There are many people out who are thinking about buying silver in the near future. Unless you are a seasoned silver investor, knowing which type of silver to purchase is the right choice can be daunting, especially since there are so many different ways to invest in silver.
The term physical silver refers to silver that you have actual possession of. You can hold it, you can store it, because you own it. This is the most traditional way of owning silver, and by far the most popular. Physical silver allows buyers to have access to their silver at all times.
Silver bullion is simply silver that is refined to a certain purity level. This is the most common form of investment-grade silver around, with purity levels ranging from .999 to .9999. The price of silver bullion is determined by market forces, and the spot price of silver is based upon 1 troy ounce of the metal. There are different ways of investing in silver bullion, each of which has a different benefit.
Silver bullion coins are produced by government mints. They carry government backed assurances for their weight and purity levels, and have the additional benefit of being legal tender. Silver bullion coins most often contain 1 troy ounce of silver, which makes their value easy to keep track of since the silver spot price is always quoted in terms of dollars per ounce.
For those looking to make a substantial investment in this shiny white precious metal, then silver bullion bars represent the best opportunity to purchase silver at the lowest premiums above the spot price of silver. Additionally, silver bars are rectangular in shape with flat surfaces, which make them ideal for optimal storage since they can be stacked on top of each other. Silver bars are minted in a variety of sizes, from as small as 5 grams and as large as 1000 troy ounces. One of the most popular choices among those who intend to hold silver over the long term are 100 troy ounce silver bars because they offer the combination of buying silver at a low premium that can be easily stored.
Privately minted silver bullion rounds are similar in shape and content to a silver bullion coins. They contain 1 troy ounce of silver, and are refined to a purity of .999 or greater. However since they are not minted by governments, they do not carry face values and thus are not legal tender. As the demand for silver has increased in recent years, so have the premiums on popular government issued coins like the American Silver Eagle. Silver rounds offer an alternative to silver bullion coins since they usually trade at lower premiums.
Numismatic silver coins are also way that individuals can buy silver. The Morgan Silver Dollar is a great example of a numismatic silver coin. It was minted in such large numbers that a good amount of these coins still exist today. They are highly prized by coin collectors, and some are extremely valuable if they contain certain dates or mint marks. Spotting these rare coins can require a great deal of knowledge and effort, which may not necessarily be of interest if you simply want to be exposed to the rising price of silver.
Yet another way to purchase silver is through 90% silver coins, also known as junk silver. Buying junk silver coins offers great flexibility to investors. They can buy small increments of silver, while at the same time enjoying the premium discount of buying silver in bulk. These junk silver coins can be purchased by the bag, and include commonly circulated U.S. coinage with dates of 1964 and earlier that were in circulation. The half-dollars, quarters, and dimes of this period contain 90 percent silver, which make them worth several times their original face value.
In the end, silver can be purchased in many different forms. The right type of silver to buy largely depends on the needs and objectives of the investor. For those who are relatively new to silver, then silver bullion coins may be the best choice because of their assurances. Bars and rounds may be appropriate for those who wish to avoid high premiums. Old silver coins can have additional collectors value in addition to their bullion content, and junk silver coins offer flexibility. In the end, the choice is up to the individual.