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Why are Silver Coins Different Prices?

When you shop with a respected online Precious Metals retailer like APMEX, you have the opportunity to see an enormous inventory of Precious Metals products. You may notice the huge variation in Silver coin prices and wonder how items made of the same raw material can vary so greatly in price and value. Today, we are going to examine some of the factors that play into the varying prices of Silver coins.                                     

Silver coin prices range from modest to extravagant based on several considerations, including:

  • Metal content by weight and purity
  • Number of ounces purchased
  • Payment method chosen
  • Supply and demand factors
  • Government seigniorage fees
  • Mintage or population numbers particular to that coin
  • Mintage year or other numismatic factors
  • Condition and type (BU, proof, collectible, colored, privy, graded, etc. )
  • Secondary market sales volumes and prices 

The most popular Silver bullion coin in the world, in terms of overall sales, is the one-ounce American Silver Eagle Coin issued by the United States Mint. Its popularity is closely seconded by the Royal Canadian Mint’s one-ounce Canadian Maple Leaf Coin. These two most prominent coins account for over 500,000,000 Silver bullion coins produced and sold since their launches in 1986 and 1988, respectively. In fact, since the year 2000 over one billion ounces of government Silver coins have been produced and released onto the worldwide Silver market. It’s important to recognize the substantial 169% increase in government-issued Silver coin sales that began with the worldwide financial crisis of 2008. The desire for Physical Silver coins, Silver bars and Silver rounds has actually increased since the end of 2008.

How are Popular Silver Coin Prices Determined?

Listed here are the main factors in determining the price point of a popular Silver coin.

#1 Silver Spot Price

The Silver spot price is the up-to-the-moment price of Silver exchanged on global commodity markets.

#2 Coin Seigniorage Fee of Issuing Government

A seigniorage fee, or premium charged by a government issuing the currency, is often collected by government mints when issuing physical currency both to recover production costs and generate revenue.

#3 Silver Dealer Premiums

The supply chains used by even the most reputable dealers add a premium to Silver coin prices. The expenses associated with buying, storing, inventorying, hedging, marketing, selling and securely shipping Precious Metal products are part of the business overhead that factors into the necessary premium.

Silver coin prices also depend on several other ever-changing components, including:

  • The current supply and demand factors for Silver bullion.
  • Economic conditions and geopolitical climate.
  • The volume of Silver tied up in commodity futures.
  • The type of Silver bullion coins available for purchase.
  • The goals and objectives of both the buyer and seller.

Supply and Demand for Silver Coins

The supply and demand of any given Silver bullion coin strongly influences the premium it can command on the retail market. Silver coin dealers are businesses, and put work into balancing their Silver coin inventory perfectly. Too many Silver coins can lead to added trouble and expense, but too small an inventory in Silver coins can lead to customer dissatisfaction. Shopping with APMEX is fun because we are fortunate to have an amazing facility that allows us to keep an astoundingly large inventory stock on hand with a minimum of fuss. It’s easier for us to balance our responsibilities for the coins with a huge inventory!

When Silver spot prices are calm, demand for Silver coins is generally calmer, too. Thus, Silver coin supplies tend to increase across the industry. This is when smart retailers have sales and promotions to stimulate buyers and perhaps expand their market share. Increased economic demand for Silver coins naturally attracts more buyers. This means that Precious Metal retailers can raise their prices both to prevent running out of inventory and to capture larger profits.

How Economic Conditions Affect the Price of Silver Coins

The global financial crisis of 2008 stimulated massive movements in the Precious Metals markets.

For example, the premium commanded by the one-ounce American Silver Eagle rose to more than 80% over the Silver spot price by late 2008 and was still the premium was still about 40% over Silver spot in early 2009. Since then, the U.S. Mint has on occasion necessarily frozen production of the American Silver Eagle to allow industry bottlenecks in Silver planchet production to catch up with the public demand for American Silver Eagle Coins.

Number of Silver Coins Being Sold

As previously mentioned, the Precious Metals business comes with overhead. Many coin dealers and Precious Metal retailers calculate their cost per transaction. So, while every transaction incurs a fee related to the cost of doing business, the price per coin tends to be higher on small volume purchases, and lower per ounce on high volume buys. The per-transaction cost can be spread out over many ounces that way. Some sales, however, have fixed costs regardless of the size or volume of the sale. Depending on the set up of the company, a transaction for a single one-ounce Silver coin may take up the same manpower and time as transaction of 1,000 pieces. Others sales costs are variable costs associated with the size of the transaction. Shipping and insuring a 100-ounce bar is more expensive than shipping and insuring a 10-ounce bar.

Type of Silver Coin Being Sold

Official, government-issued one-ounce Silver bullion coins in Brilliant Uncirculated condition will typically have a noticeably lower premium than the same coin in a privy, proof or graded version.

As we’ve discussed, the most popular Silver bullion coin in the world is the American Silver Eagle coins. The United States Mint charges authorized dealers $2 per ounce over Silver spot for each one-ounce American Silver Eagle coin. Other high-quality numismatic coins from the U.S. Mint typically command higher premiums and much sport lower mintages than the Silver American Eagle coin. The higher premiums on collectible coins are ultimately paid by the numismatic Silver coin buyers, but numismatic coins are far different from investment bullion.

Silver Coin Seller Objectives

Anyone selling a Silver coin, whether it is a private citizen or a large company, likely wants to make the largest possible profit from the item. If you have a Silver coin to see, consider these factors when setting the price of your item:

  • Market supply
  • Market demand
  • Competitive sales data

A too-high price will drive buyers away as they seek a better deal, while a too-low price fails to realize the appropriate profit. Do your due diligence when selling Silver coins to maximize your reputation for fairness as well as your profit.

How to Sell Silver Coins?

Sellers need to find the “sweet spot” for the price of a Silver coin, where the time required to complete a sale is properly compensated and the profit is maximized but the piece is attractively priced to buyers. We suggest a tool found under eBay’s advanced search setting. Using the “☑ Sold listings” option, you can search the most recent final sale price for a specific item. Please do note that eBay is likely a cost prohibitive option for selling lots of Silver bullion coins as they charge 10% of your overall sale for using their service. You do have the option of selling your items locally, but there will be a smaller potential customer base.

We hope this helps you understand why different Silver coins are priced as they are, and that you can maximize either your profits or your investment dollar with your new understanding of Silver coin pricing.

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