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Silver Bullion And Coins

Investing in Silver Bullion and Coins

In recent years, silver has moved as high as $50 per ounce and back down through $30. Markets have been volatile, and at times been sanguine. It is how markets move. This creates opportunities for both short term silver speculators and long term investors.

Popular methods of investing in physical silver include buying coins and bullion.

Investors in silver coins tend to hold a fairly stable investment. The value is more determined by factors such as rarity, condition, and age. The premium a buyer pays over and above the value of the silver content itself is the real value of a silver coin. It is accepted that the coin’s value is because of its collectability, and not its silver purity and weight.

On the other hand, a bullion investor buys silver because of the silver content and weight alone. The premium he pays over the cash price (the spot price) of silver for his bullion will be small. The value of his investment, be it a round or bar, is based directly on the weight and purity of the bullion bought.

Underlining this difference in investment valuation is the sale of a set of coins on October 24th 2011 by Morton and Eden, the London numismatic specialists. A collection of ancient Greek coins, with an estimated total value of $1.5 million, was sold for an amount of $4 million. The star of the sale was a stater from Crete, which depicted Zeus’s lover, Europa, on one side and a bull on the reverse. It fetched a fantastic $479,000, a world record, for a silver content that, weighing just over 11 grams, melted down would have had a value of around $12!

However, silver bullion investors would see their investment grow strongly when the price of silver rises rapidly, though such a move would have little to no effect on the value of a silver coin. The rarity of a coin, its key to value, will not have changed and so the value will not have risen. An investor in silver bullion, who invests before a strong rally in the silver price, will see large profits in a short space of time that is not usually achievable by investors in rare coins.

Whatever an investor’s preferred investment method into silver, it is always best to conduct proper research and invest wisely. Holding bullion and coins will ensure better diversification in the single asset and help to create a store of value and wealth for the future.

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