Silver Coins – What to Know Before You Buy
Whether it be your first time buying silver coins or your 100th, purchasing silver can cause you to take pause and really consider options before committing.
Remember your first day of school? That panicked feeling of not knowing what to expect and hoping you don’t do anything to embarrass yourself?
Yeah, we know that feeling too!
Many new clients walk through our doors wringing their hands with that deer in the headlights look. We get it. Making your first gold and/or silver purchase can be intimidating when you feel as though you don’t really know how it all works.
That’s why we’ve outlined some things to know before you go when it comes to making your first silver coin purchase.
Our primary focus of this article is on U.S. silver coins, but there are plenty of solid foreign coins options as well, which we’ve discussed in a previous article. If you’re new to buying silver, this information may help prepare you before your first purchase, as there are several factors that should be taken into consideration.
It’s important to determine why you’re buying silver coins and what your ultimate exit strategy will be. First, let’s determine your why.
Are you purchasing silver with the intent of holding the coins indefinitely as a long-term investment? Are you simply trying to acquire silver at the lowest price possible without concern of an exit plan? Are you interested in purchasing the most marketable silver coins regardless of price? Or do you intend to purchase with the intent of possibly having to barter in the event of an economic collapse?
Most people fit into one of the above categories. If you’ve identified your “why” you’ll have a better understanding of what type of silver you’ll be in the market for.
There are many forms of silver to consider including American Silver Eagles, 90% silver US coins such as dimes, quarters and half dollars that contain 90% silver from 1964 and earlier, Morgan and Peace silver dollars issued in 1935 and earlier or lower purity coins such as war nickels or circulated foreign currency coins.
Low Premium Silver
Let’s begin with the lowest-priced coins and work up from there so that we cover all our bases. If you fall into the camp of wanting to acquire silver at the lowest possible price without regard to your ability to resell the coins in the future, some of your best options are lower purity foreign and U.S. silver coins that were previously used in circulation.
Some good foreign coin options include those minted in Great Britain, Mexico, and
Canada, as these are the most common foreign coins available in the U.S. The purity of these coins ranges from 10% – 92.5%, and as you would expect, the higher the purity, the higher the price for the coins.
Low purity U.S. silver coins that can be had for a relative bargain are 35% silver war nickels (these were minted from 1942-1945) and 40% Kennedy half dollars that were minted from 1965 – 1970.
Typically, all these listed coins can be purchased at close to the melt value of the coins, at least at the time this writing.
90% Coins (A.K.A. Junk Silver)
If you’re intending to sell your silver coins in the future and are interested in purchasing coins that are highly marketable, liquid and recognizable, we recommend the 90% U.S. silver dimes, quarters and half dollars minted in 1964 or earlier. There’s not only a liquid market for these coins but they can also be purchased at reasonable prices. The price for these coins is typically quoted as a percentage or a flat dollar amount over the spot price of silver.
These coins are also referred to as “junk silver or “constitutional coins,” as they’re primarily bought and sold for their silver content. These are also the coins of choice for survivalists or individuals preparing for a potential economic collapse, as the thought is that these coins will trade or barter for essentials in a post-collapse environment.
Morgan & Peace Silver Dollars
The next type of coins to consider are U.S. silver dollars minted in 1935 or earlier. Silver dollars minted from 1878 – 1921 are referred to as “Morgan” silver dollars and silver dollars produced from 1921 – 1935 are referred to as “Peace” silver dollars. These coins are typically sold at a bit higher of a premium than “junk silver coins,” as they have some collectible value in addition to their silver content.
In fact, some of the lower mintage Morgan and Peace silver dollars can sell for hundreds, if not thousands of dollars.
These coins are purchased by investors and collectors alike, are highly liquid, and are considered solid coin investments. As with the “junk silver coins” highlighted above, these coins contain 90% silver content.
Morgan and Peace silver dollars can be a bit more complicated for first-time buyers, as the price is dependent on the condition. As you would expect, the worse the condition, the lower the price. However, if you purchase something in poor condition, it may be more difficult to sell the coins in the future.
A good rule of thumb is to purchase Morgan and Peace dollars in fine to very fine condition. This is the most common category of silver dollars and simply means that the coins are in decent condition and should be relatively easy to sell when and/or if necessary.
American Silver Eagles
Last, but certainly not least, are the 1 oz American silver eagles. These particular coins are considered investment-grade coins. In fact, many retirement or pension funds permit American silver eagles to be held in the funds as an investment option. These were first minted in 1986, contain one troy ounce of pure .999 fine silver, and are some of the most recognized and liquid silver coins in existence.
For individuals that are interested in purchasing .999 fine silver bullion coins, there is no better option than the American silver eagles. Because of their high demand and liquidity, American silver eagles tend to be bought and sold at premiums above the other options highlighted above, with the possible exception of Morgan and Peace dollars.
These coins are recognized the world over, so regardless of your long-term plans, there’s an available and liquid market for these coins.
There are several silver coins available to investors and/or collectors alike. Depending on your needs and long-term goals, your options range from lower-priced circulated foreign coins and low purity U.S. silver to .999 fine American eagles.
Before you proceed with your first purchase, remember your reason for purchasing coins, your expected timeline, and your exit plan to sell or use for barter.
We hope you found this information helpful, and we welcome you to contact us at Atlanta Gold & Coin Buyers to schedule your first appointment and help walk you through your silver coin purchase.
Happy Treasure Hunting!