Investing in physical silver

Investment in physical silver has distinctive characteristics compared to gold: very low entry price (a few francs a coin), higher performance leverage, but subject to Swiss VAT at 7.7% from purchase.

Bars vs Coins: 1kg silver bars (diluted manufacturing costs) offer the lowest premium over spot (~3–5%). 1 ounce coins (Silver Maple Leaf, Vienna Philharmoniker) have a premium of 8–15% but are more liquid and globally recognized.

Impact of VAT: If you buy 1kg of silver at CHF 994 + 7.7% VAT = CHF 1070.5, you need a ~7.7% rise just to break even. This is a structural handicap vs gold. Optimization strategies: buy via a VAT-free warehouse (Zollfreilager) or via European platforms that ship from within the EU under special regimes.

Gold/Silver Ratio as a Signal: Historically, 1 ounce of gold is bought with an average of 47 ounces of silver. When the ratio exceeds 80, silver is statistically undervalued compared to gold and represents a long-term arbitrage opportunity. In 2020, the ratio reached 125 (record) — those who bought silver that day doubled their stake in 12 months.

Storage: Silver oxidizes in air (formation of silver sulfide = blackening). Store in airtight capsules or under inert atmosphere. A kilo of silver in 1,000 one-ounce coins is bulkier than a 100,000 CHF gold bar — think about this before sizing your safe.