from Compare Silver Prices:
The decision that is brexit came to pass in a dramatic fashion. In the aftermath, silver prices increased just 10%. While a considerable gain, perhaps not what some would have expected.
Polling stations closed. Results came in. Prime Minister David Cameron said the future of the country rests on the outcome. The President of France said the future of the European Union depends on the outcome.
The vote could not have been any closer. ATV News first reported a 75% probability of Brexit in the early morning hours in the UK Friday. “It’s the end of Britain,” some proclaimed.
“I hope this victory brings down this failed project,” Nigel Farage, a vocal proponent of leaving the EU, said. “And may it be our Independence Day.”
The reality is the British people have voted to leave the European Union.
David Cameron said the British people made a clear decision. “I think the country requires fresh leadership.” He stepped down.
Safe haven assets skyrocketed. Mainstream press covered gold, which has increased in price. They ignored silver.
What’s Next For Silver Prices After Brexit?
“The main thing about Brexit and the rush into gold, and why silver is left behind, is that in the UK there’s a value added tax on silver,” David Morgan, of www.TheMorganReport.com, told CSP. “That’s why most people in the UK buy gold. They don’t want to pay the VAT on top of standard dealer margins. That’s why you haven’t seen people move into silver in the UK.”
VAT is in effect throughout European Union for silver purchases in most cases. In the UK, VAT is 20%. Gold has not been subject to VAT for awhile.
That despite the United Kingdom used silver as money. It used to be on the silver standard – hence, the pound sterling. The silver standard goes back to the Middle Ages. English currency was mostly silver until 1344, when a gold coin was put into circulation. Silver was the legal basis for the sterling until 1816, when Great Britain opted for a gold standard.
Silver bullion investors, to be sure, don’t pay VAT if they hold the silver in an accredited vault in an accredited account, though VAT is paid upon delivery.
There are other ways around VAT. One can buy silver coins through companies that acquire the silver coins through a VAT compliant process whereby investors don’t pay the tax directly. Others focus on buying coins minted by national mints, such as the Royal Mint.
Morgan acknowledges the increasing silver and gold prices will continue over the long term. “I checked with primary dealers to see if there is spillover in the US from Brexit and there was not.”
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