Isn’t the term silver bullion coin an oxymoron? Bullion is defined in most dictionaries as gold or silver in mass, or its original form, or as the Old English Dictionary puts it “as distinguished from coin or manufactured articles”. So if bullion describes the precious metal prior to being struck, what is a bullion coin?
One source defined it this way: “Precious metal bullion: Any refined precious metal, such as gold, silver, platinum, and palladium, which is in a state or condition where its value depends primarily upon its precious metal content and not its form.” This pretty much answers the question. Silver bullion coins are valued according to the content of the silver and not the prettiness or significance of the coin.
In other words, for the investor, a silver bullion coin is probably a better choice than a fine, rare silver coin with less than pure silver content. This coin is valuable to a collector for its numismatic value. Silver bullion coins are the best way for an investor who wants to invest in silver for its investment qualities: safety, easy storage, and liquidity.
Many people today are investing in silver bullion as a way to hedge inflation. Precious metal investment has historically been the best way to protect one’s wealth. The rationalization for this is that if the economy collapses, silver or gold can be used to buy goods and services. For these reasons, the best investment is silver bullion coins.
This investment is “safe” because you own the actual, physical asset and store it yourself. Depending on where it is stored, you can have access any time. In addition, government issued silver bullion coins are legal tender; however, their face value may be substantially less than the value of the silver itself.
U.S. Silver Bullion Coins
The official silver bullion coin of the United States is the American Silver Eagle coins. The silver Eagle dollar has a face value of one dollar, but contains one ounce of .999 pure silver. Today, an ounce of silver is valued at approximately $26.00, or 26 times the face value. These coins are the only coins whose weight and purity are guaranteed by the United States government. Current mintages of these coins usually carry high premiums; however, older coins have a value closer to the spot price of silver.
Investing in silver bullion coins, those generally minted for investment purposes, is an excellent way to protect your wealth and increase your precious metals holdings.