Guide To Buying Silver Bullion

By Author: ED Bullion
Total Articles: 3
Comment this article

This article specifically looks at buying silver bars and silver coins. Whether to consider “paper” silver or silver-backed digital currencies and the advantages and disadvantages associated with those will be explored in a future article.

All views here are my own inferred from years of stacking various silver bullion, silver bars, and silver coins. I have made many mistakes and learnt many lessons along the way. So I hope my suggestions help. I do presume some basic knowledge about investing in silver. If you have any questions, I am contactable on sales@edbullion.com. This list is far from exhaustive so apologies in advance.

1: Do your research! Buying silver from the most established bullion company may not be the cheapest (they likely have more expensive products because of higher overheads). This is important because any saving can be used to buy a few extra ounces. More experienced individuals may also choose to buy silver on the secondhand market.

2: If you are “stacking”, ...
... buy as close to spot silver as you can and always think about resale value before you buy: Physical silver can be delivered into a few categories; bars, coins, and anything else can be lumped into ingots. Premium (the price over spot silver) will largely be determined by cost to fabricate, intricacy of design, and mintage. For example, cast bars are cheaper to fabricate than mint bars so will have a lower premium. Larger bars are cheaper than smaller bars(and coins) on a per oz basis. Bullion with an unlimited mintage will have lower premiums than bullion with a limited mintage. The lower the mintage, the higher the collectability value. Even within certain mint coins, some will have higher premiums than others (whether justified or not). For example, currently, American eagles and Canadian Maples have huge premiums over other sustainable coins such as Kangaroos, Britannias, and Philhamonics despite near-unlimited mintage. Since people view these as good substitutes, a lot of people have switched from buying Eagles to Kangaroos. Recently, premiums on coins have been going up, so I have seen many people buying bars over coins which is a rational thing to do.

One further point to add is that certain low(er) mintage bars or coins might be more expensive to buy but will hold their value better even if the price of silver falls because they have collctablity value and are well shout after. For this reason, I like buying certain semi-numismatic/numismatic coins in addition to generic bars/coins even thought they might be more expensive.

3.Keep (privately) track of your purchase/invoices in a spreadsheet: This is a boring one but important if you start stacking in the 1000s/10,000s of ounces and have +50 different types of coins/bars. If you have all of the details handy and note down spot silver on every purchase, you can do a lot of analysis. For example, you can evaluate whether certain semi/numismatic coins you might have purchased were a better investment than buying generic bar. This is possible because you can calculate a “break even” price that you must sell the semi/numismatic coin at which would make you indifferent between buying that over a lower premium bar from an investment basis. For example, if the coin is valued above the break-even price, the semi-numismatic coin was better and helps will future decision-making.

When buying silver bullion, these are some of the factors that need to be considered.