The Best Silver Coins to Buy and Why

Posted by on December 5, 2011
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FreedomPhoenix .999 Silver, one Troy oz. from AOCS (photo by digitalmoneyworld*)

Editor's note: So you might be saying to yourself, "I want to buy silver." This naturally leads to the question, "Should I buy silver now?" SilverCoins.Ag will always say "It's always a good time to buy silver!". This is completely unprofessional advice because we are silver fanatics. However, the vast fluctuations in silver prices usually give a person an opportunity to profit on their investment if they are the slightest bit patient. With that in mind, we present our article:

The Best Silver Coins to Buy... and Why! (Breakdown from the Collectors and Investors standpoint)

When deciding on what silver coins to get there are a number of different factors to look into.  The first is whether you are looking at a silver investment (meaning to collect silver coins as an investment in a precious metal) or if you are interested in the historical connection collectible coins have - which is to look at them for their numismatic value.  Both are valid perspectives and both have potential for profit.  Looking at the investment of coins for their value as an accumulation of precious metal there are basically three categories to consider: “junk” silver coins, pure (99.9% to 99.99%) silver coins, and pure (99.9% to 99.99%) silver rounds.

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“Junk” silver coins are not junk, but are silver coins whose silver content make them more valuable than their numismatic value.  When it comes to silver coins from the United States’ Mint those minted before 1964 will typically be 90% silver in content, some of those minted between 1965 and 1970 are 40% silver content.  Canadian coins are different: from 1858 to 1919 they’re 92.5% silver, from 1920 to 1967 80% silver with some variations.  So there are variations concerning various countries' silver circulated coins content.  Large bags of “Junk” silver coins are available. When these silver coins can be bought individually they are readily recognizable and are fairly easy to sell.  They do need to be refined for their silver and as with all silver transactions there are premiums connected with such services.

A very important set of similar but different terms is ‘ounce’ and ‘Troy ounce’ or ‘t oz’.  ‘Ounce’ noted as ‘oz’ (avoirdupois ounce) is the English measure of weight still used in the United States of America, while ‘Troy ounce’ is an older term of measuring weight related to the ‘pennyweight’ or ‘dwt’ or ‘pwt’ which is used by jewelers and dentists for the measure of precious metal.  The “d” comes from the ancient Roman coin ‘denarius’ which is penny-like and weighed 24 grains.  ‘Grain’ or ‘gr’ is an ancient standard measure of weight and weighs the same in US, troy system and metric.  1 Troy ounce is 20 pennyweight.  There are 12 Troy ounces in 1 Troy pound which is lighter than the 16 avoirdupois ounces which make up the avoirdupois pound.  The Troy pound is no longer in use.  1 Troy ounce is equivalent to 1.097142857 avoirdupois ounces (31.10 grams), and 1 avoirdupois once is equal to 0.911458333 Troy ounces (28.35 grams).  Pure silver is usually in Troy ounces.

Pure silver coins do not need to be refined.  Being minted by various countries they are easily recognized.  They are called coins because they are spendable as currency.  However they are intended to provide pure silver and create a profit for the mint.  These coins have a high premium from the mint and their sellers.  These silver coins may also accrue a numismatic value as they are minted in a limited quantity, dated, and often offered in ‘Proof’ state, and such.  As a matter of fact the very popular “American Silver Eagle” was in acted by the United States Congress as a silver coin to be of numismatic value.  If you do not buy these from the mint it is best to shop around.  Sellers premiums vary and spending some time researching various sellers may help you earn a considerable savings.

Then there are the silver rounds which do not have any value at all as currency. They are simply silver 99.9% to 99.99% pure.  These are the best for those investing purely in a precious metal.  There are many companies that mint silver rounds and those with recognizable names are easier to move.  Even though well known companies like Johnson Matthey and Engelhard Corporation had stopped making silver rounds in the 1980’s when available they are bought before other silver rounds because of the incredible reputation these mints have.  Sunshine Minting is a mint that currently produced silver rounds, their ‘Silver Eagle’ is very popular, and they have a great reputation.  Silver rounds have the lowest premiums.  The lesser known mints have the lowest, but not necessarily easier to move.  The lesser known mints are sometimes referred to as ‘generic’.

Silver coin collecting, or investing in silver numismatic coins: There are even more choices in deciding what you types of silver coins you want to collect.  The idea is to collect what you like.  Hopefully you will find some tips on the wide variety of resources available to get the best value on your purchases.

Buying current silver coins in ‘Uncirculated/Mint’ or ‘Proof’ conditions is a popular approach.  Although these have high premiums they are typically sealed and documented, ready and able to withstand the tests of time.  The United States issues ‘mint sets’, started in 1947, all the sets before 1965 contain the 90% silver coins.  Some mint sets contain a sample of each coin of the generally distributed coins.  Others have a variety; The United States mint has a series of 90% silver quarters ‘America the Beautiful’ Proof set of 5 of a 50 piece series.  There are single silver coins available also.

There is a rich selection and history of silver coins.  Some of the pricier, older, rare silver collectible coins are actually known by the collections they belonged to and even named after a notable collector.  For instance the Olsen-Hawn 1913 Liberty Nickel is one of the five of these known to exist and is considered to be in the second best condition of the five.  It’s not silver like the half-dime series before, but interesting: The collector who underbid was reported to be returning to coin collecting and thought the Olsen-Hawn 1913 Liberty Nickel would be an exciting way to restart a collection.  The action took place January 2010, and the Olsen-Hawn 1913 Liberty Nickel sold for $3.25 million (US).  There was a 15% auction house fee, which the buyer paid, making the price over $3.7 million (US).

A more typical approach to starting a collection of silver coins would be to go to a local shop and take a look at what they have and ask question and for suggestions.  It is best not to buy right away.  Take notes of prices and grades and such to check their various recommendations for comparison.  There are various resources to find out what current market prices are.  The big one for United States collectible coins is simply called “The Red Book” it’s put out every year and has a lot of information about collecting coins and some historical notes.  There are various auction houses which have sold various coins and collections and they have books listing these sale prices.  Others have collated these selling prices.  The Internet has price listings and services; PCGS has their list available online and for a subscription fee you can get additional information about specific mintage and more.

Finding out what you like is part of the fun for beginners.  Small purchases of numismatic coins lessen the chances of being ‘taken for’.  So will considering lower grade coins, even a ‘Fine’ silver coin can be significantly less than an ‘Almost Uncirculated’ or ‘Mint State’ coin.  Finding out how coins appreciate, and depreciate in value is tricky.  In the long term most go up in value, however from time to time somebody’s ‘hoard’ comes into play and may devalue a coin or even a series of coins.  Sometimes a particular series or mintage of coin comes into vogue or falls out of favor.  Usually numismatic silver coins rise in value slowly over years and decades over the rate of inflation.

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