How To Buy Silver Coins

May 7th 2016

Buying silver is an excellent way to invest your money. Just like investing in gold, silver provides a trustworthy hedge against such pitfalls as inflation and economic recessions. The demand for silver is rapidly increasing, and the prices are climbing sky high. Investors who hold physical silver stand to receive substantial gains on their initial investments over time.

Types of Silver Coins

There are four types of silver coins:

  • Silver Bullion Coins: These normally have a silver fineness of .999 or above. They are basically considered to be pure silver and are bought with two cost layers in mind: precious silver metal content and dealer premium.
  • Collector Silver Coins (Also Known as Numismatic Coins): These are coins that are bought mostly by collectors. The value of rare coins varies based on so many different factors that it makes investment a risky buy. The things you want to watch out for are the metal content, numismatic premium and, as always, dealer profit. Dealing in numismatic coins is a difficult trade facilitated by years and years of experience and skill.
  • Semi-Numismatic Coins: These coins are mostly based on the silver bullion content of the metal.
  • Pre-1964 Junk Silver Coins: These coins are the highly circulated ones such as quarters, dimes, Morgan dollars and half dollars. 

Buying Silver Coins

Silver coins can be bought in a number of different ways. Some investors like to buy them at local coin shops, while others prefer to buy straight from the banks. If you’re buying from silver-coin dealers, make sure that they will offer you a fair price if you wish to sell to them back. Also, consider the authority and reputation of the silver dealer you are working with. The lowest price doesn’t always guarantee the best deal. 

Rare, collectible silver coins can be tempting and can also offer a great return on your investment in the right circumstances. However, their value is not guaranteed. Different factors like scarcity, condition and appearance will greatly affect the price of the coins and, as a result, the value is extremely subjective.

Because rare coins can be a little risky, most investors are better off buying bullion coins. These are silver coins that are kept as a store of value or an investment rather than being a collector’s item. This means that silver bullion coins are a much better choice for investors intending to ride the silver bull market.

One of the more popular coins produced by the United States Mint is the American Eagle, a one-ounce coin that can be bought from the Mint directly before it has been circulated. These coins are great value, as their price is a stiff premium to that of spot-silver prices. The flip side is that aftermarket buying prices can be much lower than the original cost. This is true for a number of different silver options, such as the Mint’s commemorative coins like the one-ounce 2012 Infantry Silver Dollar.

Buying from the U.S. Mint offers a guarantee of purity, beauty and liquid market, which means that it is an appealing option when compared to buying from a dealer. Buying silver coins from a dealer, however, can often land you a much better price. The American Precious Metals Exchange (AMPEX), for example, sells certain silver coins at lower premiums than the original issued price. Silver “rounds” on AMPEX sell for very low premiums over spot prices. They fluctuate regularly, so it’s best to keep in touch with the changing conditions of the global metal markets.

Researching buyers and deciding who to buy from is incredibly important. You should be well versed on the different types of silver coins, the best type of silver to benefit you as an investor and the safest ways to buy silver coins. 

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