Investing In Silver Bullion Coins
Whether you are a collector, investor or simply trying to hedge against inflation, silver bullion coins are becoming one of the most popular alternative forms of investment. Traditionally, when thinking of investments people would think of stocks and shares in Fortune 500 companies, fixed interest government bonds or even fixed term investments in a high street bank. However, due to the dramatic downturn in the world economy, more and more people are starting to invest in silver coins as a reliable source of stability that is safe against the economic downturn, due to it's ability to hold it's value regardless of worsening economic conditions.
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Silver Dollars
We take a look at the world's most widely used currency - the dollar. We take a look at the colorful history of the dollar right through to it's use in modern times. We also look at the value of older dollar coins, as well as information on the collectibility of various silver dollars today.
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Silver Dimes
Detailed information about silver dime coins with sections that cover the different types of dimes that have been minted historically, the collectibility and resale value of silver dimes on the current secondary coin buyers market, as well as general information on how the dime came to become part of modern US currency.
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Mexican Pre Colombian Series
Broken down into 6 separate collections, the Pre-Colombian coin series minted by the Casa de Moneda in Mexico are limited to 4500 mintages per coin. The coins all come in brilliant uncirculated condition and are available in a number of sizes including 1 Oz, 1/2 Oz and 1/4 Oz all available at a small premium over spot on the secondary market.
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States Of Mexico Silver Coin Series
The Mexican State series of silver coins were minted as part of the celebration of the 180th anniversary of the Mexican Federation. The set features 32 different coins that represent the 31 Mexican states and 1 for the Federal District. The coins are minted in 99.9% silver.
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Somalian African Wildlife Series Coins
Disputed as to whether they are silver coins or in fact silver rounds, the Somalian wildlife series are a popular 99.9% fineness silver coin that are minted in Germany. Popular amongst collectors these coins have been produced since as far back as 1999 and feature imagery of the mighty African elephant.
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Chinese Lunar Calendar Coins
Coming in an array of unusual shapes the Chinese lunar coin collection are minted as a homage to the Chinese version of the Zodiac, a 12 year lunar cycle, where each year is represented by creatures such as the monkey, snake and the dragon. Due to their limited mintage and resulting rarity, these coins regularly sell for big prices on the secondary market.
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America The Beautiful Silver Coin Series
First minted in 2010, America The Beautiful silver coins have been overwhelmingly popular with collectors as a result of their striking imagery that bears the resemblance of some of the United States' most wonderful areas of natural beauty such as the Grand Canyon, the Gettysburg National Park and the Yosemite National Park.
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Britannia Silver Coins
The silver Britannia coins are quite peculiar pieces in that they are minted with only a 95.8% silver purity, as opposed to the 99.9% standard purity produced by the majority of world mints. Their gold counterparts were first created in 1987 and the silver bullion coins followed 10 years later, in 1997, when demand for investment silver had become more widespread.
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Australian Lunar Series
Based on the Chinese lunar calendar, a 12 year cyclical calendar that features creatures ranging from the rooster to the rat, the silver Australian Lunar Series are a set of highly collectible coins minted by the famous Perth Mint in WA. The first coins were produced as far back as 1999, the first 12 making up the "Lunar Series I". The second series has been in production since 2008.
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Austrian Philharmonic Silver Coins
The Philharmonic silver coins produced and sold by the Austrian government have fast become one of the world's most collected silver bullion coins. It features imagery based on the Austrian Philharmonic Orchestra and each year has a different insignia. While originally produced as gold bullion coins, they are now minted as silver pieces to cater for the growing market in investment silver.
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Australian Silver Koala
The Australian silver koala coins are some of the most popular bullion pieces minted south of the equator. Known for their imagery that features one of Australia's most revered marsupials - the koala, these popular bullion pieces can be purchased directly from the Perth Mint website , while older mintages can be picked up for a few dollars over spot price on the secondary market.
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Mexican Libertad Coins
Mexico's premier silver bullion piece, the silver Libertad coins are immensely popular among numismatics enthusiasts and coin collectors. The coins are extremely common as mintage has increased up to as many as a few million coins per year. However, the proofs are still very hard to come by which makes them a big hit in collectors circles.
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Chinese Flowers Coin
The early mintages of the Chinese silver flower coins were as few as 6000 or so coins. Since then, annual mintages of this coin have vastly increased, however they still remain extremely popular, regularly commanding prices well over the spot price of silver when sold on the secondary buyers market.
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Chinese Silver Fan Coins
Probably the most unusual of all collectible silver coins, the Chinese silver fans are a one of a kind piece, minted in the likeness of an Oriental fan. Because of their highly irregular shapes, striking features and relative scarcity, they are one of the hardest silver coins to attain.
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Canadian Silver Grizzly Coins
Like the other silver pieces minted by the Canadian government, the silver grizzly coins contain a higher silver content than those produced by other world governments, a fact which lays them claim to the title of the world's purest silver bullion coins - struck with 99.99% purity. The coin was first minted in 2011 and has a face value of $5.
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Australian Silver Kookaburra
Widely known as one of Australia's most recognisable indigenous birds, the kookaburra has lent it's likeness to silver bullion coins dating as far back as 1990. Produced annually by the Perth Mint in Western Australia, silver kookaburra coins are extremely desirable pieces that regularly sell over spot price on the secondary market.
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Canadian Silver Maple Leaf
Emblazoned with Canada's national emblem - the leaf of the Canadian maple tree, silver maple leaves are the world's purest silver bullion coin with a silver consistency of 99.99% purity, compared to the 99.9% purity of silver bullion coins minted by other world governments and private minting firms.
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Commemorative Coins
Minted in order to celebrate an event in history or some other form of special event, commemorative coins are generally more popular as a collectors item than a bullion investment. That said, for the savvy collector, many coins, especially rarer ones can sell for huge premiums that are well in excess of the spot price of silver.
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Chinese Silver Pandas
The Chinese silver panda coins are among the most popular coins available amongst numismatic enthusiasts. Beautifully crafted and featuring new designs each year, they bear an image of China's most revered animal - the giant panda. Available in both gold and silver, Chinese panda coins are available mostly on the secondary market.
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American Silver Buffalo Coins
Minted by the government of the United States of America, the silver buffalo coin has become one of the most highly collectible American bullion pieces. It's original mintage sold out in an astonishingly short period of time when first released to the public in 2001 - just 14 days. It bears the likeness of the American bison on one side and the head of an American Indian on the other.
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American Silver Eagles
The most popular of all the American produced silver coins, American silver eagles are highly collectible due to their diverse number of variations, their high level of purity and the fact they regularly sell for well over spot price on the secondary market. Minted annually by the US government, these coins have been in production since 1986.
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Australian Silver Kangaroo Coins
Displaying various representations of Australia's most infamous marsupial, silver kangaroo coins are collectible bullion coins that were first produced by the Royal Australian Mint in 1993. Featuring different kangaroo designs every year, they are highly sought out due to their attractive design and limited mintage, with only a fixed number of coins being produced annually.
Buying Silver Bullion Coins
The modern bullion coin is designed to provide a specific amount of precious metal – the bullion mentioned in the name – in the form of an officially minted, government guaranteed coin. Bullion coins are usually bought for investment purposes, even in those nations where they are officially accepted as legal tender, because the value of the noble metals which comprise them is far in excess of the face value that is inscribed on the coins themselves.
Bullion coins have been bought for decades by international investors. For a long time, following the demonetization of gold by Franklin Delano Roosevelt in 1933 (a move which probably saved the American economy from a permanent collapse, despite its unpopularity with armchair theorists of the present day), sources of bullion coins lay entirely outside the United States.
During much of the twentieth century, gold was the principal investment metal, and the main source of bullion coins was South Africa, whose superb Krugerrand was prized by collectors everywhere that it was legal to own them. This coin remains popular to this day due to the quality of its minting, the durability that its 22 carat composition gives it (with alloyed copper making it very hard and scratch resistant), and the clearly established value and liquidity which its fame grants it.
However, in the later years of the century, people began to realize that silver is also an excellent investment metal, and is superior to gold in some ways from an investor’s point of view. Silver bullion coins began to be issued by the United States government in the 1980s, when it was decided that the metal no longer had enough strategic value to merit hoarding it.
The first coin issues were received with such enthusiasm that the government, scenting profit, minted more in short order. These successes encouraged the other governments of the world to imitate the actions of the U.S. and issue silver coins of their own, in addition to the gold coins they were already selling. In all cases, these silver coins, though they were released with some reluctance by the financial authorities (with their typically cautious approach), proved to be immensely popular in every instance.
Today, silver bullion coins are minted by dozens of nations around the world. Most of these coins are made as beautiful as possible to make them more attractive to collectors.
Typical methods of increasing the value of silver bullion coins well above spot price for the intrinsic silver content include giving the coins a highly recognizable, iconic design on the reverse (for example, the grizzly bear of Canada or the kangaroos, koalas, and other wondrous wildlife of Australia), producing a limited run of double-struck, deep mirror finished proof coins, and even creating special editions with inset gems, colored decoration, and the use of interesting series that will encourage collecting from year to year (such as the Australian Lunar Series I and II).
Among the major silver bullion coin producing nations, it is possible to list the United States; Canada; Great Britain; Austria; Mexico; Australia; China; and Russia. The output of these countries varies considerably in terms of quantity struck each year, originality of design (with some countries, notably Mexico and Russia, recycling the same images endlessly), and proportion of proof coins to uncirculated bulk coins.
All of the different silver bullion coins produced by the world silver market’s major players are a good investment, due to their government guaranteed quality and silver content, which is generally never less than 99.9% pure silver (.999 fineness). Which you choose to collect depends on a number of factors, including personal taste, availability in your country or region, and similar matters.
Some Advantages of Silver Bullion Coins
Silver bullion coins became so popular in such a brief amount of time, once they were made generally available to the public in large enough numbers to make collecting them a viable practice, because they have a number of advantages – some of which make them superior to gold to many collectors (though, obviously, individual circumstances vary).
Silver bullion coins are, first and foremost, the most readily available of all the world’s precious metal coins. Gold costs an astonishing $1,500 per ounce as of this writing, meaning that accumulating any stock of the metal is difficult except for the most affluent collector.
Someone with even a low salary, however, can build up a good stock of silver bullion coins simply by buying one or two every week. Over the course of a year or two, this can lead to a considerable reserve of silver coins. This accessibility to silver bullion coins is actually beneficial not only to less affluent coin collectors themselves, but also to the coin collecting community as a whole, because it increases the liquidity of everyone’s silver holdings (by creating a far larger market for those who want to liquidate some or all of their holdings) and helps to stabilize the general economy (by spreading a reliable source of inflation-proof value throughout the fabric of society).
Silver bullion coins are also advantageous because of their high liquidity. Since each coin is worth less than the extremely concentrated value found in gold, but far more than paper currencies or most other stores of monetary wealth, it is easy to turn your silver bullion coins into cash, or vice versa.
Finally, silver bullion coins are a stable, reliable source of value over time. The price of gold tends to shoot up stratospherically and then plunge to the depths again in response to purely speculative factors, with little relationship to the actual value of money.
By contrast, silver is a fairly reliable metal. True, there have been moments when a speculative bubble has formed, most notoriously in the case of the Hunt brothers’ attempt to corner the market on the metal during the 1970s, but in general, silver is more predictable and thus more useful as a store of value – and perhaps even as an investment for those who prefer a more cautious approach.
Silver bullion coins are also a bit safer than gold. Silver does not produce the same intense reaction of greed as gold does, so it is less likely to bring you unwanted attention. Furthermore, for much the same reason, the chances of government outlawing of silver or refusal of banks to redeem certificates are much lower than with gold. Gold is a good investment too, but it requires a lot of resources and a greater willingness to take risks than do silver bullion coins.
Although tarnishing was once a problem with silver coins, most modern coins come with protective sheathing of some kind, while mint tubes, storage sheets, and other devices meant to keep your coins fresh and pristine regardless of time’s passage are readily available from all coin dealers.
Varieties of Silver Bullion Coins Available
Silver bullion coins are struck, most typically, in a one troy ounce size. This measure has been retained even in those countries which have otherwise gone over completely to the metric system – probably indicating the importance of American silver buyers to the coin market. Most collectors make one troy ounce silver bullion coins the backbone of their collections.
There are both larger and small silver bullion coins as well, however. Some may be issued as ½ ounce coins, while others weigh in at ponderous 22 pounds (10 kilograms). There are coins of all sizes in between, though those coins of less than one ounces are often known as “fractional silver bullion coins”.
Although the vast majority of silver bullion coins today adhere to a .999 fineness (99.9% pure silver), one mint – that of the Canadians – goes a step further and offers bullion coins of .9999 fineness, or 99.99% pure silver. Some collectors prefer the coins of Canada because of this slightly enhanced purity, but for practical purposes, the spot value of Canadian and non-Canadian silver bullion coins differs by about 31 cents per ounce at current prices.
With the huge range of different national bullion coins to pick from, the modern collector can produce a truly varied, intriguing collection, or focus totally on one type of coin, perhaps the easiest to obtain. Exploring the wonderful world of silver bullion coins is an adventure regardless of your individual approach – and can prove rewarding if you make your investments well.
About Silver Coins
Silver coins have been the lifeblood of commerce for thousands of years. More common than gold – and therefore more readily available than that substance, and able to create a liquid, functional economy – yet rare enough to be valuable, possessing the same timeless chemical stability as the other precious metals, and a clear, brilliant beauty perhaps starker but no less intense than that of gold.
Silver and electrum coins were perhaps made first in the long-lost kingdom of Lydia, with a leopard’s head with the sun on its brow as the emblem inscribed there by order of its king, Alyattes. Although some historians doubt this attribution, several pieces of evidence point to Lydia as the site of coinage’s invention. Croesus, son of Alyattes, is still famed in legend as the sovereign at whose touch all things turned to gold.
Furthermore, the Persians soon defeated Lydia, and immediately afterward began to mint coins of their own – evidently having been inspired by the coins they looted during their conquest. The presence of coins, and the affluence they had bred, was clearly a powerful lure for Persian martial adventurism in the area, though it is uncertain whether Croesus died at the time or survived to offer the Persian king advice on producing his new coinage.
The introduction of silver coinage had important economic repercussions. When ingots were the only medium of exchange, their relatively large size made them very scarce, and used only by the very wealthy (much as gold would be at a later time). The small size of coins allowed them to be minted abundantly, increasing the money supply and stimulating economic growth and diversification at all levels of the social pyramid.
Today, silver coins are no longer used as legal tender – and given the scale of the economy today, it would be impossible to reinstate a silver-based currency system without also returning to an 18th century technological level and population, something which some silver enthusiasts overlook.
This does not mean, however, that silver coins are no longer useful. Instead, they have become a method of guarding the underlying value of our earnings against inflationary pressures, and the centerpiece of a major collectibles market where the savvy player can earn a profit and perhaps add considerably to their wealth, whether they are trading single coins or whole collections.
What are the Features of Silver Coins?
In studying silver coins, there are some features which you should learn to recognize to ease your understanding of descriptions and help you make your own analyses of what you are looking at, rather than needing to rely completely on another person’s opinion while buying or selling. Numismatic terminology is not used to confuse the beginner, but to allow people dealing in silver coins to communicate precise information about them to one another.
The two sides of a silver coin (or any coin) are called the obverse and the reverse. The obverse, or front, of the coin often bears the effigy of a monarch, politician, or other nationally significant figure, sometimes allegorical. Some countries, such as China, tend to place famous national buildings on the obverse instead of a human or allegorical figure. It usually also bears the name of the minting country.
The reverse of a modern silver coin is often the more interesting of the two sides, with a unique design often drawn from nature or something similar. For example, the America the Beautiful set of five ounce silver quarters includes scenery, animals, or buildings from fifty of the United States’ most spectacular landmarks or national treasures.
Many, though not all, silver bullion coins struck today bear a mintmark as well. Mintmarks are a single initial letter, or sometimes a tiny emblem, indicating which mint a given coin was struck at. Obviously, mintmarks are only found on the coins of nations which have more than a single minting location, such as the United States, which has four. Chinese coins often lack a mintmark despite the presence of several major mints in China.
The edges of silver coins may be reeded – meaning that there are grooves all around the outer edge of the disc of silver. These were originally meant to keep people from shaving slivers of metal off the coin in order to cheat other people with an underweight piece of currency passed off as full weight. Today, these features are mostly decorative.
All silver coins have a nominal face value, which typically has nothing to do with the actual monetary value of the silver and is simply included as an arbitrary addition. The presence of a nominal value is what separates a silver coin from a silver round, because it indicates, however vaguely, that the coin is legal tender.
Who Produces Silver Bullion Coins?
Silver coins are only struck legally by governments – today, silver coins cannot be made by private companies or individuals. Those without official standing can still make silver rounds – coin-like bullion strikings that lack a nominal face value. Silver coins themselves, however, a government monopoly, and attempting to make coins is the crime of counterfeiting.
There is a “competitive currency” movement in the United States which wants to make it legal for private companies to make silver bullion coins as well, and not just rounds. These coins would have legal tender value equal to government coinage. This is an interesting idea, though how the average citizen could tell whether or not a privately issued coin was worth as much (that is, contained as much silver) as a government coin, is unclear, especially since assaying is time consuming and very costly.
This brings up a final point about silver bullion coins; the fact that they re made by a government is your best guarantee that they really contain the silver content they are advertised as having. You can be confident in the authenticity of government issued silver coins, which is one of their advantages.
What is the Difference Between an Uncirculated Bullion Coin and an Uncirculated Proof Coin?
Modern silver bullion coins are usually issued in two forms – uncirculated bullion coins and uncirculated proof coins. Ordinary bullion coins are made with great skill and attention, but they are only struck once, and are generally given no special finish. They are also sold in mint tubes in many cases, rather than being individually boxed and sold with a certificate of authenticity.
Proof coins, on the other hand, are struck with collectors firmly in mind. Though the original proofs were meant for the enjoyment of treasury officials and few other high officials of the minting country, today’s proof coins are more of a “deluxe collector’s edition” of the ordinary coin. Certificates, special boxes, and other paper accessories are often packaged with a proof coin to make it even more attractive to collectors.
Silver proofs are double struck, meaning that the imagery on them will be extraordinarily clear, sharp, and crisply visible. Sometimes, the second striking is slightly askew from the first, producing a very slight “double image” effect which is visible with a magnifying class. Proof coins are also given an unusual, especially lustrous finish. The current minting finishes include deep mirror finish, matte finish, frosting, and so forth. The finishes help to bring out the details of the coins much more vividly as well.
How Much does a Silver Coin Cost?
Modern silver coins are always worth at least as much as the spot value of the silver in them. For example, if silver is selling for $34 an ounce, then a 1 troy ounce silver bullion coin will never cost less than $34. There is also always a premium on coins – an extra charge which covers the costs of producing the coin and marketing it – after all, those who supply the coins need to make a profit if they are to be able to continue to do so.
The premium for production and marketing is usually only a few dollars. However, coins often have a numismatic value as well, which is the premium added by their collectible nature. Coins which have large mintages, come from little known sources, or are not very appealing often have little additional numismatic value. Those which are rare, exceptionally beautiful, or otherwise popular may have scores of dollars, or even hundreds of dollars, in numismatic value.
How Much are Historical Silver Coins Worth?
Silver coins made prior to the modern era are often much smaller than contemporary silver bullion coins, because it was necessary for governments to break up their silver supply into a usefully liquid size. If the smallest available silver coin was worth half as much as a horse or a small house, it would be useless for buying a loaf of bread, a cheap knife, or a new pair of shoes.
As such, the spot or melt value of such coins is often negligible. However, they are likely to have at least some numismatic value, and in some cases an astonishing amount. Some rare coins can cost tens of thousands, or even hundreds of thousands, of dollars, assuming that they are in good condition. The numismatic value of such coins makes up the vast majority of their worth, and the spot value of their intrinsic silver is a trifling part of the total price.
Which Nations Produce Silver Coins?
Silver coins are big business in today’s world, with unprecedented numbers of ordinary people buying up these coins. In some cases, this is in the hope that the price of silver will rise sharply in the near future, allowing them to sell at a profit. In other cases, silver is little more than a “fear investment” – something that people buy because of dread and uncertainty about the economic future, because they can think of nothing else to buy that they believe will retain value over time.
With such high demand, it is not surprising that there is a high supply as well. Most of the world’s major governments now produce silver coins. The foremost coin producers of the modern world are the United States, Canada, Great Britain, Austria, Australia, and China. These countries mint coins both of their own and for other nations as well, due to their high production capacity, the excellent quality of their products, and the reliability of their mint officials.
Other countries have also dabbled in the silver coin market, and provide some fine offerings, especially for those who like the unusual and the path less trodden. Coins minted by the Vatican, for example, are eagerly sought for their rarity and quality. Russia, Mexico, South Africa, and various other countries mint at least a few, and often quite a few, silver coins, though they typically issue only one design per year rather than the dozens minted by the six nations who are the main pillars of the modern silver trade.