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Pure Silver Coins: An Investor’s Delight

By Jonas Dorian
Published: October 12, 2007 in Silver Investing Articles,

Be it a declining dollar, fears of inflation, collector’s ambition, or pure curiosity, pure silver coins offer an opportunity. To the investor it’s alternative to paper investments, and to the collector it’s ascetic and rare qualities. Either collector or investor pure silver coins are a selection for both. And, these coins are readily available from dealers, on the Internet, and at-or-in auctions.

As a pure silver coin, the coin needs to have 90-99% of silver. Indeed, many countries, such as U.S.A., United Kingdom, Mexico, China, and Australia produce an ounce of pure silver.

Examples of these silver coins are U.S. silver eagles, to the Canadian silver maple leaf, Chinese Panda, British sovereign and the variety issued by the Australian Mints.

More for the collector, but even coins featuring famous people are available from the late Princess Diana, Marylyn Monroe; even John Wane has a silver coin minted after him.

A quick search on the net will net you hundreds of varying types and styles and mintages but all with the same theme of purse silver but in different sizes from one troy ounce up to one-kilo coins.

If you do decide to seek out and buy pure silver coin sets, then be sure to buy from a reputable dealer–or the mint directly, if possible. Ensure the quality of the coin is near proof, proof or brilliant un-circulated. Also ensuring the coin is sealed in the original container and has a certificate to go with it will help maintain the value of the coin.

Indeed, it can be heaps of fun collecting a pure silver coin or set of coins or profitable for investors. Regardless of investor or collector these pure silver coins will shine into the future.

Popularity: 62% [?]

Jonas Dorian is the Senior Editor for Silver Monthly. (7)

Silver Coin Value

By Jonas Dorian
Published: October 8, 2007 in Silver Investing Articles,

Silver coin value depends on the investor or the collector. For the collector, the rarity, grade, and demand of the coin give its value. But for an investor, a silver coin value depends on supply, content, grade, and demand; or, simply put, an investor wants to know how many coins were minted and how many are left, the percentage of silver, the quality of the coin, and the popularity of the coin.

Obviously, the investor is looking at some of the same factors as the collector, but the collector usually doesn’t use the silver content as a measure of value. To the collector, grade and rarity are much more important than any other factor. The collector will be buying the coin for her collection, not necessarily for profit’s sake–like the investor will.

For the investor, the amount of substitutes increase the value of the coin. That’s why the investor cares about the silver content more than the rarity. The silver content means, if the investor wanted, the coin could be melted down and have the silver cast into a new form of silver. For this example, a 1,000 ounce silver bar could be created from the coins. The coins have a different use, a substitute, showing the investor a second measure of value.

However, regardless of investor or collector, valuing a silver coin can be simplified to four factors: rarity, grade, supply, demand, and content.

With rarity giving coins huge price tags, many investors can be confused by believing rarity automatically means value. And speaking as an investor, rarity does not mean value. However, highly sophisticated investors will find value within rare coins. So, unless your a highly skilled investor, rare coins should be viewed solely as a collector’s item. Not an investment.

But in-defense of the collector, rare coins do fetch the highest prices. Indeed, these high prices are due to the limited number of coins: limited from the original minting or limited in circulation. For example both are rare coins a Quarter originally minted only 100, and a Dime originally minted thousands yet only 100 remain. These coins are rare because of the supply; they’re rare because of a limited number on the market and will fetch higher prices.

Similar to rarity, grade also determines the value of silver coins because high quality coins are far fewer than plain junk silver coins. Unlike junk silver, higher graded coins represent coins with higher quality. As junk silver is for investors, high graded coins are for collectors. Basically, collectors are looking for rare coins, and highly graded coins are rare.

Think of graded coins a subcategory of rare coins. Or think about a rare coin, then think about the same rare coin but with a scratch. Each coin is rare, but the first coin is much more rare without the scratch. The scratch would grade the coin lower, thus less rare. As such, the closer the coin is to un-circulated the higher grade the coin will have. Higher grade means rare means collectors will bid up the price.

Switching gears to demand, even coins face popularity contests, (at least its not as pointless as class president). More for collectors, popularity contests for coins stem from a historical significance, or ascetic beauty. Certain coins are demanded because of a special place in history, or because a coin has a beautiful design.

Now that we’ve covered most of a collector’s valuation, we’ll dive into what else an investor uses to value a silver coin. An investor will use rarity, grading and demand to determine value, but far more important is the silver content of the coin. Certain coins will have a certain percentage of silver the coin is made of.

For example the American Silver Eagle is 99.9% silver, while the 1964 Washington Quarter is 40% silver. Obviously, the silver eagle is more valuable to the investor than the quarter.

Which brings us to the conclusion, investors and collectors have different goals. Profit and a collection. And these goals give each person different factors for determining the value of a coin.

Popularity: 67% [?]

Jonas Dorian is the Senior Editor for Silver Monthly. « Previous