Bullion: low premiums, easy resale. 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
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.