Silver Bullion – What You Need to Know Before You BuyAt the time of original publication, the article described the following:

At publication, Atlanta Gold & Coin had recently met with a first-time buyer of silver coins and bullion, spending about an hour discussing product types, premiums, demand, and each item’s liquidity. During 2020 and 2021, it reported a recent increase in new silver-coin and bullion investors. This article was intended to share the information given to that customer and make purchasing silver bullion less confusing.

This article explains silver bullion and outlines the three marketplace tiers of silver-bullion products, including their premiums, demand, and liquidity.

Introduction

For readers new to investing in silver, determining what qualifies as silver bullion can be confusing. Online sources may offer conflicting descriptions, so the original article set out to define the term. In the usage Atlanta Gold & Coin described as widely accepted in the coin and bullion trade, silver bullion means privately produced .999 fine silver made as bars, rounds, and ingots.

One-ounce silver bars and rounds are the most common silver-bullion format, although many other sizes exist, including 5 oz, 10 oz, 25 oz, 50 oz, 100 oz, and even 1,000 oz bars. Bars weighing 1,000 ounces are generally institutional-size or institutional-grade products and were rarely traded in the retail market.

Private mints or silver producers make all silver bullion, with three exceptions that the article discusses in more detail below.

Before turning to government-issued bullion, however, the original article begins by describing the three levels, or tiers, of silver bullion.

Premium Silver Bullion

Premium silver bullion comes from the industry’s best-known, most popular, and most trusted producers. The article identified Johnson Matthey, Engelhard, Pamp Suisse, and Credit Suisse as leading manufacturers. Because these makers were popular and recognizable, buyers could expect to pay a higher premium above the spot price of silver for their products.

Generally, these products could be bought at a modestly lower premium than American Silver Eagles and Canadian Silver Maple Leafs. Their premiums, however, were often comparable to other government-issued silver coins, including issues from Austria, Mexico, and the United Kingdom.

The article’s view was that, when premium silver bullion and a government-issued silver coin cost the same, the government coin was probably the better choice. Its reasoning was that the issuing country provides an implied assurance that the coin contains the precise weight and purity stated in its specifications.

It also suggested that, if a holder were outside the country in the future, a government-issued silver coin would likely be more familiar, more liquid, and thus easier to sell.

Name Brand Silver Bullion

Name-brand bullion is silver bullion made by an established mint or mining company. Dozens of recognized producers existed, including Sunshine Mining, Sunshine Minting, NTR, OPM, APMEX, Pioneer Metals, SilverTowne, and Pan American, among many others. These companies “stamp” their name or logo on the bullion they make, along with its size or weight, so the item can be identified easily.

Name-brand silver has a fairly liquid market, though its popularity is somewhat below that of the premium bullion discussed above. Buyers could therefore generally expect a slightly lower premium for name-brand products. Premiums for silver rounds and bars tended to match because interest in those two bullion formats was similar.

At the time of publication, silver-bullion premiums tended to run about half the premium charged for Silver Eagles, though supply and demand could change that at the time of purchase.

Generic Silver BullionAt the time of original publication, the article described the following:

Generic bullion is where buyers could often find bargains. It spans popular designs such as the American Buffalo and Morgan Silver Dollar, as well as bars and rounds depicting holidays, famous people, and notable events in U.S. history. In Atlanta Gold & Coin’s experience as a coin dealer, it had encountered hundreds of different designs on generic silver bars and rounds.

Because generic silver bullion can be less familiar than name-brand and premium bullion, the article stressed the importance of doing due diligence before purchasing these pieces.

The article said the best chance of success came from purchasing these items through a reputable coin dealer. At minimum, it advised confirming that a round or bar bore one of these stamps: “one troy ounce,” “.999 fine silver,” or “one ounce .999 fine silver.” It also suggested using a small portable scale to verify the item’s weight.

For reference, one troy ounce of silver weighs 31.1 grams. The article also suggested placing a strong earth magnet against bullion before purchase to confirm it was not magnetic. Atlanta Gold & Coin reported taking an additional step by testing generic bullion it bought with an electronic precious metals tester, though it noted that someone who bought silver only occasionally might not find it worthwhile to make this investment.

Silver Bullion from Government Mints

As mentioned above, private mints produce most bullion. At the time this article was written, however, three recognized government or sovereign mints also made silver bars.

At the time of original publication, the article described the following: The Royal Canadian Mint was identified as the most popular and widely recognized government mint. Its most common silver-bar sizes were 1oz, 10 oz, and 100 oz. Other sizes existed but were much harder to obtain and traded more as collectibles than as bullion.

The Perth Mint, which produces Australian gold and silver coins, also makes silver bars. Its most common silver-bar sizes were 1 oz, a kilo or kilogram, and a one-hundred-ounce silver bar.

The final government mint identified as producing silver bars was the United Kingdom’s Royal Mint. It made attractive 10 oz and 100 oz Britannia silver bars, along with less-common cast or hand-poured bars.

Summary

In summary, the article defined silver bullion and reviewed the marketplace’s three bullion tiers. Premium bullion was described as the most popular and recognizable form, so it generally carried the highest premiums. Where premium bullion and a government-issued silver coin had similar costs, the article recommended choosing the government-minted coin.

The second tier consists of bullion from name-brand silver producers. These items were described as highly liquid, although not quite as popular as premium bullion. The article said buyers could expect premiums slightly below those charged for premium products.

Finally, generic silver bars and rounds were described as popular, though they usually did not identify the item’s mint or producer. Their designs could depict many subjects, including famous people, points of interest, or historical events.

The original article called physical silver a strong addition to an investment portfolio and said it was sought after by investors and collectors. Because their silver content was usually nearly 100%, bullion bars and rounds were said to track spot-silver prices relatively closely in value.

The article said the central point when buying generic bullion was checking for a “stamp” to help confirm authenticity. When this article was originally published, Atlanta Gold & Coin said it hoped readers found it helpful and invited questions.