Physical silver has long been considered a precious and valuable asset ever since its discovery. The U.S. government first minted silver dollar coins in 1792, and a century later, the first American Silver Eagle coins were released by the U.S. Mint.
Now tens of millions of American Eagle Silver bullion coins are sold each year.
Recent investor demand for American Silver Eagle coins has increased significantly over the past decade. In fact, sales of one-ounce American Silver Eagle coins reached a record 47 million in 2015, according to the U.S. Mint. Such high demand has played a key role in the spike in silver prices. Silver is up about 10% in 2016.
Owning physical silver is a good way to profit on that price rise. Before buying, here are six facts about the American Silver Eagle coin you should know.
American Silver Eagle Coins: Things to Know
American Silver Eagle Coins, Fact No. 1: They Are the Only Silver Coins Allowed to Fund an IRA
Since the American Silver Eagle is the official investment-grade silver coin in the United States, it is allowed to be used to invest in IRAs. Not only that, but large investment markets all around the world accept these coins for investment purposes. Investors can benefit from heightened privacy because American Eagle Silver coins don't need to be reported on an IRS 1099 form.
American Silver Eagle Coins, Fact No. 2: The Value of American Silver Eagle Coins Is Mandated by the U.S. Government
Each American Eagle coin has a nominal face value of $1 and is made up of one ounce of 99.9% pure silver, as mandated by Title II of the Liberty Coin Act of 1985. They are the only silver bullion coins to be guaranteed by the U.S. government and certified by the U.S. Mint in regards to their weight, purity, and content. Each American Eagle silver coin is minted as per specifications by the U.S. Mint, which makes them more easily identifiable and more accurately compared to other types of silver bullion coins.
American Silver Eagle Coins, Fact No. 3: Three Different Versions of American Eagle Silver Coins Exist
The U.S. Mint makes three versions of American Eagle Silver coins: the bullion version, proof version, and uncirculated collector version. Public investors can buy the bullion version through authorized purchasers, which include banks, brokerage firms, wholesalers, and dealers, while proof and collector versions can be purchased from the U.S. Mint.
American Silver Eagle Coins, Fact No. 4: Bullion Coins Are Different from Collectible Coins
The value of silver bullion coins versus collectible coins is not the same. Collectible coins are determined by what a dealer is willing to pay for it, and not necessarily by the actual value of the coin's silver content. As such, the value of collectible silver coins will vary greatly from one day to the next. On the other hand, the resale value of silver bullion coins is determined by the actual content of the silver in the coin.
American Silver Eagle Coins, Fact No. 5: They Are Still a Good Investment Hedge
During times of economic uncertainty, it helps to know that at least a portion of one's investments are hedged against the risk of devaluing. Owning silver bullion has long been hailed as a wise way to hedge against inflation and recession. Silver bullion coins are tangible, rare investment assets with an intrinsic value that people will always find value in, regardless of the current economic situation.
American Silver Eagle Coins, Fact No. 6: They're Easy to Invest In
The aftermarket for American Silver Eagle coins is a strong one. Among the many factors that make a sound investment is the ease in which assets can be bought and sold, and American Silver Eagle coins fit the bill. They can be easily purchased and sold through an authorized dealer, and are much more affordable than gold coins. American Silver Eagle bullion coins are recognized around the world, making them highly liquid and easily traded.
The demand for physical silver has realized great strength over the recent past and is expected to continue to grow. According to Money Morning Resource Investing Specialist Peter Krauth, silver prices are expected to hit $18 by the end of 2016.
Find out more about why silver bullion makes a sound investment and download our report: The Essential Guide to Buying Gold & Silver today.