For investors who want to capture the coming move in silver, buying silver bars or coins is still one of the best options.
Like gold, investing in silver is a great hedge against inflation and financial turmoil alike. It's why demand for silver is increasing at an astonishing rate.
In fact, says Money Morning Global Investing Strategist Martin Hutchinson, "If silver were to match its 1980 peak, adjusted for inflation, it could climb as high as $150 an ounce."
For savvy investors who hold physical silver in bars or coins, that move would deliver roughly a 328% gain from today's spot-prices.
Investing in Silver Coins
Of the two, buying silver coins is a bit more challenging because there are so many different ways to purchase them – including rare coins.
But while rare collectible silver coins are often attractive and sometimes bring in big prices when sold, their value is quite subjective, as they are tied to a number of largely intangible factors like scarcity, wear and quality of appearance.
Rather than becoming a rare coin collector, most investors would be better off purchasing bullion coins if their intent is to ride the silver bull market.
The United States Mint produces several bullion coins in silver. The most popular is the one-ounce American Eagle, which can be purchased direct from the Mint in uncirculated condition.
At a recent price of $45.95, these coins sell at stiff premium to spot silver prices. But there's also a large aftermarket, where the coins trade at smaller premiums.
The same is true for the Mint's commemorative issues, such as the one-ounce 2012 Infantry Soldier Silver Dollar, recently priced at $44.95.
The Royal Canadian Mint also produces several silver bullion coins such as the half-ounce Year of the Dragon $10 coin. However, these coins also carry a similar premium when purchased directly from the Mint.
Despite the premiums, the guaranteed purity, beauty and liquid market have made U.S. Mint offerings highly popular. In 2011 alone, 39,868,500 ounces of silver were sold by the Mint.
How to Buy Silver Coins from a Dealer
All of these government-produced bullion coins are also offered by the major precious metals dealers, often at prices well below the original issue price.
For example, the American Precious Metals Exchange (APMEX) sells the Canadian Year of the Dragon half-ounce coin at a premium of just $1.35 over the spot silver price, depending on the quantity purchased.
APMEX (apmex.com) also operates its own mint, producing silver (and gold) coins in a variety of sizes.
The most basic AMPEX bullion "silver rounds" sell for premiums as low as $1.00 over spot, with prices adjusted regularly to reflect changing conditions in the global metals markets.
Other private mints that produce similar silver coins with competitive prices include Sunshine Minting Inc. (SMI), Englehard and Johnson Matthey. Many of these mints also produce silver "blanks" – coins with no design or engraving – in various sizes, which offer investors perhaps the closest coin in value to silver itself.