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A Guide to Buying Silver
Silver Coins, Bars, and Rounds
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Silver Coins from Great Britain, Australia, South Africa and Chad. Photo taken at one of the Investor Crate facilities circa 2019.
This is a quick down and dirty guide for first time Silver buyers
First and foremost, Silver comes in a wide variety of shapes and sizes but the most commonly found forms of Silver bullion are;
Coins – A Silver Coin denotes the fact that besides the value derived from its precious metal content, an official world Government has placed monetary value on the coin. Some coins also have what is called a numismatic value to them, in short, this covers collectability. For instance, if a coin is old, unique, in amazing condition or has a low production number (mintage) the value of the coin can exceed its monetary value as well as its Precious Metals content.
Bars – A Silver Bar can be either cast, minted or hand-poured. Silver bars are most often larger than the aforementioned coins and are valued purely based off of the weight of the precious metal composition. Though there are some rare vintage silver bars that are sought after, this is much less common than coins. Silver bars generally come with a much lower mark up than Silver coins due to the ease of manufacturing and the absence of any numismatic value.
Rounds – A Silver Round is nothing more than a round piece of Silver. Like a bar, these do not hold any numismatic value and are not produced by or on behalf of a Government. Often, manufacturers will create rounds that replicate designs of past and current coins simply for aesthetics. These are very inexpensive alternatives to buying silver coins and like silver bars are an excellent option for folks who ONLY concern themselves with obtaining as much weight as possible.
90% and 40% Silver – The options above are all comprised of .999+% of Fine Silver and is the closest thing to pure 100% Silver you can get, but recently folks have found that U.S. coins produced prior to 1965 are comprised partly of Silver. This is another low-cost option and you never know, that old piggy bank of yours might already have Silver in it!
Which type of Silver bullion would be best for me?
Depends on your strategy. Some folks purchase Silver Coins because the Silver content is of course present and the extra dollar or so they paid for each coin might pay off in the long term. For example, a 1 oz American Silver Eagle (by the U.S. Mint) manufactured this year will cost you whatever the current market price is plus $2-3 bucks. But if you were to try and purchase a 1 oz American Silver Eagle that was manufactured in 1989, you can expect to pay market price plus $10 bucks.
Now this can be argued 7 ways to Sunday and a large portion of folks who invest in precious metals do not consider this or believe this to be possible when you go to cash out. Therefore, Silver Rounds and Bars are as popular of an option as is coins.
The most popular argument against this is from the folks buying Bars and Rounds, also referred to as generic silver. Their argument is that the main objective is to buy the cheapest possible Silver bringing your cost per ounce down as far as possible. They will argue that the additional markups you incur from buying a roll of 1 oz Silver coins (meaning 20 coins) would equal an additional 1 oz of generic Silver that you could have purchased by saving on the mark up. In essence, building your silver holdings 5% more each month than with traditional coins.
Another popular strategy that acts as a sort of equalizer between these two arguments is that of ‘dollar cost averaging’ your silver investment. The theory is that the focus of precious metal investing should be a long-term one used for things like a hedge against inflation, safe haven against economic turmoil and any bumps and bruises in other markets you may be involved with.
Buying gold, silver and platinum all year long with dollar cost averaging, effectively brings the market price and associated premiums into one annual average. In other words, if the metal market is going up and down slightly all year and you are purchasing gold and silver throughout that year, you got your metal at approximately that year’s annual average price.
Example of hand-poured (top bar) and cast (bottom bars) Silver Bars. Photo taken at the Investor Crate facility in Texas circa 2018.
Where can I buy Silver?
Online retailers – The most popular way to purchase gold, silver or platinum bullion is through the various online retailers. Most of which have fast, secure and discreet shipping but we remain the one online retailer that specifically caters to folks who prefer to DCA their purchases and allow our professional trading desk to source their bullion for them. If you prefer to buy your own precious metals online every month there are plenty of excellent options besides us!
Local Coin Shop (LCS) – Your local coin shop has more to offer than old wheat penny collection books! Most local coin shops have a fair amount of Silver bullion on hand in the form of coins, rounds, bars and of course 90 and 40% silver. This is a great option if you want to avoid shipping costs but there sometimes tend to be higher premiums associated when purchasing from a LCS. This is because they have a smaller market and holding onto inventory for long periods of time can be extremely expensive.
Coin Show – Similar to your LCS, coin shows aren’t only packed with numismatic graded coins they also deal in investment grade bullion. These folks are often open to haggling, price negotiating and trading as well so mark your calendar for your local shows.
Pawnshops – If you are persistent and frequent your local pawnshop, they likely have a revolving inventory of precious metals in stock. Depending on the integrity of your local pawnshop owner you may be able to get quite the deal as they usually buy the product for under market value from folks pawning their stuff.
Online secondary market – This is something that is not recommended by most folks. The secondary market includes private sellers utilizing various classified ads, social media marketplaces and auction websites. There is a threat of fraud and high volume of counterfeit gold and silver bullion products floating around these outlets so do your due diligence on the seller profile.
Example of Gold and Silver bullion rounds from various Private Mints taken by Investor Crate staff. Date & location unknown.
Counterfeit Silver
The threat of counterfeit precious metal products is much lower than you think. This is due to a few reasons, the first being test kit availability. There are many ways to spot a fake and the best way to do this is by testing the product in question. Test kits such as chemical testing, magnet testing and handheld or stationary x-ray machines (that test purity) are readily available and inexpensive to purchase.
The second reason is counterfeiting coins is extremely illegal and comes with harsh monetary fines and lengthy jail sentences. Fun fact, the authority that oversees counterfeit money cases is your local Secret Service office. It is one of the few functions besides protecting the President they involve themselves with.
The third and final main reason is because reputable online precious metal dealers often buy directly from the manufacturer or from 1 or all 3 of the main suppliers/importers in the world. The various mints (both government and private) have extremely strict certifications and licensing they must maintain to remain in operation and to continue manufacturing bullion. Risking even one single piece of bullion that does not fully meet purity standards would certainly mean the end of that establishment.
Example of 90% Silver also commonly referred to as junk Silver or Constitutional Silver taken at the IC facility in Provo, Utah.
What if I don’t want to buy physical gold and silver?
There are several other ways to invest in the precious metals market which we detail in our 7 ways to invest in precious metals blog.
Thank you for reading our article, we hope it helped you get a quick run down of some industry terminology and the things to look for. As always, we ask you to report any inaccuracies, even if it’s a simple grammatical error to our support team. If you have any questions regarding this article or precious metals in general, you can’t reach out as well.
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This blog is intended as informational and is not to be considered investment advise. This is the authors' sole opinion. Any purchases or financial decisions should always be made after consulting with your certified financial advisor. This blog is for entertainment purposes only.
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Wonderful Blog. This silver bullion buyer guide is very informative and has accurate information. Thanks for sharing.
The lower premiums on generic silver is the best way to stack.