Silver is a very popular way for many to invest in precious metals. It makes a great investment because silver is more affordable than gold. This allows investors to accumulate more ounces of silver than gold for the same level of investment.
There are two ways to invest in silver. There is silver bullion which includes silver bars, silver rounds, and silver coins and Investment Grade Coins like the Silver American Eagle Proof coins. Silver bars and silver rounds are produced by a private entity while coins are minted by government agencies. Rounds and bars are strictly for investment purposes while bullion coins are for investors and collectors.
Investment Grade Coins are Proof coins that have been graded by a third party in Proof 70 condition. This is the highest grade possible for any coin. Bullion coins are struck once while Proof coins are struck twice. Proof coins are more lustrous and have a more defined design. Proof coins also have lower populations than the bullion version of the coin. The Proof 70 coins are even a smaller population of the Proof version of the coins.
Per ounce, bars and rounds are priced lower than coins. There is a scarcity because of set production runs with coins while bars and rounds can be produced in unlimited quantities. There is also a collectible value to coins, resulting in a higher price per ounce.
The purity of silver bullion has been .999 fine (99.9% pure) but recently the Royal Canadian Mint has produced a 100oz silver bar with .9999 purity. There is also pre-65 U.S. coins, considered to be “Junk Silver.” These coins were minted using 90% silver, the value is derived from the melt value of the coins and not the face value, thus the name Junk Silver.
The most common form of investment in silver is the silver bar. Silver bars are available in many sizes from 1oz to 1 kilo with most investors preferring the 100oz bar. Generally, the larger the bar, the smaller the price per oz.
Silver rounds, like silver bars, are produced by an independent company and do not have a face value. The most common size for a silver round is 1oz but there are silver rounds available in larger sizes like the 2oz Silver Plank coin.
Silver coins are minted and distributed by the mint of a country. As an example, the Silver American Eagle is produced by the U.S. Mint and the Australian Kangaroo is minted by the Perth Mint in Australia. Silver coins have a face value which further distinguishes them from a silver round.
The purity and content of silver coins will be similar to that of silver bars and rounds but silver coins are more expensive than bars and rounds. This is due to the scarcity of coins and the secondary collector’s market for coins.
Silver Investment Grade Coins
Investment Grade Coins are the Proof version of coins that have been graded by an independent third party to be in perfect Proof 70 condition. The Proof version of coins has been struck twice which makes them shinier with a more detailed design than the bullion version of the coin. The graded coins are encapsulated in a protective slab with an acid-free label. All Proof 70 Investment Grade Coins like the Silver American Eagle from the U.S. Gold Bureau features a hand-signed Ed Moy label. These exclusive labels add to the rarity and value of the coin. Investment Grade Coins are not subject to the fluctuations of the spot price of the precious metal and can be used to diversify investment portfolios within precious metals.
How are Silver Prices Determined?
The cost of silver bullion like bars and rounds is determined using the current silver spot price. This spot price is the price of silver per troy ounce. The spot price is a good indicator of the current market value of silver. The U.S. Gold Bureau offers live spot prices for silver, gold, platinum, and palladium. On our live precious metals prices page you can see live and historical prices of gold, silver, and other precious metals for 1 month, quarterly, 6 month, and 1 year increments.