Coins are a popular way for investors to get into silver holdings. There are many different silver coins available on the market with varying silver content levels.
There are two main types of coin investors:
- Those investing in the silver content
- Those investing in rare coins with numismatic (collector) value
Legal Tender Value
Some coins can have legal tender face value. Minted by governments, they are of guaranteed authenticity and therefore attractive to those looking to conserve wealth. The face value is normally a nominal value much lower than their silver worth – an example is an American Silver Eagle, which has a $1 USD face value, but trades for $30+ based on its silver content. Investors sometimes see legal tender coins as more secure an investment than rounds and commemorative coins.
Limited Production Runs
Each year there are limited production runs of the most common types of silver bullion coins, such as Silver Eagles, Silver Maples, and Silver Philharmonics. This means that there remains relative scarcity in the market and the price is kept high; it is a supply and demand scenario. These types of coins are normally priced a little above their silver content worth, and typically are a buck or so above similar weight/purity bars or rounds.
In silver forums posters describe some silver coins as “survivor coins”. Essentially, people buy coins and stash them as an investment, but also for security against currency collapse. Many people are worried that the constant printing of money, inflation and the “broken banking system” could lead to a situation where digital assets are lost and “money” is no longer a viable way to buy things. Silver coins are a favored choice for people who are looking to ensure they maintain wealth whatever happens in the World.
Coins are normally stored in tubes or bags, depending on their worth. It is possible to buy large boxes of coins from many mints, known as “monster boxes”. These have 500 coins and represent a big investment in small denomination units. They come as 25 tubes of 20 coins, or 20 tubes of 25 coins. Examples of coins available in monster boxes are American Silver Eagles, Austrian Silver Philharmonics, and Canadian Silver Maple Leaves.
Silver Supply and Demand
The premium on silver coins is somewhat driven by supply and demand. Pre YR 2K many people looked to buy up silver coins in order to hedge against the collapse of the financial world (if computers failed). Prices went up as the demand for coins was significantly increased.
Generally, prices of bullion coins are around 10% above the spot price of silver but in certain outlets you can end up paying much more. Other forms of silver coins can be close to or even below spot price. It all depends on where you buy and the type of coin you choose.
Junk silver has no collector value and is purely bought for the silver content. Many pre-1965 American coins had 90% silver content, while some had 40% and some 35%. Silver was used by the mint as it was much less expensive compared to today. As the price of silver increased the US stopped minting with silver. The coins are nowadays traded as investment silver, and typically offers the lowest cost form of silver purchase.