How to Buy Silver
Published on 1/08/2020 by APMEX
Buying Silver can be a daunting task. There are many different options on the table for Precious Metal buyers who want to invest in Silver, and it can be overwhelming for those who don't know what they're doing. ETFs, mining stocks, Silver coins, bars, rounds… what's the best way to buy Silver?
Silver Buying: What's the Best Option?
The issue you run into with many Silver investment methods is that they don't directly give you Silver ownership.
ETFs are a packaged form of Silver derivatives. Mining stocks are shares of individual mining companies. Both are forms that some investors use because of their indirect exposure to the metal's spot price.
The spot price of the metal is the price that physical Silver trades for at that moment, but some traders (usually advanced ones who deal in options, derivatives and other more complicated financial instruments) like dealing in assets that don't have as much exposure to the spot price. This is more complex than simply purchasing Precious Metals and keeping an eye on the price, as it plays into an understanding of markets that many people don't have.
For most people, especially those interested in Precious Metals as a hedge against economic uncertainty, it can be a better option to go for the physical metal. It's much more straightforward as an investment, and there's the surety of having the physical asset in one's hands.
Types of Physical Silver
Physical Silver comes in a few different forms. One of the most common is coins. There are many historic Silver coins available, with some of the most common being the famous Morgan and Peace Silver dollars, as well as other U.S. coins. Like the pre-1964 Dimes, Quarters and Half Dollars, many of these are known as "Junk Silver." These coins are often well-circulated and in bad condition, worth only their bullion value.
There are also more recent bullion programs like the Eagle, Kookaburra, Panda and Maple. These coins are struck for their bullion value and traded for their Silver price. Coins can be an excellent way to invest in physical Silver, but they have a premium on top of their spot price. Then there are rounds like the American Buffalo, which are created in a form similar to coins but not the same. These have a lower premium than coins. Finally, there are Silver bars, which have the lowest premium. These may have stamps or identifying marks on them from the mint that created them.
Generally speaking, the larger the bar, coin or round, the lower the premium. This applies particularly to bars, which can come in much larger sizes than coins or rounds. But it's also worth noting that larger bars, coins and rounds are harder to move because of the high value. They are less liquid.