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A Guide To Buying Silver Coins

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A Guide To Buying Silver Coins

Investing in precious metals like gold and silver is a good move in questionable economic times. Unlike paper money, metal generally retains a high value even when inflation strikes. Though gold is prohibitively expensive for many investors, silver is much more affordable.

If you are interested in buying silver as an investment, there are several different ways to go. You can buy a variety of silver coins (also called bullion), or you can buy silver bars.

What Are Silver Coins?

When investors talk about silver coins, they are normally referring to coins minted by various governments and with official guarantees of weight and purity. These coins can generally be purchased directly from their mints or from precious metals dealers. Three of the most popular one-ounce silver coins available today are the:

When buying silver coins directly from their mints, you will pay a percentage over the value of the silver in the coin. This is the coin’s premium and includes costs of melting and minting the coin, as well as dealer commissions and an extra percentage due to the coin’s collectable value. The premium tends to rise and fall along with demand and availability of silver.

By shopping around, you can purchase silver coins online for lower premiums, including through dealers such as eBay, First Federal Coin or Modern Coin Mart.  You can also buy silver coins through local precious metal dealers. If you wish to invest in silver coins, it is very important to find a reputable dealer that will take time to explain the complexities of the coins to you.

What Is Junk Silver?

Despite the name, junk silver is not garbage or “junk” at all. Junk silver refers to US dimes, quarters and half-dollars minted in 1964 or earlier. These coins were in regular circulation, and thus are no longer in the pristine condition desired by collectors of silver coins. Junk silver is 90 percent silver and 10 percent copper and is valued purely for the value of the metal it contains.

For example, a junk dime might have a melt value of $2 based on the weight of its silver. Most investors in silver recommend beginners start with junk coins, as they are highly available; have lower premiums than new coins; and can be purchased in small quantities, making them quite affordable. Like new silver coins, you can purchase junk silver through precious metals dealers, online coin markets, eBay or even local pawn shops, antique stores or flea markets.

To figure out the value of junk silver coins, you can divide the face value (for example, 10 cents for a dime, and 25 cents for a quarter) by 1.40. Then multiply that number by the current value of silver. So the silver value of a quarter with a current price of $34 per ounce of silver would be .25/1.40 x 34 = $6.07. Generally, if you have a mixture of junk silver coins equaling $1.40 in face value, that handful of coins will contain roughly an ounce of silver.

What Are Silver Rounds?

Silver rounds usually look like regular coins, but are not issued by government mints and have no value for circulation. They are purely for investing in silver. Silver rounds are produced by private metal companies such as Apmex and are less expensive than government-issued silver coins, as without collectable value, the premiums are much lower. Silver blanks are similar, but have no design pressed into the metal, subsequently costing even less over the value of the actual silver.

What Are Silver Bars?

Compared to buying silver coins, buying silver bars is quite straightforward. Silver bars come in a range of sizes, from a tiny 5 grams up to 100 troy ounces. Most are stamped with their weight and percent silver, typically .999 percent. Though the US mint does not currently produce a silver bar, some other governments, including Canada, do mint bars. You can buy bars of silver through online precious metals dealers and from from private mints and local dealers.

In a precarious economy, many people favor the security of solid, tangible investments such as gold and silver over unpredictable paper currency. If you would like to start investing in precious metals, silver is a very affordable way to start building up a nest egg that could protect your family in case of an economic meltdown.

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