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Silver bullion coins/bars and gold bullion coins/bars coins carry low premiums (small markups over spot), making them ideal investments for silver and gold investors. Also important, bullion products are easy to sell when it comes time to liquidate. Too many investors do not think to ask about the sell side when they buy and end up with numismatic or collectible coins that present nightmares when it comes time to sell
Silver bullion recommendations
Bullion: low premiums, easy resale.
As a rule, when talking about silver bullion, we are talking about .999 fine (99.9% pure). However, bags of junk silver coins (discussed below) are also silver bullion investments, despite them being 900 fine (90% pure).
The most popular silver bullion products, and the silver bullion products recommended, are 100-oz silver bullion bars, junk silver coins, American Silver Eagles and 1-oz .999 silver rounds. These products carry low premiums, with the somewhat exception of the Silver Eagles, and each product has unique features that appeal to different investors.
- 100-oz silver bullion bars For example, 100-oz silver bars are easy to stack and store, and they are virtually indestructible. Silver bars appeal to investors who simply want hedges against inflation.
- Silver coins. Investors wanting silver in a form that could be used as money or in barter situations usually opt for circulated pre-1965 US 90% silver coins, commonly called “junk silver coins.” These coins were used as money and could be used as money again in “worst case scenarios.” (For further discussion on “worst case scenarios,” read Buying silver bullion for survival purposes.
- “Junk silver coins” is a misnomer in that coins containing significant quantities of silver are hardly junk. They are called “junk” because numismatists (coin collectors) labeled them such decades ago. The coins are valued solely for their silver content, having no added value because of their dates or mint marks.
- American Eagle Silver Bullion Coins– Yet some investors wanting silver bullion in a “money” form go with American Silver Eagle coins despite them carrying premiums usually several dollars an ounce higher that the premiums on junk silver coins. Additionally, Silver Eagles require more space for storage than junk silver coins because of their packaging.
Silver Eagles come from the US Mint in large green boxes, 25 tubes of 20 coins each, five hundred coins to a box. A Mint box of Silver Eagles is sometimes called a Silver Eagle Green Monster Box.
Silver Eagles also carry the appealing feature of having their one-ounce silver content stamped on them. That Silver Eagles are products of the US Mint also adds to their appeal.
1-oz Silver Rounds
Privately–minted 1-oz silver bullion rounds
are alternatives to Silver Eagles. Like Silver Eagles, silver rounds have their one-ounce weights stamped on them; however, silver rounds are not minted by the prestigious United States Mint. Many investors are willing to pay the higher premiums for Silver Eagles, as evidenced by the Mint having sold more than 30 million in 2009. Since their inception in 1986, more than 223 million Silver Eagles have been sold.
Another difference between Silver Eagles and 1-oz silver rounds: the packaging. The US Mint uses exquisite packaging for its Silver Eagles. Tubes that snuggly hold twenty coins are custom manufactured, with the US Mint emblem stamped on the tube caps.
Further, custom boxes are used to hold the 25 tubes. When Silver Eagles are released by the US Mint, they are “mint sealed” in their boxes of 500. Not nearly as much care is taken with silver rounds.
Some silver rounds come in tubes, but the tubes are standard, off-the-shelf tubes, and the rounds do not fit snuggly in the tubes. The rounds “jingle” a little in the tubes. Still, the standard tubes provide protection against scratching. Other silver rounds come in canvas bags, as do junk silver coins.
While tubes do provide protection against scratching, scratching is not a significant concern. Silver rounds are silver rounds, a basic silver bullion investment in a “money” form. Frankly, no one cares if they have a few scratches. This is not to say they should not be properly stored. If, for example, they are buried and become stained, they lose resale value. Although silver rounds packaged in tubes are better protected, silver rounds in tubes do not have higher resale values.
Other silver bullion products.
Other popular forms of silver bullion include 10-oz silver bars, 1-oz silver bars and old US silver dollars. Silver dollars are usually classified as pre’21 Morgans (1878 – 1904), 1921 Morgans and Peace type (192 – 1935). Silver Dollars, however, often carry big premiums because they are the most widely collected coins in the world. At times, though, circulated silver dollars carry low premiums.
Silver Maple Leafs are Canada’s official silver rounds, and they compete with the US Mint’s Silver Eagles. While Silver Eagles are .999 fine, Silver Maple Leafs are .9999 fine. The “four nines fine” may sound impressive, but there is little difference between .999 fine silver and .9999 fine silver. Millions more Silver Eagles are sold than are Silver Maple Leafs.
For the silver investors who want the smallest premiums, the Royal Canadian Mint turns out 850-oz (approx.) silver bullion bars. While the RCM 850-oz silver bars may be the cheapest silver bars, with their weights in the 55 to 60 pound range they are not suitable for all investors.
Can I buy silver from Costco?
Costco has ventured into selling gold and recently introduced silver coins, potentially altering the landscape of retail by merging investment opportunities with everyday consumerism. The convenience Costco offers in making precious metals available for purchase, like the 1 oz American Eagle Silver Coin, in packages of 20, is certainly appealing to investors seeking diversified options.
Yet, navigating Costco’s pricing dynamics for gold and silver can be perplexing. The absence of spot gold prices on their website complicates immediate price comparisons, leaving potential buyers at the mercy of Costco’s listed prices. Additionally, compared to alternatives like Walmart, Costco’s prices might appear relatively expensive, creating a noteworthy price differential that might dissuade certain buyers.
A crucial aspect to consider is Costco’s approach to gold and silver sales.
While they offer these precious metals, they lack a buyback program for gold and silver bullion, and their strict no-return policy could deter buyers concerned about liquidity or potential issues with their purchases.
Moreover, the community’s discussions around trusted online sellers reveal varying opinions. Platforms like SD Bullion and Bullion Exchanges have been suggested, but conflicting experiences regarding customer service and issue resolution highlight the need for cautious consideration when choosing an online seller.
Interestingly, the community discussions also touch upon the premium prices of certain coins, specifically the American Eagle Silver Coin, questioning the value proposition concerning its design, security features, and cost compared to other alternatives in the market. Ultimately, while Costco’s entry into precious metal sales signifies a potential shift in the retail landscape, concerns about pricing, buyback policies, and the reliability of online sellers underscore the need for thorough research and consideration before making investments through such platforms.
The retail giant has now expanded its lineup to include tubes of American Silver Eagle coins. Reports flooded online forums and social media, showcasing screenshots of successful purchases with swift fulfillment and deliveries.
In the r/Silverbugs Reddit forum, buyers excitedly shared their experiences of receiving shipments containing 2023-minted American Silver Eagle Coin tubes. This move by Costco has intrigued both shoppers and investors, who find the idea of adding investment-grade silver and gold to their shopping list alongside everyday items quite appealing.
These tubes, available for $549.99 to members, sold out within minutes of being listed on December 20, pricing each coin at a $2.99 premium over the day’s spot silver price of $24.51. This price was notably lower than the prevailing Silver Eagle premium from specialty bullion dealers, usually around $4.25 per coin.
Costco, selling precious metals exclusively to members, offers additional perks such as a 2% cash back with an Executive Membership, offsetting the cost per ounce. Utilizing rewards credit cards can further decrease premiums, with various offers providing an additional 1 to 2%.
The retailer’s decision to offer American Silver Eagles and gold bars seems strategic, aiming to engage diverse customers and introduce precious metals as a store of value. While the 1 oz gold bars attract those seeking compact and high-value investments, the American Silver Eagles’ bulk packaging caters to convenience in larger purchases.
This bold move from Costco is potentially groundbreaking, blurring the lines between retail shopping and investment, providing a platform for new investors to explore investment-grade silver. Despite mixed reactions, it positions Costco as a trailblazer in merging investment options with traditional retail. The limited availability of these coins, restricted to 2 per member, consistently leads to quick sellouts online, generating buzz among both shoppers and investors.
Premium on “junk” US silver coins has drop. Time to stack ?
In 1972, a $1,000 face value bag of “junk” US silver coins was selling for approximately $1,300 to $1,350. At that time, the price of silver averaged $1.68 per ounce, making the silver content within the bag worth $1,200. The difference between the selling price and the silver content value was a premium of around 10%. Coin premiums have shown significant volatility over the years, particularly during the 1970s when inflation concerns drove up these premiums.
However, the dynamics shifted as the price of silver surged. In January 1980, when silver reached $49 per ounce, a $1,000 face value bag of US silver coins had a silver content value of $35,000. Surprisingly, these bags were selling at a discount of 10-20% due to a surplus of silver coins entering the market, including coins that had been stored away for years. In hindsight, it became evident that high premiums were not justified, given the bags’ selling prices far exceeding their face value.
2023 Premiums Explode Higher On 90% Silver Coins
Following a severe and prolonged collapse in silver prices, interest in these coins waned, and they were commonly traded based on their silver content with minimal to no premium. A couple of decades later, the Y2K scare triggered a surge in demand for junk silver coins, with premiums spiking to 50% even though the price of silver remained unchanged in 1999. However, as Y2K fears abated, investors started selling these coins, leading to discounts once again, which made them more affordable than 100 oz. silver bullion bars.
Fast forward to today, retail investors are paying premiums of around 40% for junk US silver coins, and these premiums have been even higher recently. The appeal of these coins seems to be undeterred, with buyers willing to pay considerable premiums to own them, despite alternatives like freshly-minted US Silver Eagles carrying a 70% premium.
Is possible another collapse in junks silver coin premiums?
The question arises as to whether there might be another collapse in silver coin premiums, as seen in 1980 and 2000. Some argue that there will always be strong demand for junk US silver coins, supporting high premiums, but historical evidence suggests otherwise. The premiums have been subject to fluctuations during periods of both rising and stagnant silver prices.
Premiums on 90% silver coins have decreased, making 2024 an excellent time to consider purchasing them.
In the present market, dealers typically price their junk silver at the spot price of silver plus a premium, often ranging from Eagles still have at least a 5-6$ premium per oz for eagle, as opposed to 2-4 dollars for Junk which affects the overall cost per ounce. These coins offer an affordable entry point into the world of silver investment. For instance, a silver dime can be obtained for around $2 today, something like $3/oz premium, whereas acquiring 0.999 fine bullion-grade silver for the same price is practically impossible. It’s worth noting that a silver dime contains more silver than a one-gram bullion piece, making it a cost-effective choice.
With just $10, you can buy five silver dimes and leave with actual silver in your pocket. It’s important to understand that these coins are typically sold at a slight premium over their face value, and this premium can vary. To determine the silver content value, you can use the formula: Silver Content Value = (0.715) x (Face Value) x (Spot Price). The factor 0.715 represents the approximate percentage of silver in $1 face value of these coins.
The premiums on these coins can be perplexing when compared to brand new government-issued bullion coins, as these coins have both numismatic value and recognizable government backing. However, the high demand for junk silver coins, driven by their silver content and historical significance, continues to push their premiums to current levels, even as the price of silver remains relatively low.
Currently, silver prices and premiums are on the decline.
The high premiums on junk silver coins may seem puzzling when compared to bullion, but they are a product of strong demand, historical significance, and unique characteristics that differentiate them from newly minted government coins. Whether these premiums will experience another collapse in the future remains uncertain, but it’s evident that the market’s dynamics are influenced by both silver price movements and shifting investor sentiment.
Now is an opportune moment to consider investing in silver due to its lower prices and more affordable premiums. In my opinion, silver stacking is a wise choice for long-term wealth preservation. While the 2023 silver eagles are currently priced at about $10 above the spot price, they are still a favorable option, being 60 cents cheaper than the 2022 edition.
I’ve been a fan of silver eagles for years and own at least one from every year they’ve been minted. I usually acquire about five eagles each year, mainly for the sake of having them. However, the majority of my silver stack comes from one-time deals with bullion dealers that offer low premiums on silver rounds. For a period, I was particularly interested in State Silver quarters and managed to buy numerous rolls for under $200 on eBay, although I’ve noticed they now often exceed $225 per roll.
It’s essential to emphasize that I don’t view silver as a short-term profit-making endeavor. Rather, I see it as a means of preserving wealth over the long run. My journey into silver stacking began after selling a silver dollar I’d purchased for just $1 back in the 70s, which I sold for $40. That experience stuck with me, and I started stacking silver in 2012, inspired by the financial flexibility it offered me.
For newcomers, I’d recommend starting with junk silver or Constitutional money, followed by a few Silver Eagles and then diversifying with silver rounds. I firmly believe that silver won’t remain this affordable for much longer. In my opinion, Silver Eagles, particularly from low-mintage years, will appreciate significantly in value in the future.
Regarding premiums, the right amount to pay depends on your personal goals and the current supply and demand dynamics. Silver Eagles are currently in high demand, which drives up their premiums. The low production year in 2022 has further increased these premiums. However, premiums can fluctuate based on economic conditions, so it’s possible they may return to historical averages if the economy stabilizes.
If your focus is wealth preservation, it’s advisable to seek the lowest premium and acquire the maximum amount of silver for your money, minimizing your exposure to premium fluctuations. For me, I appreciate the aesthetics of coins like Chinese pandas, Perth lunar series, and Pamp bars, even though they carry higher premiums compared to generic rounds.
Ultimately, your decision should align with your collecting goals.
Those who view silver as an investment might prioritize low premiums, while preppers could prefer 90% or fractional silver for ease of bartering in a crisis. Your premium tolerance should align with your objectives, and it’s beneficial to establish an exit strategy if you’re considering a more investment-focused approach.
In the world of precious metal investing, minimizing premiums is a top priority for many, and a recent discussion shed light on some effective strategies. Focused primarily on UK buyers, the conversation touched on the choice between bars and bullion coins, the advantages of larger individual pieces versus bulk purchases of smaller fractions, and the wisdom of selecting silver, gold, or platinum.
Among the valuable insights shared, Canadian Maples stood out as an attractive option for striking a balance between sovereignty and reasonable premiums. Additionally, buying from Facebook groups emerged as a promising avenue, often leading to lower premiums compared to online bullion dealers.
Fluctuating nature of online bullion dealer sales.
These can be a goldmine for great deals, and it’s essential to keep an eye on them as their offerings change regularly. To facilitate this, tools like the “find bullion prices” feature prove helpful in identifying lower-priced dealers.
The community also shared positive experiences with specific dealers such as Hero Bullion, Liberty Coin on eBay, and Bold Precious Metals. These suggestions come backed by the assurance of fast shipping, secure packaging, and hassle-free transactions. In a world where the value of precious metals often hinges on the cost of acquisition, these insights provide valuable guidance for anyone seeking to maximize the efficiency of their precious metal investments.
How to invest in silver: 4 ways for investing or buying silver.
During the mid and late 2000s, when the bullish stock market was handily outperformed by gold, gold was outperformed by silver by a great margin. Asset allocators usually recommend their investors to have at least 10 percent of their investing portfolio in precious metals.
Within this 10 percent allocation, quite a few investors are seen giving preference to silver over gold, thanks to silver’s explosive potential. However, silver’s downward volatility is equally vigorous as well. There are many ways for investing in silver; however, the method of investment must be consistent with the investment goals of the individual.
Pros and Cons of Investing in Physical silver.
Purchase physical metal if you are seriously considering investing in silver. There are quite a few investment grade varieties, ranging from silver bullion minted by governments, such as Canadian Maples, U.S. Eagles, and UK Britannias to silver bars manufactured by mining and private minting firms.
These can be bought from online auctions, local shops, and also by sending mail orders to bullion dealers. Thanks to the comparatively lower silver price tag, a major investment can get one legal possession of a few tons of this metal. Therefore, it is very unlikely that moderate or large investors would allocate or channel their entire investment budget into physical silver. However, having some in the investment portfolio would give the peace of mind imperative for tackling the worst economic and financial calamities.
Despite silver bullion being highly liquefiable, purchasing physical silver is usually seen as an investment for the long term. Several investors, who are not willing to take and store huge quantities of silver and who are aware of the metal’s volatility, would prefer to make speculations on price movements happening in the short term.
The most convenient and common method to achieve this is via speculating with ETFs. These ETF funds can be managed like stock-trading, but they track silver’s price with considerable reliability. ETFs are not redeemable in silver, unless they are bought in huge quantities, and they lose their relative value to the physical metal over time. However, for shorter duration speculations, ETFs are probably the best bets for the investor.
PHYSICAL silver Over ETFs – Mike Maloney
Purchase Silver Mining Stocks.
Purchasing mining company stocks is a more convenient way of speculating silver’s price; many savvy investors prefer this method. However, there are several risks attached to purchasing mining stocks. Mining is an expensive and inherently risky enterprise, as individual mining firms are subjected to several factors that are independent of the metal’s price.
Nevertheless, silver mining firm stocks react favorably when there is an increase in silver prices. Courtesy of some research, one can identify established and reputed mining companies with an investor-friendly market position.
Silver Futures
Silver futures are not meant for amateur or first-time traders. The folks who get involved with silver futures are the ones who have some expert and deep understanding of the market, especially the silver trading industry.
The expiration period for futures is very short, usually a month. The reason why advanced traders are more suited for silver futures is because after a month or at the time of the contract expiration, the investor will lose possession of his futures, irrespective of whether he is at a loss or gain.
Expert traders would be able to handle this quite well and would be able to identify silver futures that would most likely reap benefits. Silver future is a very short-term investment and is not recommended for investors with long-term objectives.