There are two primary ways to gain exposure to silver prices: by purchasing and holding physical silver, or by utilizing paper silver investments like ETFs, futures contracts, etc. This section of our website focuses on the various available types of physical silver. To learn about paper silver investments, click here.
We typically advocate physical silver investments over paper silver investments, as physical provides you true value in a crisis situation where paper investments may be rendered worthless. In addition, many paper silver investments are not actually titles to any real silver, and rather are just financial instruments that tend to correlate with the spot price of silver.
If you do choose to invest in physical silver, your next choice is to figure out what type of silver you will purchase. There are six main categories of silver products, including bars, coins, rounds, junk silver, silver shot, and numismatic silver. Each type of silver has its own advantages and disadvantages, which we’ll cover in this section.
Silver Bars
Bars of silver are now an extremely common means of buying silver and diversifying one’s investment portfolio. Bars have a uniform size and are stored with ease in stacks. The storage required for a large silver bar investment is relatively small. Many bars have hallmarks. This makes them very easy to sell when the need arises.
The purity of silver bars tends to be .999, which is 99.9% pure. This has been the standard met by manufacturers for many years. The Royal Canadian Mint produces some silver bars that are 99.99% pure. These are widely recognized as the purest silver in the market place. .9999 bars are sometimes referred to as “four 9″ bars.
Silver bars are most commonly made in 1, 5, 10, and 100 oz weights. Other weights are available, however they typically offer lesser liquidity, so we always recommend sticking to the standard weights of silver bars.
Silver Coins
Silver coins tend to cost more relative to spot price than do silver bars or rounds. They are smaller, sometimes collectable, and more accessible to the retail investor. Often sold in monster boxes by mints, they represent an attractive investment vehicle. The most common silver coins are:
Most silver coins are made in a few variations, including standard uncirculated coins as well as “proof” coins. Uncirculated coins are primarily valued for their silver content, while proof coins are struck with special dies in limited runs, thus giving them a collectibility value beyond the worth of their silver content.
Silver Rounds
Silver rounds are another common form of physical silver. Rounds appear similar in shape to coins, with the primary difference being that silver rounds are produced by private mints, while silver coins are produced by government mints and often hold status as official currency.
Due to this discrepancy, silver rounds are often much cheaper than silver coins as they are a more generic option with no collectibility premium. Rounds typically ship in tubes of 20, and feature plain designs to keep their cost-basis down.
Junk Silver
Junk silver is another very cheap option of obtaining physical silver. “Junk silver” is defined as 90%, 40%, and 35% silver coins that were often in circulation decades ago. Junk silver is usually sold in “face value” bags, meaning you might purchase a $100 face value bag of 90% silver, which could include 1,000 90% silver dimes.
Many investors who prefer junk silver like the fact that it could easily be used as a currency in the future, since the smaller coins are so divisible as compared to a 100 oz silver bar or even a 1 oz silver coin.
Silver Shot
Silver shot is tiny-sized pieces of silver, typically resembling small ball bearings, nuggets, shots, or grains. This form of silver is not very demanded by investors, as it brings special storage considerations as well as liquidity concerns. We recommend steering clear of silver shot unless you have a specific reason for buying it.
Numismatic Silver
Numismatic silver is a bit different than the other silver forms listed on this page, as the value of these pieces are almost entirely derived from their rarity and relative market demand. For example, 1 oz numismatic silver coins may trade for hundreds of dollars per piece, despite the fact that their silver content is only worth ~$30.
Numismatic investments require a wealth of knowledge of the industry, so we recommend steering clear of these products unless you have some inherent knowledge or edge over other numismatists.
Liquidity
When buying physical silver, it is always important to keep liquidity in mind. By sticking to popular brands and common weights of physical silver products, you will have the easiest time in the future when you might unload some of your metal. Off-weight pieces, or pieces produced by relatively unknown brands might have a harder time selling than the more popular forms of silver bullion like American Eagles or 100 oz COMEX bars.