Gold and Silver Facts
Here you will find some basic Gold and Silver facts that every precious metals investor should know. Gold and silver coins and bars come in a variety of weights and designs. A number of sovereign mints (national mints of countries. i.e. United States, Canada, South Africa, Australia, etc.) as well as private mints and refiners produce gold and silver coins, bars and bullion for the investing market. To help you make sense of the many investing options available, we have provided the following brief summary of Gold and Silver Coin and Bar facts.
Fisher Precious Metals offers a large inventory of gold and silver coins, bars and bullion at industry leading prices. Investing in gold and silver is an excellent way to provide diversification and precious metals have become a standard asset class for many investment portfolios. Many gold and silver coins and bars are eligible for inclusion in Precious Metals IRAs. (See our IRA Page.)
Types of Gold and Silver Coins
There are two basic types of gold and silver coins: Bullion Coins and Numismatic Coins
Bullion Coins
Gold investors usually buy gold and silver bullion coins because their prices are completely transparent and their liquidity is typically excellent. Their price is determined by the spot price and a cost that is added to cover 1) the cost of production, 2) distribution and 3) retail sale. This cost that is added to the underlying spot price and is referred to as “premium” and is the price at which these coins trade in the marketplace. Bullion coins contain a 90% (as a minimum) to as much as 99.99% (considered pure) gold content.
Numismatic Coins
Numismatic gold and silver coins are typically purchased by coin collectors and speculators. These coins have significantly higher volatility than bullion coins and do not enjoy the same liquidity. Speculators will utilize the numismatic volatility in an attempt to profit and rare coin values are subject to many factors outside of the gold or silver spot price. Much like fine art, true numismatists (collector coin experts), are generally lifetime coin collector enthusiasts who have acquired years of specialized knowledge sharpening their skills.
Buying Gold and Silver Wisely
First, all gold and silver items that you buy should meet two prerequisites, low premium and high liquidity. You want the best of both worlds. Yes, you can find ultra-low premium items, but often their demand is poor and hence their liquidity. You can also find items that have very high liquidity, but their premiums are much higher than one need pay. So, here are our recommendations for both gold and silver that enjoy the best of both worlds. Although specific suggestions may change, this list has been largely consistent for many years:
Gold (maximum 6% premium over spot)
- Canadian Maple Leaf – 1 oz. and 1/2 oz. – The 1 oz recent year gold Maples Leaf’s feature state of the art authentication technology known as Bullion DNA Digital Authentication.
- US Gold Eagles – premiums are typically 1.5% more the Maple Leafs cited above. Although the most popular coin in the United States, the US Mint is more expensive than any other world mint
- South Africa – Krugerrand – 1 oz
- Gold Bars enjoy approximately a 1% premium savings over sovereign gold coins, just buy a reputable mint brand such as Royal Canadian Mint, Valcambi and Perth Mint.
Silver (Maximum 15% premium over spot)
- Pre-1965 U.S. 90% silver coins – Dimes, Quarters, Half Dollars (referred to as ‘junk’ silver)
- Canadian Silver Maple Leaf – 1 oz coins, recent years contain the Bullion DNA Digital Authentication technology.
- Silver Eagles – again 4% more expensive than the Maple Leaf
- Generic 1 oz. (in round form, referred to as ‘rounds’)and 10 oz. silver ingots. Make certain they are from a COMEX approved refiner which also makes them eligible to be placed in Precious Metals IRA’s
- 100 oz. silver bars (COMEX and IRA approved only)
Some items are missing:
- Mexico – 50 Peso too large and poor secondary market
- Australian – too thinly traded
- Chinese – too many counterfeits
- Italian, Spanish, Latin & South American – limited secondary market
Choosing the best gold or silver coins for your investing objective will depend on multiple factors including your geographic location, the importance of privacy when selling gold coins back to gold dealers and the premiums on BOTH the buy and the sell side.
If you are considering converting an IRA to gold or silver, please see our IRA section to review the allowable coins for your fund, or better yet give us a call to discuss.
