Three shiny silver bars in nest

Bars, Bullion & Coins: Which Type of Silver Could Be Right for You?


Written by Philip Diehl

Nov 2, 2016

Like gold coins, silver coins have been a commonly accepted form of currency for thousands of years. Silver was first used as a currency in 700 B.C., notes The Silver Institute, and has long held a special place in currencies around the world, from the Greek drachma (which contained an eighth of an ounce of silver) to the Roman denarius and the British pound sterling.

Today, people all over the world continue to be fascinated by silver’s many qualities. Silver is appealing as a safe haven asset, but also for its utility as an industrial metal and its aesthetics as a metal of beauty. People have long prized silver jewelry, but also have incorporated silver coins, bars, and bullion into their portfolios, estate plans, and even their Individual Retirement Accounts. In fact, they’ve been doing so at record rates. Coin and bar demand increased to 9,092 tons last year, up 24 percent year over year and reaching the highest annual demand level since 2013, reports the 2016 World Silver Survey.

If you're new to precious metals ownership, though, you may be wondering: How do you know which type of silver to choose? Are some types of silver better than others? Read on to learn more about the various types of silver and which one could be best suited for your financial goals.

Silver Bars vs. Bullion vs. Coins

Why Buy Silver Bars?

Demand for silver coins and bars hit a record high last year, according to the World Silver Survey. Globally, purchases of physical silver bars increased 24 percent over the previous year to 4,920 tons, another record high. In the U.S. alone, silver bar consumption rose 25 percent year over year.

Bars are generally ideal for high-volume silver diversification. Bars are rectangular slabs of .999 pure silver, typically produced by private mints, and easy to stack and store. Due to their size, bars offer novice silver buyers a unique way to build their precious metals portfolio—fast. When time is of the essence, buying silver bars is one of the quickest ways to maximize the volume of your precious metals portfolio.U.S. Money Reserve 100 ounce Silver Bar

Between 1971 and 1981, the U.S. dollar lost more than half of its value while silver prices rose nearly five times, reports The Silver Institute. No one can predict whether this will happen again. But if it does, would you be prepared? The 100 oz. Silver Bar is .999 pure silver and one of the most cost-efficient storage solutions to date. Affordable security is just a click or call away!

Why Buy Silver Bullion Coins?

The word “bullion” refers to precious metals in bulk form, with the price of bullion coins being tied directly to the commodities market. The price of a silver bullion coin is determined by both its metal weight and the current spot price of silver. These coins lend themselves to being more optimal for a short-term holding strategy than certified silver coins, as they tend to behave more like a commodity.

This could be a key factor in the recent uptick of silver bullion interest. “Unlike gold bullion coin sales, which ebbed and flowed with the gold price, quarterly sales of silver bullion coins have remained solid since 2010,” reports the World Silver Survey. In fact, in the second quarter of 2016 “sales of silver coins were so strong that almost all key mints had to put their silver bullion sales on allocation, with many bullion dealers indicating lead times” that were stretched from near immediate delivery, to 3 to 4 weeks.

Silver bullion coins are available in an array of sizes, from 1/25 oz. to 1 kilo, with the most popular option being the 1 oz. coin. Examples of silver bullion coins include the 1 oz. Pearl Harbor Silver Coin and the 1 oz. Silver American Eagle. Many of the bullion coins sold by U.S. Money Reserve are authorized legal tender from the U.S. Mint and are guaranteed by the U.S. government for their silver content, weight, and purity. These coins are also small, easy to store securely and secretly, and easy to transport if need be.

Why Buy Certified Silver Coins?

Certified silver coins are different from their bar and bullion coin counterparts in many ways. One important way they differ from bullion coins is in how they're evaluated and graded based on their rarity and state of preservation. The price of a bullion coin is, in large part, tied to the spot price of silver, while the price of a certified coin is also tied to its numismatic value. One of the key benefits to holding certified coins is the fact that they offer insulation from spot price volatility, since their melt value comprises just one part of their upside potential.

(A quick note for precious metals novices: when we say spot price, we're referring to the current market price at which silver or gold is bought or sold for immediate payment and delivery. The spot price differs from a forward or futures price, which indicates the price at which gold or silver may be bought or sold for in the future.)

When graded, a certified coin's condition and rarity are evaluated by a third-party grading service, like Professional Coin Grading Service (PCGS). A certified coin arrives in a sonically sealed plastic slab with a unique registration number that you can use to verify the coin's authenticity at any time, online or over the phone. The most popular certified silver coins include the 1 oz. Silver American Eagle Proof Coin (first strike) and the 1 oz. Mint State Silver American Coin. These coins are authorized U.S. legal tender and are guaranteed by the U.S. government for their weight, content, and purity.

Due to their grading, rarity, and insulation from spot market volatility, certified silver coins can better achieve greater potential when held for long periods of time. By nature, their scarcity allows for increased potential.

“Being in a rush when buying or selling will lead to poor results,” says former President of the Professional Numismatists Guild, Jeff Garrett. “How long you are willing to hold your coins is a major element to being a successful” coin holder, says Garrett.

If you're looking for short-term growth, however, bullion coins, could be a better choice for you.

Silver's Enduring Appeal

Whether you're buying silver as a hedge against inflation, as a means of potentially growing your existing pool of wealth, or as a means of financial survival in the event of a financial crisis, you'll be joining a centuries-long legacy of silver ownership when you make your purchase. Call U.S. Money Reserve today at 1-844-307-1589 to learn more about this diverse, time-tested precious metal. Our experienced Account Executives will provide you with a one-on-one consultation to help you better understand which type and amount of silver may best fit your financial goals.


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