Beginners Guide to Buying Silver
By Paul Vanguard, for BullionMax.com
First-time precious metals buyers almost always start by buying silver. It’s a no-brainer. Of the big four precious metals, silver has the lowest price per ounce (by FAR). Still, silver has a centuries-long track record as a form of money, a store of value and a sign of wealth and privilege. (Who’s born with a silver spoon in their mouth?)
Silver is affordable. That has an unfortunate side effect, though… Beginner silver buyers are confronted with an astonishing variety of product choices. And because you’re buying precious metals, the stakes seem very high!
Since you can get nearly a hundred silver coins for the price of a single gold coin... Sometimes, beginners never make it past page 2 of the silver coin product listings.
So, to give you a head start and cut through the confusion, here the three types of silver you can buy, along with a description and top products in each category.
Numismatic or proof silver coins
Pros: These represent the finest work world mints are capable of – they’re works of art! May appreciate in value on the secondary market. Usually come with fancy presentation packaging.
Cons: Most expensive category of silver to buy.
Best-suited for: Collectors, coin enthusiasts, those buying silver coins as a gift.
These are the collector's grade versions of standard-issue sovereign silver coins, whether you're talking about the American proof silver eagle, the Canadian silver maple leaf or any other world-renowned silver coin.
Totally different from bullion-grade coins (discussed below) for several reasons:
- More attention is paid to their craftsmanship overall.
- Proofs are shinier, more polished have more distinct designs
- Proof silver coins often come in a decorative package, with a certificate of authenticity
- They’re minted in much smaller quantities than other silver coins.
The more we get into numismatics, the more proof, brilliant and uncirculated coins start to take over. As you delve into the world of collectibles, you'll find an aftermarket where coins that were minted with an error or blemish sell for hundreds of thousands of dollars on auctions. For the most part, however, the proof coin is meant to be an exemplary version of its bullion silver coins.
BullionMax top seller: 1 oz proof American eagle silver coin
Silver bullion coins
Pros: Less expensive than proof silver coins. Engaging artwork. Huge variety of designs to choose from. Leading silver bullion coins have built-in anti-counterfeiting features for additional security and confidence. Wider variety of weights available.
Cons: Highly unlikely to appreciate in secondary market collector value. The paradox of choice can make picking silver bullion coins stressful for beginners.
Best-suited for: Any silver coin enthusiast wanting to minimize premium over spot price
These are the "money" coins, standard issue in every sense and treated as legal tender in the country they originate from. They’re called silver bullion coins to distinguish them from proof/collectible coins in the sense that bullion, as a commodity, is fungible. (Fungible. Adjective. Able to replace or be replaced by another identical item; mutually interchangeable.)
Even though they don't have fancy packaging like a proof coin, a lot of care goes into bullion mintages. Approving new designs can take decades. They’re struck at a much slower pace than “circulating” coins (pennies and quarters – you know, pocket change). The craftsmanship, though not as marvelous as proofs, is nonetheless staggering.
Silver bullion coins are equipped with increasingly-advanced anti-counterfeiting technologies (most built right into the individual coin). They sell out at world mints almost instantly. (In most cases, they're sold out before release via pre-orders.)
This tells you that demand is huge and that there's no shortage of those who appreciate a silver bullion coin, whether they’re die-hard collectors or starting silver stackers.
BullionMax top sellers:
Silver bars and rounds
Pros: The most affordable form of silver. Very large weights available.
Cons: May be less liquid on the secondary market. Cannot be expected to appreciate in aftermarket value.
Best-suited for: Silver bullion buyers who want the biggest bang for their buck.
These two products are actually different from one another and are mostly grouped because of their similarities in premiums over spot price and their private mintage. While silver coins can only be minted by government mints (or private mints under an official government contract), any refiner or mint can make their own silver bars or silver rounds.
Privately-issued (rather than government-minted) silver bars tend to overtake the market when it comes to demand. One needs look no further than the Valcambi Combibar to see why sovereign mints can find it difficult to compete with private ones in this category.
Silver rounds can be seen as the more artistic version of the silver bar. Because they aren't recognized as legal tender and usually aren’t minted to the same quality as silver coins, silver rounds generally enjoy much less collector interest. Despite this, they're exceedingly similar to silver coins in design, and some refiners turn out high-quality silver rounds. The more you get into rounds, the more you'll start to notice that their designs of coins in variety and subject matter – as well as, some would argue, quality.
BullionMax top sellers:
Still undecided? We can help…
Our silver starter kit
The BullionMax Silver Starter Pack delivers an assortment of the top-notch silver bullion outlined above without all the picking and choosing and price-shopping. All of the products inside were carefully selected based on appeal to customers, and are individually priced as competitively as all of our products.
Want silver, but don’t know which silver is right for you? Get started the easy with special, first-time-buyer pricing on our 5 oz Silver Stacker Starter Kit.
Paul Vanguard is a lifelong precious metals enthusiast and a proud member of the BullionMax team.