Investing in Gold and Silver

When investing in gold and silver for the first time, it is very easy for customers to become overwhelmed by the many options offered to them. We tend to recommend gold or silver bullion  for new investors, either coins minted by national mints around the world or bars and coins made by several reputable mints around the country and world.  What tends to lead to issues is when people end up buying things as collectibles or for numismatic values as prices can vary widely and not generally get the same return as simply buying bullion. Collectible coins and numismatics tend to be harder to sell when the time comes for you to liquidate some of your investments. 

 

Another investment option we often recommend is Junk Silver Coins.  Junk Silver Coins, also known as US 90% Silver Coins, generally refers to old US currency coins whose value is based on the silver bullion value of the silver content they contain. These are 90% silver coins minted by the US Government pre-1965 (half dollars, quarters, and dimes). New investors often incorrectly correlate the term junk silver to the condition of the coin. In actuality, 90% silver coins can come in a variety of conditions from near brilliant uncirculated (BU) to circulated (worn). US 90% silver coins are sought after based on both their silver content and currency value.  These are a great option for people who want to have smaller amounts of silver on hand.

 

Definitions:

 

Bullion is a bulk quantity of precious metal, usually gold or silver, assessed by weight, typically cast as ingots or bars, and sold by major banks and dealers. You also can buy bullion as coins.

 

Bullion coins are minted from precious metal, usually gold or silver, and bought for investment purposes from major banks, coin dealers, brokerage firms, and precious metal dealers. Their value is based on their gold or silver bullion content. Prices fluctuate daily, depending on the price of gold and silver in the world markets. Perhaps the best-known bullion coins are the American Gold Eagle, the Canadian Maple Leaf, the Australian Gold Nugget, and the South African Krugerrand.

The U.S. Mint has produced gold, silver and platinum bullion coins since 1986, and guarantees their precious metal content. The Mint produces two types of bullion coins:

  • Proof bullion coins, which are specially minted for collectors and usually sold in a protective display case directly by the Mint.

  • Uncirculated bullion coins, which are minted for investment purposes and sold to a select number of authorized buyers based on the current market price (the spot price) for the precious metal plus a small premium charged by the Mint.

 

Numismatic Value is the price you can reasonably expect to receive through the sale of a circulated, uncirculated or proof coin from your collection. The Numismatic fair market value is determined primarily by the scarcity of the coin, its condition, supply, and demand.

 

Junk Silver Coins: Like the American Silver Eagle Coins, 90% Junk Silver Coins are still official US currency and thus can be used as a means of legal tender face value payment yet it is often saved and held for the long term given the silver bullion value contained within them. Old US silver coins were once commonplace and formally part of our nation’s standard circulation coinage. Beginning from the signing of the 1792 Coinage Act continuing until silver was formally removed from large circulation coin strikes by the 1965 Coinage Act. These formerly circulating United States silver coins are sometimes referred to as: Constitutional Silver Coins, Junk Silver Coins, pre 1965 silver coins, 90% Silver Coins, or 40% Silver Coins (struck from 1965 - 1970). In the modern silver bullion coin industry, older once circulated silver coins are often sold in ‘face bags’ which measure the total ’legal tender’ face value each bag contains.

 

Coins that included silver minted by the US include:

 

  • Pre-1965 90% Silver US Dimes - includes Mercury, Liberty Head, and Roosevelt

  • Pre-1965 90% Silver US Quarters- includes Washington, Liberty Head and Standing Liberty

  • Pre-1965 90% Silver US Half Dollars - includes Liberty Head, Walking Liberty, Kennedy, and Franklin

  • Pre-1965 90% Silver Dollars- includes Peace Dollars and Morgan Dollars

  • 40% Silver US Half Dollars - includes Kennedy Half Dollars minted between 1965-1970 and also 1976

  • 35% Silver War Nickels- minted 1942-1945

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