Is premium silver worth the extra money?
BearlyHere
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Two schools of thought:
Silver Eagles and premium bars get a greater return when sold.
Buy generic and get more ozt for your money.
I tend to buy generic (occasionally spending a little more for a unique or desirable design). But my challenge to the community is this...
In 1980 and 2011 when people were lined up to sell their silver, did the coin stores pay more for premium?
The answer is NO.
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Silver eagles, RCM bars sell for more because the buyer is willing to pay the premium just as the seller was. Considering that there is normally no loss on premiums paid one has better luck selling these products because the buyer pool is much larger.
Gold has a world price entirely unaffected by accounting games between the Treasury and the Fed. - Jim Rickards
Stay away from all premium silver. It all melts the same. Harder to get the premium back out as prices get higher. There are typically bigger spreads at LCS’s on the higher premium stuff. Constitutional silver is best in my opinion. Low premium and very easy to sell.
Be sure to see this thread: https://forums.collectors.com/discussion/1092898/state-quarter-silver-proof-cheaper-than-junk-silver#latest
The Right Answer is buy Boutique/Premium silver at generic silver price and sell accordingly.
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At the shop I work at, I always recommend people buy the generic silver for the cheapest price.
The only time I recommend the Eagle is on gold…
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For gold I tend to recommend Canadian Maples. Just as liquid as eagles and no duty tax if you take 9999 to Canada. Which is a bonus with us being close to the border.
For me, it depends on how you define 'premium' silver. I tend to rate silver into 3 categories. 'Premium' is the stuff that some buy at very large premiums; things like runes, zombies, silver bullets, Harry Potter, all similar gimmicks. Not for me.
At the low end, there is generic silver, with lots of different designs, but I tend to stay away because much is not identified as the source etc. Not necessarily an issue if selling to a dealer familiar with such silver and can test them if needed, but can be an issue to some as to purity, whether all silver, etc.
I prefer the in-between category... silver rounds/bars that are well known and easily identified. There are higher premiums than generic... but not that hard to get some good deals from time to time. Nothing wrong with Philharmonics, Britainias, Perth mints, etc.
And constitutional silver.... is a great way to accumulate silver. A known quality and standard of purity; easily recognized, etc.
I think it is worth the extra cost to purchase interesting items.
https://www.pcgs.com/setregistry/gold/liberty-head-2-1-gold-major-sets/liberty-head-2-1-gold-basic-set-circulation-strikes-1840-1907-cac/alltimeset/268163
Nice if you can get it.
Monument Metals sells off quality minted coins for prices very close to their cheapest generics (and frequently they are the cheapest). The neat part is they usually don't have off quality and they will fill your order with perfectly good maples or other mints. I recently got 2 orders from the with Nuie Darth Vader coins:
https://monumentmetals.com/cull-silver-government-minted-round-random-mint-and-date.html
As long as you are willing to eat the premium if you decide to sell in a skyrocketing market. Personally I'm not, but then again, I won't sell, I'll trade for gold.
Exactly what I was referring to! Monument Metals has those good deals from time to time!
If the plan is to hold tight until metals spike higher and then dump it all, zero premium stuff is best. But if you're a long term holder and are willing to trade in and out to take advantage of changes in the market, it makes sense to buy better stuff when premiums are low, and then replace it with something more junky when premiums move higher on the better stuff. Considering how volatile premiums can be, that approach can be very rewarding.
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I’ve done both really. But junk is so much more fun with the numismatic designs, etc. Years ago I would have said ASE’s and moderns, now I’m all in for junk. Junk is not junk! LoL!
The market for scarcer Engelhard poured bars has long since disengaged from melt value.
https://www.pcgs.com/setregistry/gold/liberty-head-2-1-gold-major-sets/liberty-head-2-1-gold-basic-set-circulation-strikes-1840-1907-cac/alltimeset/268163
In 1980 and 2011 when people were lined up to sell their silver, did the coin stores pay more for premium?
The answer is NO.
But did they pay less for non-premium? I believe the answer is YES.
It's not just the premium to consider, but also the spread. Both variables factor into the transaction.
In normal times, the premiums don't hurt you as a buyer. When there's a panic, those are the premiums that you might never get back.
Paid $104 for this one oz pocket piece.
But, this is an exception to the rule.
I buy as close to spot as I can …. Or a couple percentage points back, for silver. (If the opportunity presents itself). I pay premiums for collectibles but those are numismatic. Mr Eureka sums up my thinking , as it were.
When premiums are low buy the best silver. When premiums are high buy the best of the worst. By this I mean you can get really interesting silver at a discount almost all the time. Things like war nickels or scrap jewelry usually contain numerous better items or coins. Then when premiums are low trade the junk for good silver. This process will get you great coins like OMM war nickels, silver eagles, Gem 40%, and scarce world coins for close to the average spot price. You can get this even lower by trying to buy the most when silver is cheap and trade off the most when it's high and premiums are low. Try to never buy boring metal and if you must because prices are low then trade it off when there's a chance.
There's a lot of great stuff out there and it's likely to all get melted if people don't save it. I'd wager even today that much of what's being melted are coins that are quite scarce but get no attention. Sure, you don't want to sit on a bunch of Dominican Republic 1951 25c in VF because this is a pretty typical condition. But nice XF's and AU's are far from typical so there can't be very many left. Try finding a stash of 1944-D war nickels in XF/ AU. This is a tough coin believe it or not.
I have the sense that the refineries will be working overtime for years and will destroy a lot of our history that has been recorded in silver over the last half a century just like all the base metal coins, tokens, and medals. How many people are collecting Mardi Gras doubloons and what is happening to the ones wanting a home? You can't even give away collections so what chance to the common ones have?
People have a fixation on buying some specific thing so anything in fashion like 999 or silver eagles just bring astronomical prices. Sell it. Don't buy it. I've never really understood paying big premiums. My favorite thing to buy is a really nice underappreciated silver coin that just lost all its numismatic premium to higher prices. I'll buy this and sell junk so it's equivalent to trading junk for valuable coins. No matter what direction prices and premiums are going there's always stuff to buy sell and trade.
Don't forget to trade back and forth between silver and gold a little as the ratio goes up and down. I used to do this a little.
Right now might be the best of times to trade gold for silver. Of course all you can do is play the odds and there's no reason gold can't leave silver in its dust even today.
I collect the Morgan/Peace/Silver Eagles and knowingly pay more than spot. However, I buy bullion when I want the silver to keep for a rainy day. Each to their own. I buy both because that is what I like.
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The only way people will be lining up to sell silver into US dollars is if it hasn't collapsed yet. Otherwise, they will probably be going there to actually buy silver, not sell it.
Premium silver is more fun.
And that is the part that really matters!
Premium silver is more fun.
And that is the part that really matters!
Fun is fine in small enough doses, but the part that really matters is wealth preservation in the long run. For that, I don't think that you can beat 90% US coinage.
Agreed 100%. If one wants fun then people watch at Walmart or the airport.
Is premium silver worth the extra money?
For many people it is. Rare or scarce silver bars are really cool.
But I'm more of stacker and don't pay much of a premium for silver.
There certainly appears to be a market for the premium silver... they sure keep making plenty of it! But when you need to sell it....
What are we talking about when we say "premium silver" ?
Are we talking about commemoratives or numismatic silver coins that sell at nominal, modest, or rich premiums to the silver price ?
Are we talking a few purchases of those type -- or steady buying ?
As an example....I have bought a FEW of the National Park Saint-Gaudens Commemoratives....some of the patterns and other experimental models created by ASG and his underlings that were never made.
With silver at about $20-$30 on average.... I purchased a few of them for about $60 on average. I'm not a silver stacker or collector but if I were I would not buy them all the time as my silver of choice, obviously. Buying MSDs or other classic coins would be better than moderns and/or commemoratives.
You make a good point! Premium silver like Silver Eagles might get a little more value, but back in 1980 and 2011, coin shops didn’t pay more for it. They’re more concerned with weight and purity. If you're just lookin' to get the most silver for your cash, generic’s the way to go. Premium stuff is more for collectors or folks hopin' for bigger returns later on.
Premium silver - Fabricated collector items. Bullion is not considered premium silver.
Silver premium - the price over spot that one pays for any silver item.
All silver item prices are based on current spot price plus the premium added by the seller or the market.
Gold has a world price entirely unaffected by accounting games between the Treasury and the Fed. - Jim Rickards
Only buy premium silver if you cannot live without that specific piece.
It won't be easy to get your money back, even after a long time.
Komsco stackers are the ones that have my eye. Pay $88 for 2oz of silver is a bad deal any way you slice it, it's only OK for me since i like them.
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Especialy now. Many of the wholesalers are up to their ears and LCSs are taking losses to sell their inventory back. This has been reported by many of the better YouTube metal commentators (Silver Dragons, Silver Seeker, etc...).
Every once awhile, some of the metal houses will have ASE's and Maples for 4 or 5 bucks over spot. I've picked up a few on occasion.
I interpret the term "premium silver" to be items of recent manufacture that cost more than a few dollars per ounce above the current "spot" price.
There is a whole other category that I call "vintage silver" (bars and rounds). Premiums on those can be quite high, even $1,000 per ounce or more. This market is similar to rare coins in that regard. Prices can go up or down quite a bit from one sale to the next. But overall, the vintage silver bullion market has been pretty hot for several years now (especially from about 2015 to 2022).
If the market remains saturated with 90%, I wonder how much will get melted?
Excellent summary of the vintage silver bar and round market.
https://www.pcgs.com/setregistry/gold/liberty-head-2-1-gold-major-sets/liberty-head-2-1-gold-basic-set-circulation-strikes-1840-1907-cac/alltimeset/268163
I buy rare silver bars just like rare silver and gold coins. I don't even think of them in terms of melt or a function of melt. For the right items, know your market, your margins, and your exit strategy. If buying common stuff, focus on timing premiums.
I traded all my silver eagles out when premiums were over 50% the price of silver (no brainer!) - this made it easy to gain more ounces. The same was true for proof gold.
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By premium, I wasn't referring to vintage..More like Germania, Scottsdale, and novelty special editions.
The only modern premium silver I like are ASEs since they're the most liquid and likely to hold and capture on exit. You can also time the premiums to swap out of them to gain ounces fairly easily if you play your cards right. Now is a great time to stack ASEs.
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ASE's are the most affordable they've been in quite a while. It's my understanding that junk is flooding the market and pre 65 is at the lowest premium in years. If you want weight, look at constitutional silver. Monument and Hero have been offering the best prices. Occasionally SDB will blow some out.
I buy these and fill them up with tubes:
im selling them at my store for 36 , i would not pay more than 27 each . That spread is too wide to make them a bargain
note that 36 bucks for an ASE is about $1.50 less than the online price but the buyers are paying cash
I put out some generic 1 oz rounds for 34.50 and they were ignored.
from this I conclude if i buy generic 1 oz I have to pay 25 or less which buyers refuse . So avoid generic don't pay more than 36 for ASE's seems to be the rule.
generic is cheaper but you lose the difference when you sell it back its probably a wash monetarily but generic doesn't excite anyone so its a harder sell
I sell more junk silver at 25 I bought some at 20 saturday
somebody could do a lot of math and decide given current prices what was the best buy but premiums expand and contract in strange ways so a few years down the road who knows.
Always buy junk , and sell it yourself on facebook marketplace would be my theory of silver. don't sell to a BM and buy at a show seems the best way to narrow the spread maximize on both ends
I just did a little math assuming I spent 1000 at my buy prices and sold that amount at my sell prices and math says I would do best investing my 1000 in generic rounds
In the real world that doesn't work.
not many buyers try to sell me generic so it wouldn't happen for one thing. WhenI do sell generic in the store its heavily design dependent buyers might like a single round and reject the other 10 based on cool factor. Lowering sell price won't encourage any sale of unappealing designs at all.
Next best is ASE's but buyers want certain dates at times and don't seem to like the new design so want to pay less. I don't like the new design either so we agree there . They do sell steadily but they only trickle in . If the guy walking in wants more but I can't really justify paying more, I might offer a buck more but thats it.
Junk silver is the lowest return on investment but there are intangibles , no loupe coming out to look for hairlines , as long as it isn't slick it trades . I find it the easiest to sell so I'm willing to work on a tighter spread and let the volume do the work.
Thing about generic rounds to remember is that generally only old geezers what that and if you stack it be prepared to sell only to 2 or 3 geezers . The passage of time is erasing the pool of buyers . No one under 50 cares about your englehardt prospectors , no one over 12 cares about your pokemon rounds , no one over 1 or under 99 cares about your 25mm cannon shell round at any price
just to put a finer point on the old geezer pencil....................... if your exit strategy depends on a pool of geezers in oxygen masks pulling up to the handicapped spot out prepare to be very disappointed
stacking > @jmski52 said:
If it's a panic that results in "BUY," then premiums on top end sovereign mint coins and bars would like go higher as more "panic stricken" buyers flock to the market. Being new, the first piece of advice they will find is "buy quality products (quality producers)."
Cheap product are cheap for a reason.
Exotic products have a very small buyer pool. Buy only for your collection.
Gold has a world price entirely unaffected by accounting games between the Treasury and the Fed. - Jim Rickards
there is one way premiums absolutely harm the buyer .
They can turn your brain into jello !
For example "I won't take less than 5000 for this ultra rare toned 3.45 oz silver bar. " I'll have you know its one of only 2 vaguely similar featureless lumps of metal of this exact size with the writing stamped at a slight angle thusly!
And then you lose your home because you mistakenly believe a random chunk of metal is some incredible rarity.
So you don't sell and then later after a slow painful death your heirs get 10% back of spot and wonder what was wrong with you . But they just chalk it up to all those years you painted cars without a respirator or summat
You certainly wont recover premiums selling lumps of gutter to dealers per se. You have to find another collector that believes the supposed rarity has some extra premiums. You can do so at places like ebay but after all the fees and potential fraud its hardly worth the trouble. I've always shook my head when I see people paying these premiums but to each their own. People got to stack or in this case collect whatever makes them happy. RGDS!