What’s The Best Way To Invest-Speculate In Silver Coins ?

[FiveDriver]

I have some Mint State silver coins, such as the full set of Walking Liberty Halves from the 40's. But they were not purchased to catch any rise in silver prices.....they are simply a pretty coin with lots of history behind them.

I am thinking of purchasing a bag of circulated Silver coins or maybe the Silver Rounds. Will either go with APMEX or Texas PM. These would serve as a Portfolio Protector, or in the Worst Case Scenario....buy safe passage to an Island in the Caribbean (oh my !!).

 

[sengsational]

I am thinking of purchasing a bag of circulated Silver coins or maybe the Silver Rounds

Just for fun, I looked-up the spreads on pre-1965 US coins. Kitco appears to be selling for 14% above the price of the contained silver, and buying for 10% below the price of contained silver. If you add-in shipping cost, they're selling for 17% above. Their shipping charge is $30 for a 5 lb package, plus insurance, so that's a money maker for them, I'm sure.

Anyway, as I suspected, those monster spreads are still there. That has always kept me away from doing anything with PM. I only looked at Kitco because I'd done some research there for someone else.

 

[youbet]

I trade SLV and SIVR on both small moves and long term trends. It's been tough the last few years. I've made money in many areas of the markets over the decades but I never seem to be a winner when I play with PM's. Definitely would have been better off buying VTI and tucking it in for a long nap.

I haven't held physical silver for many years. The spreads are too big.

 

[Dash man]

Any idea why platinum has been cheaper than gold for so long? I know it used to be an important component of catalytic converters. A little OT but I thought this group might have an answer.

China, India, and some European countries have been increasing their gold reserves. Protecting themselves in case of a global financial crisis with all the money printing going on.

 

[meierlde]

Note that one of the reasons silver has gone down is the end of film photography. It was a major user of silver, and is now a far smaller used than 20 years ago being replaced by digital. Also I wonder how much sterling silver tableware is now purchased.

 

[Koolau]

Thanks to those revealing their trusted PM sources.

I too was surprised by the big spreads in buy/sell for used US silver coins. Sounds like the TV ads are stirring up enough demand to keep the spreads high. I've always kind of preferred the junk silver vs the silver rounds, etc. No one would question a US silver coin for trade because no one would counterfeit a US coin - too hard to do for no more than it's worth. I've always wondered about silver rounds, though. Seems they would be easy to fake, but I'm no expert. The couple of times I've sold silver rounds, the dealer didn't even question the rounds, even though they were not one of the big companies (like Engelhard or J-M) YMMV

 

[Starsky]

Just for fun, I looked-up the spreads on pre-1965 US coins. Kitco appears to be selling for 14% above the price of the contained silver, and buying for 10% below the price of contained silver. If you add-in shipping cost, they're selling for 17% above. Their shipping charge is $30 for a 5 lb package, plus insurance, so that's a money maker for them, I'm sure.

Anyway, as I suspected, those monster spreads are still there. That has always kept me away from doing anything with PM. I only looked at Kitco because I'd done some research there for someone else.

FWIW, with .9999 gold coins, you can buy them for as low as $29 over spot and sell them back at spot to APMEX - around a 2% spread (specifically Canadian Maple Leaf gold coins.) Gold Buffalo coins earn $10 over spot, but they cost at least $10 more. A more typical street markup is $45 per coin, which is still only a 3.5%-ish spread. American Gold Eagles aren't quoted online to sell back, I assume because they are 'only' .9167 pure. From what I understand about the TV gold, they sell numismatic gold at highly inflated prices to people who are not collectors and should be buying bullion at a few dollars over spot for their EOTW fund.

For Silver, one particular APMEX silver coin sells for $18.91-$19.91 based on quantity, and are repurchased for $16.82 which is $.80 over the live spot Bid price! (Specifically 1 oz. Great Britain Silver Britannia) - about 13-15% total spread - not bad considering the current spot price. I think it's a matter of shopping carefully for the right products and watching the price over spot. It varies by product a lot, changes from time to time, and some bullion coins even accrue a small numismatic value as they age.

(FWIW, the prices I'm quoting will change in real time online as the spot changes, so they won't match anything you see now, but the spreads should be similar)