Updated on 02/07/17
No precious metals portfolio is complete without an allocation to silver bullion.
Like gold bullion, it’s a reliable safe-haven investment in any financial climate. But silver has some unique qualities that have made it valuable for thousands of years—and continue to push its value higher.
Because of these attributes, silver holds the potential for both protection and profit.
This guide explains everything you need to know about silver coins as an investment and which of them make the best investment.
Why you need silver in addition to gold
Why buy silver when you can buy gold?
For one, silver holds more value than just as a currency. While gold has virtually no industrial applications, silver’s uses are growing at a staggering rate.
Silver is used in everything from laptops and mobile phones to solar generation—meaning demand will not drop off anytime soon. As supply is squeezed further and further, anyone holding a meaningful amount of silver is poised to be in a very good position.
The other big reason to buy silver is its price point.
Given silver's current price relative to gold makes it a great option for smaller investments. And because the silver market is highly seasonal, it’s easier to anticipate a good time to buy (September and November tend to be the best months).
Silver vs. gold – the pros and cons
Here are some of the pros and cons of investing in silver vs. gold.
- The entry price for silver is a lot lower than gold, making it easy to get into the market.
- Silver is not yet as popular as gold among mainstream investors, making it easy to get into the market early.
- Silver has a lower spot over premium than gold. If you’re spending under $1,500, you’ll get more for your investment.
- Silver is in demand for industrial applications as well as investing, giving investors exposure to multiple value drivers.
- While there are many gold mines, there are few primary silver mines. Silver’s demand could easily outpace its supply—which can send prices skyward.
- Because of its low price relative to gold, silver is highly liquid. In a worst-case scenario, it would be much easier to use silver as a currency for average purchases than gold.
- Silver’s price is a lot more volatile than gold (though this is less of a concern if you take the approach of averaging into your position).
- Silver bars and coins contain a lower concentration of wealth than gold, which means $10,000 of silver is going to take up a lot more space than $10,000 of gold.
- Unlike gold, silver is not bought by central banks. If the economy crashes, silver is likely to suffer due to its many industrial uses.
How to buy silver coins
A coin is a coin is a coin, right? When it comes to silver coins, the answer is no.
The trap many new precious metals investors fall into when they buy silver coins is trusting a dealer who is trying to sell them numismatic (rare/collector/proof) coins.
The value of these types of coins is based more on rarity or historical significance than silver content, and should only be purchased for collecting, not investing purposes.
Collector coins are a niche market and therefore largely illiquid.
There’s also a sub-category called “semi-numismatic” coins. These are 99.99% pure coins but tend to be commemorative, such as the Canadian Wildlife series or Australian Lunar series.
They command higher premiums, which you may not recover when you sell—if you can find someone to buy them.
Don’t fall into the trap of buying silver coins that give you no real value. The best way to buy silver coins is to:
- stick strictly to silver bullion
- do your research to find a reputable dealer
- know the spot price so you can judge what’s a fair premium
- be sure your dealer has a guaranteed buyback policy
The best silver coins to buy
Now that you know what not to buy, here are the products we most recommend for investors looking to buy silver coins:
American Silver Eagle Coin
First released by the US Mint in 1986, the American Silver Eagle is the official silver bullion coin of the United States. It is minted only as a 1-oz. coin and is 99.9% pure silver. Because the Silver Eagle is legal tender, its content, weight, and purity are certified by the United States Mint. It features the iconic “Walking Liberty” design by Adolph A. Weinman.
Canadian Silver Maple Leaf
Issued annually by the Government of Canada and produced by the Royal Canadian Mint, this 99.9% pure silver coin is legal tender. It has a face value of five Canadian dollars. The Silver Maple Leaf’s front is imprinted with the profile of Queen Elizabeth II. Its back features a maple leaf—the national symbol of Canada.
Austrian Silver Vienna Philharmonic
The most well-known silver bullion coin from Europe, the Silver Vienna Philharmonic, is made annually by the Austrian mint. It was first minted in 2008 to celebrate the Vienna Philharmonic orchestra. It is one troy ounce of .999 fine silver, guaranteed by the Austrian government. The design features the Musikverein Golden Hall's Great Organ.
Great Britain Britannia
A relatively new coin, the silver Britannia was first issued by the Royal Mint in 1997 and has tax advantages for residents of the United Kingdom. In addition to the 1-oz. coin, the Britannia is also issued in fractional sizes of one-half, one-quarter, and one-tenth of a troy ounce. Since 2013, the coins have a purity of 99.9%. The bullion version of the coin always features the classic standing Britannia (the proof versions have featured a different design each year since 2013).
Why buy silver coins and not bars?
While any type of precious metal bullion is a better investment than paper currency, silver coins do offer a few advantages over silver bars.
Coins have the status of legal tender, which means their weight and purity are guaranteed by the governments that mint them. And unlike bars, if you want to liquidate some of your silver, coins require no authentication to sell.
In worst-case scenarios, you can easily use silver coins as money to buy goods since they are a convenient and tradable size.
Silver bullion belongs in all portfolios, especially for new investors. Silver coins are low risk, easy to resell, and should make up the largest portion of an individual’s silver holdings.
What to avoid when buying silver coins
Like the gold market, silver investors face their fair share of cons and scams when shopping for bullion. From shady dealings to telemarketing rip-offs, there are lots of ways for a dishonest seller to trick investors out of hard-earned savings.
Here are the most common ploys to avoid:
If someone offers to sell you bullion for less than the spot value of the precious metal content, it’s either counterfeit or stolen. There’s no reason anyone would sell silver for less than the spot price.
If a company cold calls you to get you to buy silver coins, you’re probably in for a high-pressure, too-good-to-be-true sales pitch. Don’t fall for unusually low prices and limited-time offers designed to pressure you into a sale.
eBay & Craigslist
There’s nothing stopping sellers from making fake accounts to drive bids higher or misrepresenting what they are selling. With all of the trustworthy online precious metals dealers out there, there’s no reason to assume that risk.
The smartest investors hold both gold and silver in their portfolios. Silver is just as precious as gold and shares many of its traits. It’s a store of value, an inflation hedge, and protection against economic and financial system crises. Silver’s unique qualities and low prices make it easy for any investor to get into—and benefit from—the growing market.
Ready to grow your silver holdings?
Buy the highest quality silver bullion coins for delivery or secure storage—direct from a dealer you can trust. The Hard Assets Alliance offers a range of silver products to meet all of your investing needs. Browse our selection of silver and gold bullion and get started today!