When starting a silver investment, there are 4 major forms of silver to consider investing in:
Coins can be generic or collectible. Generic coins are often known as “rounds.” Collectible coins are often called “numismatic” coins, a hobbyist term based on the Latin word “numisma” for coin. We have many more Silver Investing Articles Now Available.
Generic coins, or rounds, are generally produced by private mints who create coins with interesting designs, but have no rarity or special value associated with them. They are commonly printed with the words “.999 Fine Silver” and “One Troy Ounce” to make the contents of the coin clear. The value of a round is based on the content of the precious metal, not for the condition or rarity of the coin.
Numismatic coins are almost always more expensive to buy than generic rounds and usually receive a premium price when you go to sell them. Like generic rounds, they often indicate the purity and weight of the metal on the coin, but unlike generic rounds, they have a perceived value to the public beyond their precious metal content. These coins are often sealed in air-tight packages and have a professional numismatic association rating associated with it.
Examples of numismatic coins include the American Eagle, and the Canadian Maple Leaf coins. Each of these coins typically demand a price 10%-20% higher than a generic coin of the same weight and quality. Some items are very rare, and demand a price that makes their precious metal content insignificant as far as their value is concerned, such as the 1804 Childs silver dollar that sold at auction for over $4 million.
In general, investors prefer generic rounds over numismatic coins. While coin dealers sell American Eagles at a premium, for example, they will often not pay the same premium when you sell the coin back to them.
Coins may be bought in bulk from large dealers, or may be purchased by the ounce in coin shops across the country. Nearly every county in the U.S. has at least one coin shop, and their inventory may contain dozens of items, or may be completely sold out in times of high investor demand.
Many investors prefer bars for their investment. They are easier to stack and store than coins, and are available in much larger weights than the typical one ounce coin. Bars are found in one ounce, five ounce, ten ounce, 100 ounce, 400 ounce, and 1000 ounce varieties in the U.S.. Bars may also be found in odd weights such as 105 troy ounces, but this would still be considered a “hundred ounce” bar. When you buy bars, you are charged for the actual weight of the bars you buy.
Certain companies manufacture bars specifically for investing such as Johnson Matthey, or Engelhard, and these bars are beautifully designed and polished for viewing. The other type of bars you will find will be a plain looking block with the weight of the bar, “.999,” and perhaps the minting company’s logo roughly stamped on it. These bars are meant more for industrial uses instead of the investor, but have basically the same value to the investor as the nicely designed and polished bars. On the open market, the “investor” bars might carry a slight premium, but for the most part, bars of equal weight carry the same value.
Bars are more rare to find in coin shops than rounds, but they are available from time to time. More likely, you will purchase bars from a large dealer over the phone or online. Popular retailers include APMEX, Bullion Direct, and The Tulving Company.
U.S. coins minted before 1965 (except nickels and pennies) contained 90% silver and about 10% copper. Back in the old days, our money represented something we could melt down and would actually be a valuable metal. From 1965 to 1971, the United States cut back on silver use to a 40% formula for coins, and after 1971 the precious metal content was gone.
Bags of 90% silver coins may also be found in coin shops or at auction on eBay. Again, there are some coins valued purely for their metal content, and some are valued because their date of issue has become rare and fall into the numismatic category. Again, investors mostly stay clear of numismatics because generic coins are easier to sell at their full potential value.
The final category of investment silver is metal that is loose. Many investors obtain items that were perhaps meant for industry, or have been packaged in unique ways. For example, recently one of the major online dealers ran out of rounds and bars, but was willing to sell silver “shot.” This was simply small ball-shaped pieces tossed into a bag. Other possibilities include wire, or sheets that were clearly meant for some industrial use. Or perhaps you have inherited some sterling dinnerware that has no collector’s value.
No matter what market it was created for, when it reaches your hands it is still valuable as an investment. Sterling contains only 92.5% of the precious metal, so it is not as valuable as the “fine” 99.9% variety, but don’t sell it in your garage sale. These items will be more difficult to sell than coins or bars, but coin shops, scrap yards, and eBay are all dependable options to receive 80%-95% of the precious metal’s market value you hold. We have many more Precious Metals Investing Articles Now Available.