Should you buy Silver Coins or Silver Bars?
The right answer requires a potential silver bullion buyer to consider a few factors aside from the silver bullion form itself.
Silver bullion product factors range from considering a slew of factors.
Things like the overall silver price per troy ounce, the silver guarantee by respective government mint or private mint, the silver purity, silver-selling privacy factors as a US citizen, silver unit sizes ranging from large bars to small coins or bars, two-way silver price spreads, product-market maker size and liquidity, overall product recognition, and more.
The best answer(s) require some research for most silver bullion bar and silver coin, buyers.
Many often choose a mix of both silver coins and silver bars.
This is, after all your hard money here. Take the time to consider some of the points below.
Which is better? Silver Coins vs. Silver Bars?
Let us begin this debate by defining both forms of silver bullion products in the 21st Century.
Silver Coins - (n) a precious metal wafer struck in a coin format by a government mint typically stamped with a legal tender face value. Sizes vary, but one troy ounce is most common and widely traded.
Silver Bars - (n) precious metal lump or ingot struck by both silver government mints and private silver mints. Typically silver bullion bars do not carry legal tender face values and cost less per troy ounce vs. silver coins.
The answer on which is better will be often get determined by the silver bullion buyers highest buying and possible future selling objectives.
Here we explain some significant differences between the two versions of new silver bullion products.
Aside from silver bars, you might also ask yourself which is better: Silver Coins or Silver Rounds?
Silver Coins: Struck & Guaranteed by Government Mints
Government Silver Coin Mints which produce modern silver bullion coins include:
- US Mint
- British Royal Mint
- Chinese Mint
- Austrian Mint
- Canadian Mint
- New Zealand Mint
- Somalian Mint
- Mexican Mint
Silver Coins are Typically Legal Tender In Their Nation-State
Governments have a monopoly on violence and also not coincidentally; they too determine what is legal tender.
And only governments can issue legal tender face values on their silver coins.
Citizens who sometimes test these facts, typically end up in prison or worse.
Silver coins usually have explicit legal tender values and carry a stamped legal tender face value on the coin and currency itself.
Do not get confused here. Most modern silver bullion coins have low legal tender face values, which have little to almost nothing to do with their real market price for silver bullion content.
Learn more about why governments almost always give bullion coins low legal tender face values it has to do with Gresham's Law.
Take, for example, a 5 oz America The Beautiful silver coin (ATB silver coin). It contains five troy ounces of .999 fine silver bullion yet it also has a low legal tender face value of a quarter dollar or 25¢ in fiat Federal Reserve note value.
No one in their right mind is trading 5 oz of highly collectible silver bullion issued by the US Mint for a smaller legal tender cupronickel quarter (legally 25¢ in legal tender face value too, but merely a few pennies in de-based cupro-nickel melt value).
Such is life when living under full fiat money rather than bullion based specie monetary standard.
So silver coins are to typically going to have low legal tender face values stamped on them.
Silver coins also typically yield higher more fiat currency per troy oz, both when you buy and sell them vs silver bars.
Let's move on.
Silver Bars for More Ounces Overall: Lower Silver Premiums
Private silver mints most often produce private silver bars.
If your highest priority is to get the most silver bullion weight for your fiat currency. Silver bars and silver rounds are going to be a better general option over silver coins.
You will yield less if you ever decide to sell come versus silver coins.
But too, the bid-ask spread between silver bars should be slightly tighter than government silver bullion coins.
Silver Selling Privacy Concerns
Is selling privacy on 1,000 oz or more of silver bullion bars vital to you?
Today's current IRS silver tax facts are essential to learning.
Scroll to the second half of this IRS Silver Selling privacy page for further information.
If privacy on large silver bullion bars sales to bullion dealers is vital to you perhaps buy silver coins over silver bars (even silver bullion rounds too as they get also treated like silver bars in large volume sales to silver bullion dealers).
Silver coins are just more private when sold within the USA.
Any silver capital gains or losses you might have, you will have to rectify with a tax professional regardless. We’re merely making silver bullion privacy points here.
Silver Coin performance during Financial Crisis?
Pay attention to the far left side ⬅ of the following Silver Coin price premium charts.
We want you to understand how each respective silver coin product was priced during the fall of the 2008 Financial Crisis.
There are no charts for how silver bars and silver rounds performed as well at the time. But no silver bullion bar or round premiums generally did better than the most popular silver bullion coins did at that time. We worked in the industry, we know first hand that fact. You can use the WayBackMachine website to confirm those claims.
The silver bar market is indeed so tiny it typically mimics but also underperforms the price premiums for government-minted silver coins.
The most likely reason is the recognition and trust factor new silver bullion buyers have with silver coins over private silver rounds and silver bars.
In a financial crisis, it is government-issued silver coins which enjoy the highest demand and largest pool of potential bidders. Financial crisis typically brings new silver bullion buyers to the market due to concerns over further losses in fiat currency savings or other stricken asset classes. This new pool of silver bullion buyers typically trusts government-issued silver coins first.
Over the following chart's near 10-year timeframe, there were also slight silver bullion product shortages in 2013 and 2015 respectively hence their rise in price premiums. But those two timeframes were not a financial crisis like in late 2008. It takes a real acute financial crisis to create silver bullion shortages.
In late fall 2008, silver spot prices hit a low of $9 oz yet...millions of the following popular silver coins outperformed silver ETFs or other inferior derivatives.
American Silver Eagle Coins - sold at about 80% over spot ($16 apiece)
Canadian Maple Leaf Silver Coins - sold at about 45% over spot ($13 apiece)
Austrian Silver Philharmonic Coins - sold at about 40% over spot ($12.50 apiece)
90% Silver Coins - sold at about 40% over their silver melt price
Silver Collectibility and Potential Product Appreciation
Are you hoping to hold products which may appreciate in collectibility value?
Lower mintage silver coins are probably the best option.
Look for high-quality silver coins with reasonable premiums and low mintages if possible.
Best Silver Coins? Best Silver Rounds?
Silver Bar vs Coin Factors to Consider
There are many additional factors to consider when buying silver coins vs silver bars. All the varying product choices in the silver bullion market require research and thought.
There really is no “one size fits all” solution when it comes to choosing and buying silver bullion products.
It is best to get your information from silver bullion buyers and sellers who actually do so in real life.
Avoid middlemen salesmen, potentially scam selling you into overpriced or even dangerous products you should never buy. Stick with popular silver bullion products to begin.
Luckily silver bullion product choices are highly variant and broadly high quality at the moment too.
We are here to help you with any questions you might have about your silver bullion choices along the way.
Write down your questions as you perform your research, and give our highly trained team a call for expert answers.
Meantime have a look at these general bullion buying tidbits and thoughts to help you determine what might be best for your needs.
And be sure to pick up our free SD Bullion Guide by email before you go.
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