There are so many physical silver bullion products on the market today that it can be a bit overwhelming. But I hope that with today’s Energy and Capital, I can show you exactly which physical silver bullion products are best for your portfolio.
To begin, we’re going to classify all physical silver bullion into two main categories:
- Monetary silver bullion
- Non-monetary silver bullion
Monetary Silver Bullion
Monetary silver products include all silver bullion products that are/were government-issued as legal tender. These would include products like the American Silver Eagle, the Canadian Maple Leaf, and silver coins originally intended for circulation.
The American Silver Eagle is, without a doubt, the most recognized and trusted silver bullion product in the world. It is IRA-eligible and among the most liquid of physical silver bullion assets.
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A downside that investors often see in the American Silver Eagle, however, is the premiums.
Every bullion product has a premium (an extra cost over the metal’s spot price) attached to it. American Silver Eagles currently carry a $2 to $4 premium over CME spot prices, which is a bit higher than some other government-issued bullion products. However, what you’re paying for is the Silver Eagle’s world recognition and ease of liquidity. And that simply makes paying the premium worth it.
Another great silver product for investors right now is the Canadian Maple Leaf. The Maple Leaf is also widely recognized as one of the purest and most trusted physical silver bullion products in the world. And the premium is just a bit lower for Silver Maple Leafs than for Silver Eagles.
Personally, I own both. But here’s where you have to be careful, especially when looking to buy Silver Maple Leafs…
Both the American Silver Eagle and Silver Canadian Maple Leaf series have special releases that should not be any concern for investors. For example, one of the biggest gimmicks the Royal Canadian Mint has in the Silver Maple Leaf series are coins stuck with what they call “privy marks.”
The reverse of these coins features a small privy mark just to the left of the left of the maple leaf stem. Have a look…
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Now, even though the privy mark on these coins looks very minor, they cost a hell of a lot more. Some are even selling up to an 800% premium over CME spot prices! APMEX is currently asking $145 for a 2007 Canadian Silver Maple Leaf with the F12 Privy (photo above). That’s because these coins are minted in limited quantities. And ultimately, these coins are intended for collectors.
So when buying American Silver Eagles or Canadian Silver Maple Leafs, investors really want to stay away from any special releases like the Royal Canadian Mint’s privy-marked coins.
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There are many other government-issued silver bullion coins for investment, like the Mexican Silver Libertad and Austrian Philharmonic. Most are going to carry a higher premium than the Silver Eagle or Silver Maple Leaf. And all of them will be slightly less liquid. So for investors looking for physical silver bullion products, the Silver Eagle and Silver Maple Leaf are the best choices.
Lastly, I also need to mention silver coins that were originally intended for circulation, such as pre-1965 U.S. dollars, half-dollars, quarters, and dimes (called “junk silver”), which are the most widely known and available.
I used to be very much into owning junk silver as an investment. Several years ago, you could actually find junk silver coins selling slightly below the value of the metal contained in them. However, in recent years, the premium for junk silver has increased significantly.
Personally, I do own some junk silver — but only a very tiny amount that is ultimately insignificant to my overall bullion portfolio. Being as premiums are much higher today, I think American Silver Eagles or Canadian Silver Maple Leafs are better for investors.
So as far as monetary bullion coins, I recommend Silver Eagles or Silver Maple Leafs.
Moving on…
Non-Monetary Silver Bullion
Non-monetary silver bullion is simply silver bullion that is/was produced by a private mint and is not legal tender. These are mostly referred to as “silver rounds.”
Twenty years ago, there were only a handful of private mints producing non-monetary silver bullion. Today, however, there are way too many private mints to mention.
The major advantage of non-monetary silver bullion is the incredibly low premiums. As I mentioned on Friday, SDBullion.com is offering one-ounce random silver round for just $0.49 over CME spot prices.
The major disadvantages to silver rounds include the fact that they are non IRA-eligible and they can be less liquid than government-issued monetary silver bullion. However, for some, the low premiums are very attractive.
I also personally own silver rounds. But again, silver rounds represent a very small portion of my overall bullion portfolio.
In conclusion, the best physical silver bullion to buy right now is non-special issue American Silver Eagles and Canadian Silver Maple Leafs. These products offer the lowest premiums and have the best liquidity.
Luke Burgess
Energy and Capital
