process made more efficient by producing bars larger than 100 ounces for banks, governments and investment funds. These bars typically do not have a refined, shiny finish.

Minted silver bars are not melted. Instead, large, blank pieces of silver are pressed or stamped in a machine. A die etches company logos and designs into the silver, and the end product has a glossy finish. The minting process can churn out many silver bars of 100 ounces or less, and it can do so efficiently and at a lower cost than pouring.

The different production methods attract different investors. Poured silver bars may have air bubbles, ripples and uneven surfaces. Bars of the same weight may not be the same height. 

These features can attract investors. However, poured silver bars are more expensive. Minted bars are uniform in height with a shiny finish. They may be preferred because the production method calls for a smaller premium above the spot price. They’re also easy to stack.

How to Calculate the Value of Silver Bars

So, how much is a silver bar worth? To calculate its value, you multiply the silver spot price — the price it is trading for on the stock market — by the bar’s weight (e.g., forty ounces). Then, add or subtract the premium. 

The market price can be impacted by supply and demand. The premium is a percentage of the spot price based on the cost of refining, production and logistics.

The weight and purity of the silver can also impact the premium. Silver bars come in different weights and purities. Typically, the weights are one ounce, five ounces, 10 ounces and 100 ounces. Silver bars with 99.9% purity are considered investment grade.

Silver bars are usually stamped with the manufacturer’s logo, the type of metal, weight and purity. However, you can also test the authenticity of your silver bars by checking for these characteristics:

• Magnet: Silver has minimal magnetism.
• Sound: There should be a clear ring when metal taps it.
• Tarnish: A dark coating should form from contact with airborne sulfur.
• X-ray fluorescence: This can determine your bars’ composition.

Using a magnet to check your silver bars can damage them. A reputable dealer can determine your bars’ silver content in seconds using X-ray fluorescence.

Factors Influencing the Value of Silver Bars

As an investor, you may prefer to keep your silver bar investment for a shorter or longer period. These factors might influence your decisions on buying and selling:

• Spot price
• Premium costs
• Weight
• Grade
• Market dynamics
• Bar condition

Several other factors drive the spot price to keep an eye on: supply and demand, the price of scrap silver, technology, economic trends, geopolitical shifts, inflation, interest rates, the strength of the dollar and gold prices.

How to Store Silver Bars

Owning silver bars allows you to interact with a tangible investment. However, it’s important to properly store your silver bars to preserve their value. Thus, you should factor the cost of safe storage into your investment.

Over time, silver can tarnish from sulfur in the air. However, its luster can be restored with a silver cleaner, so consider wrapping your bars in a soft cloth before stowing them away.

You have several silver bar storage options, depending on your situation. You can keep your silver bars in a safe inside your house, place them in a bank safety deposit box, or use professional storage facilities.

Why Invest in Silver Bars?

Buying and selling silver bars requires research, planning and a long-term investment approach. Holding silver bars can diversify your investment portfolio and guard against inflation. However, there are a few disadvantages: price volatility, illiquidity and storage.

The varying weights of silver bars allow for efficient management of large amounts of silver. The uniform sizes also make storing the bars easier through stacking.

When looking for silver bars, seek those from a company accredited by the London Bullion Market Association (LBMA), an international trade organization that promotes trust and transparency. Silver bars from LBMA-accredited manufacturers can help verify quality and authenticity.

Where to Buy / Sell Silver Bars

If you want to invest in or sell silver bars, consider seeking reputable precious metal dealers in your city or online.

Consider Investing in Silver Bars

If you’re ready to invest in silver bars, you’ll need to consider numerous factors to determine their worth. Consider the historical value of silver, the two types of silver bars, and how to calculate their value. You’ll also need to account for the factors that influence the price and value of silver bars.

Frequently Asked Questions