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A Beginner's Guide to Buying Physical Silver

We get deluged with questions here at Private Briefing. And it's no surprise to me that the bulk of them are excellent queries. We answer them in different ways … some by writing back to the subscriber … and some as secondary topics in the daily column.

Many of your questions – like the dozens of requests we recently received about graphene – lead to actual recommendations or even special reports. Other queries will form the basis of "roundup-style" Q&As with our band of experts.

Every once in a while, however, we'll get a question that's so good, or that's so representative of other queries that we're getting, that it deserves a standalone answer.

And that's precisely the kind of question that we recently received about buying physical silver from Andy F.  It was on a topic so popular I decided to share it with our Money Morning readers as well.

Andy F. writes:

    "Bill, I know this is a very basic question, but you have me interested in silver. My question is … what kind of silver? I like the 999.9% rounds and bars, but is it better to purchase coins with 40% to 90% content?

    Then, if I go that route, do I buy cull, junk or do I need to learn collector values?

    I really like the simplicity of the 999.9%, as I have little interest in collecting unless the value difference is there. I also like the liquidity and simplicity of selling when I am ready. I am enjoying your work, thanks!" – Andy F.

Although it is a basic question Andy, it's also a very good one that we believe a lot of our other subscribers will be interested in.

I also turned to our resident mining, natural-resources and commodities expert Peter Krauth, editor of the highly successful Real Asset Returns advisory service, and here’s what he had to say… 

Join the conversation. Click here to jump to comments…

About the Author

Before he moved into the investment-research business in 2005, William (Bill) Patalon III spent 22 years as an award-winning financial reporter, columnist, and editor. Today he is the Executive Editor and Senior Research Analyst for Money Morning. With his latest project, Private Briefing, Bill takes you "behind the scenes" of his established investment news website for a closer look at the action. Members get all the expert analysis and exclusive scoops he can't publish... and some of the most valuable picks that turn up in Bill's closed-door sessions with editors and experts.

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  1. RetireFund | March 12, 2013

    You mentioned the Canadian Maple Leav silver coins, a great place to collect silver with more purity than most coins, however you failed to mention where to buy silver bars and coins in Canada.

    As Opposed to the U.S., silver bars and coins can be purchased from a bank, specifically, the Bank of Nova Scotia or their investment arm, Scotia Macotta. Just alk down to the local bank and tell them what you want in the form of silver bars. You can pay with a credit card, and your shipment is secure as it can get in any country, backed by the Bank of Canada

    • William Patalon III | March 12, 2013

      Great comment … we have a lot of readers in Canada … in fact, Real Asset Returns Editor Peter Krauth lives and keeps his office there, in part to be close to the many natural-resource companies that he covers.

      Thanks for taking the time to post this … I think you've probably helped a lot of folks with that question.

      And that's acting in the true spirit of community that we want to nuture and grow here at Money Morning.

      Great note.

      William Patalon III
      Executive Editor
      Money Morning & Private Briefing

  2. Benton H Marder | March 12, 2013

    First, a minor correction. The bags/buckets are of $1000 face value of dimes, quarters, halves struck before 1965 contain the 715 ounces troy weight of silver. These coins are 90%.
    In addition to the 'junk silver', and the Eagles and Leafs, another possibility exists—-struck rounds by Sunshine Mint, which makes the planchets used by the US Mint for the Eagles. These go for a lower premium than the Eagles. One way to go is to work up some of each, depending on what can be found and afforded. I hear that the supply of pre-1965 coins in bulk is starting to tighten up. People buy a lot of this but don't sell. In theory, the junk silver might have more practical application when the bumfodder and magnetism just go 'Poof!', vanishing like the Avar. It is going to happen, folks. We don't know when., but it is going to happen.

    • William Patalon III | March 12, 2013

      Mr. Marder …

      Great post. Thanks.

      Your last point, in particular, is why we like silver in general, and "junk" silver in particular.

      Well said……

      William Patalon III
      Executive Editor

  3. Gerald Lewis | March 12, 2013

    I own physical silver in several forms, however, I always hear it is easy to buy and sell. The BUY is obviously easy but the sell leaves open the following question. Other than selling to the original source, other than coin and jewelry dealers, where else can silver (all forms) be easily sold?
    If silver were to take off in price, what is to stop dealers, retail coin and jewelry shops, from conspiring to mark up fees and commissions to lay persons trying to sell their silver?

    • DD | March 12, 2013

      Gerald – I too own some silver (not as much as I would like) and a very small amt of gold, but your concerns are also the same as my concerns. I don't want to get ripped off with mark up fees etc., when the time comes to sell.

      Can anyone reading this shed some light on our concerns at all?

  4. croploss | March 12, 2013

    One thing to consider with bags of "junk silver" coins is that you may be getting a certain "face value" but it has been my experience that at least some or even many of the coins are worn "washers" that only contain about 2/3 of the original amount of silver due to wear. Try to buy Franklin or Kennedy halfs or Washington quarters and Rosevelt dimes to minimize this, or simply insist on purchase by the ounce not face value.

    • William Patalon III | March 12, 2013

      Another useful tip … well done, "croploss" … thank you for taking the time to offer the other readers the benefit of your personal experiences.

      Let's hear from you again!

      William Patalon III
      Executive Editor

  5. Tom | March 12, 2013

    I think you should look at Bullion Dealers.
    Bullion Vault in London will look after your metal for a reasonable rental fee and no worries about security.
    Another big plus, is the fact you can trade it as freely as you like on line, even when they have gone home for the night, as it were.
    Be aware that 'Bots' are roaming and will suck up anything that looks tasty, so box clever !

  6. jim e | March 12, 2013

    Selling American Eagles are easy. I have sold on occasion thousands of dollars of Silver Eagles to APMEX for about $1.30 over spot.They publish the buy prices on their site.

  7. Ken T. | March 12, 2013

    Last month I bought $125 face of 'junk silver' from Silvertowne (search for their site, not sure if allowed to post it here) and was very happy with my purchase. They provide free shipping and you can buy as little as $5 FV. Here's a breakdown of what I received. 140 Washingtons 1960-1964 (110 were 63 or 64 in unc or au), 75 no date standing liberties, 10 readable dates standing liberties(dates are one of the first things to wear on these coins) 7 readable date Barber coins, one 1856 seated liberty in AG3 and the rest in various year Washingtons with half of those from the wartime 40's. I had only one 'washer' barber that fell below the weight because of wear at .171 oz t of silver (4 would be .684 instead of .715 and that was it silver weight, not coin weight) I paid 23.45 times face for these coins when spot was at $31.45. Maybe I got such good coins since was a first time buyer, I know I got a better price from what is listed on website since I paid cash (wire transfer) instead of credit card and ordered by phone. Only thing I hate is silver fell after I bought on a 'dip' lol, but I'd still do it again as I see it going much higher down the road :)

  8. silver bug | March 12, 2013

    I check to get the spot price and a round up of best silver prices around the web. Also has the lowest premiums next to provident….

  9. anonymous | March 12, 2013

    So is sterling silver a good investment?

  10. Ann Novak | March 12, 2013

    I found your article on silver very informative. I have a question on silver 100 oz. bars? Are
    Engelhard Bars still being made? What are some other names in quality silver bars?
    I thank you ahead of time for updating me.

    • Ken T. | March 13, 2013

      Engelhard was bought by BASF in 2006 and no longer makes bars I'm afraid.

  11. Tajine | March 13, 2013

    The Perth Mint (perthmintdotcomdotau) has a large selection of coins & bullion and offers free shipping worldwide on any online orders worth over $AU400. Their silver is 99.9%, gold is 99.99% and platinum is 99.95% mint guaranteed.
    Although the current silver price is around $28AU their selling price for a 1 oz silver coin is almost $39Au but they will buy it back for only $27Au (as of March 13 2013) That's the price you pay for a struck coin I guess. A silver bar on the other hand at 10 oz is selling for $307Au but their buy back is $266 so you can see that you have to pay quite a bit more to get into the market but at least you know that they will buy back at just below the spot price.
    Once silver spot prices rise above your purchase price you'll be cheering on for more rising prices. Get in now whilst the price isn't moving i reckon.

  12. Andy Schuck | March 13, 2013

    My understanding is that if YOU take possession of your bars, that when you sell them they will have to be assayed, as opposed to leaving them in a secured vault and you not ever having possession.
    If for only that reason I have purchased Maple Leafs which I understand are easy to verify as not corrupted by using a strong magnet, a sensitive gram scale and a set of calipers. (All of which I have already done)

  13. B. Dean | March 14, 2013

    For those that want a great place to SELL as well as BUY: EBAY. I also use APMEX to BUY. If im buying a small amount Ebay is usually better, many have free shipping.

  14. Jim | March 16, 2013

    Nice article and good comments and questions. Online and live auctions do offer buying and selling opportunities, but you need to be an educated and informed consumer to use these services. There are also some short term and long term trends that are at play: for instance, Englehard bars sell at a premium because, as one poster noted, the company no longer exists and their products have become collectible. On ebay, Morgan and Peace dollars (other than culls) typically bring a 20% premium over spot for common circulated coins. So, there are other cheaper ways to play the anticipated rise in silver. And, of course, if you are working with funds from a retirement account, you are limited to bullion coins. There are many "mom and pop" local stores that can be good to deal with. So start out small, do research and study the markets, and be careful about responding to ads in the newspaper that typically have very high shipping and handling fees and be careful about radio ads. As one poster noted too, know your price going in and getting out. You really need the price of silver (or gold) to go up at least by 33% ($10 at current values) before you can make money by buying and then selling.

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