Is Now the Time to Buy Silver Coins?

November 7, 2012 | By | Reply More

Before we go into the question of whether now is the time to buy silver coins, it is worth noting that silver has risen from under $5.00 an oz in 2003 to over $30.00 an oz at the time of writing.

In just less than ten years it has enjoyed a 600% rise while in the interim it came within a whisker of $50.00 an oz. It has far out paced gold over the period and along with the yellow metal, it is still in a long term bull market.

Silver is Volatile

Silver is a tiny market compared to most other marketable commodities and because of this it is a highly volatile investment vehicle that not only appeals to speculators only intent on short term gains but also to governments and their banking and Wall Street friends wishing to manipulate the gold market through its close ties to the rise and fall of silver prices.

In short it takes far less money to significantly move the silver price than it would with gold. The dollar firms up when gold weakens and vice versa.

The attraction of the Fed and others in their efforts to maintain the value of the dollar by shorting silver is obvious and possibly irresistible, the doubt is there but who knows!

Silver More Cost Effective Than Gold

What cannot be denied is that continuous priming of the money printing pump must eventually significantly devalue any currency and the dollar is right in the firing line.

Savvy investors are constantly looking for ways to preserve their capital, with gold top the top pick. There are problems with gold, such as storage, collection and insurance, but perhaps the principle downside is the cost.

Over $1700.00 for only an oz. plus a premium on top for coins, is a drawback to all but the wealthiest of investors particularly as many small investors rightly embrace the idea of not having ‘all their eggs in one basket’.

Even a reasonable holding in GLD the leading gold holding ETF, will cost a bundle. It is not that long ago when the US government sequestered all gold holdings, including coin. Whose to say in these exceptionally difficult financial times some government whizz kid will come up with the same idea again.

Silver Coin Easy to Trade

In terms of capital outlay silver offers a far less expensive way of joining in both metal’s long term bull run with far less fear of government confiscation.

Although buyers of any type of physical silver should consider the cost of storage many investors like the idea of holding, seeing and feeling their precious metal holdings. Some even appreciate their ability to trade with their local coin dealer, maybe turn a little profit the quick way when they need some ready cash or even use eBay.

This is where silver coins come into their own. Of course you can trade gold coin with dealers but the money involved is much greater. Silver coin prices allow you to steadily build up your stash without keeping you short of readies.

Buy Recent Silver Mintings

What silver coins should you buy?

Unless you have the time to extensively research the silver coin market while possibly missing out on an appreciating market and are confident that you can trade with a reliable trustworthy coin dealer who will give you sound advise, we advice you to stick with newly minted silver coins.

You will expect to pay a premium but it will be less than on a ‘collectible’ which may not always hold its rarity value. In other words stick with coins that only give you the value of the silver they contain.

The most common and possibly the most interesting way of collecting silver coins are to buy US minted coins, or those of any other nation where you can find the dates related to their silver content. In the US you can buy silver content coin by the bag or half bag by weight.

A half bag weighs around 28 lbs but will cost in excess of $11,000.00. The bag will contain half dollars quarters and dimes minted between 1917 and 1964 all of which should contain 90% silver.

Buying silver bags requires a substantial capital outlay but all of these coins plus dollars minted between 1878 and 1935 contain 90% silver and can be bought and sold individually at your local coin dealer.

There is a simple formula that you can apply to avoid being ripped off. The dates are all important.

To recap US silver dollars minted and dated between 1878 and 1935 contain 0.78 oz of silver. These denominations have to be dated 1917 to1964, the half dollar contains 0.37 oz silver, a quarter 0.18 oz of silver and a dime 0.07 an oz of silver.

Simply multiply the amount of silver in the coin by the current price of silver and add the dealers premium which should be no more than 10% at the most and you have the value of your silver investment in that coin.

For example a half dollar would have a silver content worth $11.10 with silver at $30 an oz.

Some coins minted between these dates have a collectable value so you may get lucky and find one that will boost your investment but right now with silver trading around $31.00 an oz., nearly $20 of its peak last year seems a good time to enter this interesting and potentially highly lucrative market.

Is now the time to buy silver coins? Yes and good hunting.

You will expect to pay a premium but it will be less than on a ‘collectible’ which may not always hold its rarity value. In other words stick with coins that only give you the value of the silver they contain.

Pros & Cons of Buying Silver Bags

The most common and possibly the most interesting way of collecting silver coins are to buy US minted circulated coins, or those of any other nation where you can find the dates related to their silver content. In the US you can buy silver content coin by the bag or half bag by weight.

A half bag weighs around 28 lbs but will cost in excess of $11,000.00. The bag will contain half dollars quarters and dimes minted between 1917 and 1964 all of which should contain 90% silver. Buying silver bags requires a substantial capital outlay but all of these coins plus dollars minted between 1878 and 1935 contain 90% silver and can be bought and sold individually at your local coin dealer.

 

Use This Simple Value Formula

There is a simple formula that you can apply to avoid being ripped off. The dates are all important. To recap US silver dollars minted and dated between 1878 and 1935 contain 0.78 oz of silver. These denominations have to be dated 1917 to1964, the half dollar contains 0.37 oz silver, a quarter 0.18 oz of silver and a dime 0.07 an oz of silver.

Simply multiply the amount of silver in the coin by the current price of silver and add the dealers premium which should be no more than 10% at the most and you have the value of your silver investment in that coin. For example a half dollar would have  a silver content worth $11.10 with silver at $30

Keep in mind the silver price fluctuates, sometimes as much as a dollar or two, or even more within hours, throughout 24 hours in world markets so keep right on top of the price when buying or selling at your dealers. You can be sure he is.

Watch Out For Collectables
Some coins minted between these dates have a collectable value so you may get lucky and find one that will boost your investment but right now with silver trading around $31.00 an oz., nearly $20 of its peak last year seems a good time to enter this interesting and potentially highly lucrative market. Is now the time to buy silver coins? Yes, we think so for the long haul and good hunting.

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