This article is all about silver, how to buy silver, the best ways to buy silver, and what silver coins and bars to buy. It also has information on silver exchange traded funds, silver stocks, silver futures and other silver products and services.
A Short History of Silver
Silver has been in use as a currency for hundreds of years. The first currency of the modern Greek state was called the Phoenix. Originally issued in 1828 in the form of a silver coin equal in value to the French Franc, its official denomination was the lepton.
In Germany in the late 15th century one finds silver coins being used called the Talers. This word has been translated from the German into many other languages including English, resulting in the words daler, daaler and eventually dollar. So the word dollar is not unique to the western world.
Many other examples of these early silver coins can still be found in museums, private collections and perhaps, who knows, many more may be found on future treasure hunts down the track.
Silver currency has many distinct advantages not the least of which is it’s value. Around 1980 there was about 2.5 to 3 billion ounces of silver mined and a surplus above 300 million ounces yet silver was able to break above $50 an ounce at that time!!!
Today above ground stockpiles of silver have dwindled to almost nothing and warehouse inventories are down to 100 million ounces, of which two thirds are already spoken for. Yet silver is absolutely essential for industry, being used in many things from keyboards to phones, refrigerators and thousands of other manufactured goods. Also silver production is mostly a by product of other mining such as lead, gold and zinc for example. There is little actual silver being mined and silver consumption has been outstripping supply for over 14 years.
Unlike gold which, for the most part, is retained in circulation, silver gets used up with the amount of silver left dwindling.
This, coupled with the decline in the value of the dollar and other fiscal currencies around the world, means that silver is seen as an excellent hedge against a lessening of asset value.
This has resulted in the value of silver being on a steady increase for some years.
In the silver market both coins and bars are extremely liquid. In a melt down situation where silver might be at a premium, coins and bars would be easier to barter with.
Buy Silver Coins
To buy silver coins is easy these days. There are many mints and dealers around the world eager for you to buy their silver coins. Coins can be purchased from your local coin shop up to the big international dealers and mints around the world. In addition the internet has made it much easier to buy silver coins from virtually anywhere in the world.
There are many different types of silver coins. Each have their own unique benefits which are favorites with various coin collectors.
Some of the most popular coins for collectors have been the American Silver Eagle, the Morgan, The Canadian Maple and the British Silver Sovereign.
Other collectors like to specialize in rare silver coins, Proof silver coins as well as Brilliant Uncirculated, Silver Rounds, Commemorative and the increasingly popular Piedfort range of silver coins.
But silver coins are not just for the collectors and enthusiasts. They are an excellent value for people in all walks of life as a way of building and preserving assets
Silver coins are easy to collect, relatively inexpensive and expected to increase in value over the coming years as the world silver shortage continues.
Interestingly silver coins, such as the American Silver Eagle, may be used as funding in an IRA (Individual Retirement Account).
Silver Coin Prices
Silver coin value is basically determined by four factors, rarity, grade, quality and popularity.
Rare coins have the highest value of course and the value can be higher than the quantity of silver in the coin. The rarity can be due to the limited number of coins struck by the mint as well as number of coins available or in circulation.
Grade of silver coins can be important. For collectors, proof is the best grade of all and Brilliant Uncirculated the next best. One should not really consider lesser grades unless one is specializing in rare and antique silver coins. The quality of the coin should be as stated for that grade of course
As far as collecting for investment is concerned, then one looks for different factors. Proof coins would not be the best option in this case as the premium is too high and getting a return on your investment on resale is not guaranteed. Proofs are more for coin collectors and enthusiasts than for silver investors. Certain types of coins such as silver rounds would be a far better option for silver investment.
The popularity and the price of many coins depends on which coins collectors like to collect of course. This is really a matter of personal taste. For silver investors it is more a case of, "what coins are going to appreciate in value over the coming years?"
Numismatic Silver Coins
While numismatists are often thought of as students or collectors of coins the term actually covers a wider range to include the actual study and history of coins in general.
Numismatic silver coins, however, could be understood to include all silver coins from the past and this would include such rare silver coins, such as early Morgans, the Double Merk of 1578 issued by Charles the II of England, the 30-shilling coin between 1567 and 1571 struck by James VI of Scotland and the Greek Phoenix silver coin issued in 1828, equivalent at that time to the French Franc.
But several misnomers abound when it comes to numismatic coins however. Not the least of which is dealers labeling some coins numismatic when they are not, thereby justifying being able to sell coins such as the US$20 for example, for a higher premium than if it were not called a numismatic coin. This on the basis that if the government decided to recall all gold coins from circulation (as in 1933), numismatic coins would be exempt. This is quite incorrect as the exemption at that time was vague and generalized. quote, "gold coins having a recognized special value to collectors of rare and unusual coins" (The presidential proclamation of 4/5/1933). US$20 coins are definitely not rare or of special value to collectors.
Some dealers will tell you that the Law in the US defines US$20 gold pieces as 'numismatic" coins. This is totally incorrect and there is actually no law in statute or any regulation to say so.
Together with other factors, such as dealers trying to redefine the definition of numismatic coins has resulted in much false information about sliver coins in the US.
The crunch comes when the time comes to sell and many a silver investor has received a shock to find they did not get the price they expected and, in fact, generally got under spot price for the coin.
A good way to find out what kind of dealer you are dealing with is to ask the dealer the question, "If I was to sell you this coin what would you pay me for it?"
There is little, if any, value for the silver investor to hold numismatic coins, better to convert them into bullion coins
Buy Silver Dollars
To buy silver dollars is one of the main purposes of many coin collectors.
These vary with the year of mintage as well as the condition of the coin. Silver Morgan dollar coins, for example, range from just a few dollars to many thousands depending on the condition and the rarity.
There are also unusual silver coins available from other countries that have a high value. Early Britannia and European coins from the last century are good examples.
Buy Silver American Eagles
To buy American Silver Eagles is probably one of the most popular activities of silver coin collectors and investors.
The U.S. Silver Eagle was authorized by Congress in 1985 and first minted in 1986. All U.S. Silver Eagles are pure .999 fine silver, and are considered the finest silver coins ever minted in the U.S Each coin contains one troy ounce of pure silver and measures 1.598" (or 40.6mm) in diameter with a thickness of .117" or 2.98mm. They are impressively large and substantial coins and are America's only official investment grade silver bullion coins.
Along side the Canadian Maple, many consider them to be among the most beautiful coins minted anywhere in the world.
The obverse design is based on the U.S. "Walking Liberty" half dollar, originally minted in 1916 and designed by the German-immigrant sculptor Adolph Alexander Weinman, the designer of the famous U.S. "Mercury" dime, also introduced in 1916. The reverse side of the coin features a bald eagle and shield, with 13 stars, representing the 13 original American colonies, positioned above the eagle's head. The U.S. Silver Eagle is the official silver bullion coin of the US and is backed by the US government for content and weight. The U.S. Silver Eagle is minted in the U.S. Mint's West Point, New York facility, with a legal tender U.S. coin with a face value of one U.S. Dollar.
U.S. Silver Eagles are an affordable, cost-efficient way to kickstart a silver investment. One can purchase one or a few at a time without breaking the bank and they are easy to store, transport and, importantly, easy to sell.
Morgan Silver Dollar
The Morgan silver dollar is one of the most popular US silver dollar in existence, not only for the silver content or the beauty of the coin but also for the fascinating history of how it came about.
First minted in 1878, the Morgan silver dollar was actually the product of America’s largest silver strike, which occurred at the Comstock Lode in northern Nevada in the mid-1870s. Although it never gained any broad appeal while it was being struck during 1878 to 1904 and again in 1921, the connection to an important period of American History has increase the interest among collectors and made it a much sought after piece. Many of the older Morgans were melted down to make the 1921 Morgans and consequently much rarer.
U.S Peace Dollars
The US Peace Dollars are another example of coins that have become rare. First struck in 1921 to commemorate the ending of World War 1, the Peace Silver Dollar has now become another one of the most popular coins as evidenced by the fact that a complete set of US Peace Dollars can fetch anywhere from 1,100 to 2,300 dollars depending on condition. A complete set would be from 1921 to 1935 with the different mints in the US minting them. The US Peace Dollars were intended to be recalled but it seems there are still some coins available to be found.
Canadian Silver Maple Leafs
Canadian Silver Maple Leaf Coins are among the most popular silver coins coin enthusiasts seek. There is a rich diversity to this coin and a striking example of this is the Titanic Silver Maple Leaf coin.
The name Titanic in this case refers not it’s fate but the size of the coin which seems to indicate that it will continue to be very much in demand. The Titanic is a 5 dollar silver coin originally minted in 1988 as a one ounce pure 99.99 percent silver coin.
Each five dollar coin contains one full troy ounce of silver and features the queen's portrait on one side and the famous Canadian Maple Leaf design on the other. It also contains the special Titanic privy mark! If you can get one, it should be Brilliant Uncirculated (BU) and sealed in its original mint soft clear plastic.
British Silver Coins
The British Silver Britannia is another 1 troy ounce silver coin 99.9 percent fine and very popular due perhaps to having the queens profile stamped on the coin. As with the other coins various years are available and the value of the coins depend largely on the mintage and popularity of each coin.
Australian Silver Coins
Australian Silver Coins are becoming more popular these days. The Australian Silver Kookaburra was first struck in 1990 and the original 300,000 issue was heavily over subscribed at the time. Since then, the Australian Silver Kookaburra has continued to be a very popular coin with collectors.
The Australian 2004 Silver Kookaburra comes in 4 sizes, one, two and ten troy ounces, and a one kilo. The 1 ounce coin is 99.9 percent pure silver and is legal tender in Australia. It has a face value of one Australian Dollar and a weight of 31.635 grams.
Both the Australian Government mint in Canberra, and the Western Australian Perth Mint produce a very diverse range of silver and gold coins.
Buy Silver Rounds
Silver Rounds are coins minted by private mints. The Phoenix Dollar is an example of a silver round. They are basically silver coins but have no status as legal tender. Rounds can be ordered from a mint, Such as the Northwest Territorial Mint for example, who will custom design the reverse and obverse to your specifications. The word round was ‘coined’ simply because the silver metal was formed into coins and could be stacked in ‘rolls’ for easy handling and transport.
So wherever you see the word 'rounds' bandied about, you can take it to mean coins privately minted.
Silver rounds come in all sizes from less than one ounce to ten kilos and over. The one ounce coin contains one ounce of pure silver and an occasionally alloy, usually copper, to give it more durability. The silver content is usually refined to a purity of 99.9 percent or more.
Fort investors, they are probably the best way to purchase silver coins as far as U.S. citizen go since they are produced in one ounce pure silver coins, have the lowest premium above spot price and can be easily traded
Silver Junk Coins
Sir Thomas Gresham, a mid-16th century British Economist, formulated the principle known as Gresham's Law: "When coins of equal face value but different intrinsic value are put into circulation side by side, the coin with the higher intrinsic value will be hoarded and only the coin of lower intrinsic value will remain in circulation."
This has never been so true as it is with Silver Junk Coins, or more properly, U.S. 90% silver coins minted prior to 1965.
In the 1960's when the Public Law 88-36 was passed eliminating silver as the underlying exchange for one and two dollar bills, the U.S. government discontinued minting U.S. dimes, quarters and half dollars with a 90% silver content and switched instead to cheaper cupro-nickel coins with less intrinsic value.
Of course Gresham's Law held good and the pre 1965 silver coins fast became collectors items resulting in the 90% silver bag.
One of the prime benefits of a 90% silver coin bag investment is that the bag has a built-in guarantee unavailable with many other silver investments. Regardless of what happens to the price of silver, the value of your 90% silver bag will never be worth less than its $1,000 face value.
Something worth knowing also is that, when the premium on a 90% silver bag moves up then this is a good indicator of the future price of silver. By the same token, if the premium drops, then the price of silver is likely to drop. But you still have your face value remember!
As well as a nice little investment for the future, collecting bags of silver coins can also be a rewarding and fun activity and, who knows, you could even find that elusive coin worth thousands when you buy 90% Silver Bags
Buy Antique Silver Coins
Although a more specialized activity, antique silver coins can be a worth while activity for the coin collector and investor. This requires a bit more than the usual knowledge of coins and many collectors, specializing in antique silver or gold coins, build up some very impressive and highly valuable collections.
Buy Silver Bars
Silver bars come in all shapes and sizes. Nest to silver rounds, this is an excellent way to buy silver. All bars are produced by mints of course, private and government, and you can buy anything from 5 grams bars up to and over 5 Kilo bars or one ounce up to 100 ounces and higher.
You can also buy silver bars at online auctions as well as privately from individuals and clubs.
It is worthy to note that the 1000 ounce bars carry the lowest premium or mark up the spot price. All silver bars are marked with the weight, purity and the refiner hallmark. 1000 ounce bars generally weight between 930 to 1080 ounces or around 70 pounds. Not something you can pop into your pocket to take and show your friends. They are mainly for serious investors and companies interested in preserving and storing their assets.
These are an excellent way of accumulating silver and storing it. The premium is generally less than on silver coins and the value of course will continue to grow.
According to the Northwest Territorial Mint. "Bars of silver do offer an important investment advantage: they carry a low premium over spot silver. Silver bars are also recognized around the world as a trading medium and are therefore very liquid."
Buy Silver ETFs
The idea with silver ETFs (silver exchange traded funds), is that an investment in certificates backed by silver, administered by banks and brokers, are traded instead of actually trading or buying and selling real silver.
When the gold ETF was launched, it took off like a rocket and there is considerable speculation that the silver ETF will do the same.
It is entirely possible that the launch of silver exchange traded funds is going to ride on the back of the deficit in silver supplies and this would help to boost the value of the ETFs.
However, you do not have the same amount of control over your holdings as you would by actually holding silver coins in your hand. You are more dependent upon the market force outside of your control with ETFs
One important issue to consider when purchasing ETFs is that of tax. Whereas buying silver coins generally incurs no tax since the coins are a legal currency, silver ETFs are considered an investment and one may be subject to some form of tax, such as capital gains for example. One should, as with any investment strategy, consult with your financial advisors, before embarking on any silver investment of any kind.
Buy Silver Stocks
To Buy silver stocks, especially silver futures can be a hair raising experience indeed.
The value of stocks depend not on the spot price of silver but on the management habits of the company in whom one has the shares as well as the effect of market forces. Along with the tax implications of owning shares, this can introduce other factors which may interfere with the value of your holdings.
This is an area best left for the professional stock investor.
Buy Silver Futures
Silver futures are a very precarious way of investing in what you think silver is going to be worth sometime in the future. Playing the silver futures market is a bet that the value of silver will either increase or decrease over a specific period. This is like playing the roulette wheel as of course you have no control over what silver is going to do in a specific period. You may consider that silver will rise, for example and so play the market in that expectation. But if it does not rise within the time period specified it can end up costing you much more than your original investment. You not only have to know if silver is going to rise but also when.
Playing with silver futures can result in a gigantic loss if a wrong call is made. Remember, you are competing against experienced professionals in the field who play with vast amounts of money for a living and can afford some of the losses likely in this arena. The purchase and ownership of actual silver is far safer and guarantees that you will have the value of the silver all the time you actually own the silver coins or bars.
To buy silver coins is not only a rewarding experience, it can be a profitable one too. There is heaps of information about particular coins and types of silver available. You can easily find out what is your personal preference when it comes to buying silver coins and bars.
Provided one does a bit of study and browses around one can pick up some real bargains when you buy silver coins and bars.