Investing in Physical Silver. Published July 2012.
One of the reasons so many investors found their wealth decimated in recent years was not just because the global markets crashed, but because the majority of investors were investing in the same places. Once panic set in, almost every area of investing was negatively affected as money was withdrawn and demand plummeted. There was no diversity in portfolios, beyond stocks and real estate, which led to the endemic loss of wealth. What investors need at a time like this, is a safe haven to act as an anchor against such falls. Gold and silver have provided that anchor for the past decade and can go on doing so for the next decade.
We believe that most investors should hold up to ten percent of their personal savings in physical silver. By this we mean silver in the form of coins, bars or rounds that you take physical delivery of and can store in your safe or in a safe deposit facility of your choosing.
At the end of 2001 silver was $4.58 per ounce. At a recent price of $27.45 per ounce silver has climbed 599%. Over the same period, gold has climbed from $279 an ounce to $1,584, a gain of 568%. Investor demand for both metals has generally softened since the height of the economic turmoil in 2009, and silver has traded in a narrow price range since April, 2011. However, most investors have no idea that the uses for silver in industry and technology have grown so much over the past decade. Demand for silver has moved from wants to needs, making silver less vulnerable to economic slowdowns than in previous market cycles.
Silver is used in electronics, medicine, solar energy, water purification, air travel, chemistry, jewelry, coins, batteries and by the military. The way silver is used in industry makes it hard to replace even if the price were to double or triple from its current level. Inside every cell phone and other electronic device on the planet are tiny trace amounts of silver with a value of fifty cents to five dollars. If the price of silver were to double, the manufacturer would still only need one to ten dollars worth of silver in a product that has a retail value of between $200 to $2,000. So even at twice the current price, silver would still be relatively inexpensive and would continue to be irreplaceable as the best conductor of electricity.
Technological advancements using silver in new ways are boosting demand even further. One new use for silver is in fabrics to help kill bacteria. When the silver is activated by a minute amount of sweat, it becomes an antibacterial agent. This can be used on cruise ships that lose millions of dollars a year in revenue through the spread of viruses. It is already being used in polyester sportswear. Again, only trace amounts are being used in each item but this soon adds up. Reports suggest that up to 1,200 tons of silver are being used in 50 million tons of polyester annually. To put this figure in to perspective, the U.S. Mint produced a record forty million silver eagle coins in 2011 which is equal to 1,244 tons of silver. These new uses for silver make it uneconomical to recover it from items unless the price exceeds $100 an ounce. This is creating an even greater demand for silver.
Silver is both a precious and industrial metal
Silver is irreplaceable because of its unique properties
China is encouraging its citizens to buy physical silver in the form of coins and bars
There are no large stockpiles of silver left
You can own 57 ounces of silver for every ounce of gold
The Euro could collapse at any moment
The world economic conditions that have sent the price of silver soaring are still in place
Silver is trading 43% below its recent record high of $48.70 per ounce
Silver Bullion Rounds – Low cost! Secure! Retirement Account Acceptable!
We think silver bullion rounds should be a core holding in any silver bullion portfolio. Silver bullion rounds are the low cost way to buy silver. They are easy to buy, easy to sell, and trade for a low premium above the price of silver. In short, you get more silver for your dollar when buying silver bullion rounds than when your buy Silver Eagles or Maple Leaf coins. Why pay a premium of up to four dollars per ounce to buy a Silver Eagle when you can buy the same silver weight in the form of a round for only a one dollar premium? Silver bullion rounds are liquid investments traded daily by all silver bullion dealers. Certain ISO certified and brand name silver bullion rounds qualify to be held in retirement accounts alongside Silver Eagle and Maple Leaf coins. Silver bullion rounds come in a variety of sizes from one tenth of an ounce up to one hundred ounces. They are most commonly traded in a one ounce format. Each round is hallmark stamped guaranteeing its net weight and silver purity. Rounds are easily stacked, stored and counted and are ideal for first time buyers and seasoned investors alike.
What are Silver Bullion Rounds?
Silver bullion rounds are a cross between bars and coins. They usually have a set weight of one troy ounce of silver (31.103 grams of 99.9% silver). Silver rounds are produced by a multitude of private mints in the shape of a coin, but have no status as legal tender. Rounds are hallmark stamped guaranteeing their weight and purity.
What is legal tender status?
Silver bullion coins like American Silver Eagles and Canadian Maple Leafs are issued by governments and are legal tender for the amount stated on the coins. Despite having legal tender status they are not expected to be used as money because their silver value far exceeds their face value. An American Silver Eagle has a face value of just $1 but is made from one troy ounce of silver that has an approximate value of $27.00. Silver rounds are privately minted for investors and often have designs that resemble famous coins, people and places. Typically silver rounds sell for a lower premium than government issued coins.
How do silver bullion rounds differ from silver bullion coins?
For counterfeit and vending machine protection, private mints in the United States are not allowed to strike coins/rounds with the same diameter as United States Mint issued coins. Silver bullion is marketed in Troy Ounces, 1 Troy ounce = 31.1 grams. U.S. Mint Silver Eagle bullion coins contain 31.101 grams of silver; silver bullion rounds also contain 31.101 grams of silver but are minted to a different diameter and thickness. Silver bullion coins like American Silver Eagles and Canadian Maple Leafs are issued by governments and are legal tender for the amount stated on the coins. Silver rounds are privately minted for investors and often have designs that resemble famous coins, people and places. Typically, silver rounds sell for a lower premium than government issued coins.
Are silver bullion rounds and silver bullion coins .999 silver?
Yes both bullion coins and bullion rounds are commonly minted from .999 fine silver. They both have the same net weight but are slightly different sizes.
Why do silver rounds sell for a lower premium over silver than American Silver Eagle coins?
The United States Mint does not sell its bullion coins directly to the public because it is not capable of maintaining a two-way market. A two-way market means that the seller will also buy back the coins at prevailing rates. Instead, the United States Mint distributes the coins in bulk, through a network of official distributors called Authorized Purchasers who, in turn, mark them up and sell them to secondary retailers. In many cases this means you the investor are the fourth person in the chain! The U.S. Mint, the authorized purchaser and the coin/bullion dealer have all made a mark-up before you buy! When you buy silver rounds from us, you are cutting out these middlemen, which lowers the premium over silver that you have to pay.
Are some silver bullion rounds more valuable than others?
Silver bullion rounds are offered in both brand name and generic form. Certain ISO certified and brand name silver bullion rounds meet the standards and are acceptable for inclusion in retirement accounts. These rounds may be slightly more marketable and may have a higher premium above the price of silver. Unless otherwise stated, all rounds offered by Westminster Mint qualify for storage in licensed depositories and retirement accounts.
What is the advantage of buying silver bullion rounds over other forms of silver?
Silver bullion rounds are a safe, low cost and convenient way to own silver. They are easy to buy, sell, count and stack. They are portable, offer privacy and take up very little storage room. They are especially convenient when measured against other silver investments. When measured against silver coins they have the same weight and purity but can be bought for a much lower premium above the price of silver. Prices vary from dealer to dealer but often you can save $2 per ounce in premium buying rounds versus coins. This means on a purchase of one-hundred rounds, you could be getting seven ounces of pure silver FREE. Because of the high margin, many bullion dealers promote $1,000 face value sacks of 90% silver coins. These sacks usually have 10,000 dimes or 4,000 quarters or 2000 half dollars. These sacks are heavy and weigh 54.5 pounds, they are also very bulky. Imagine storing or transporting $10,000 face value in silver bags versus neatly stacked compact rolls of silver rounds. 100 ounce silver bars are a popular silver investment and usually have a low premium over the price of silver. However, these are bulky and do not have the flexibility of rounds. When you want to sell your 100 ounce bar, you have to sell the entire bar. With silver rounds, you can determine how many ounces you want to sell and how many you want to keep.
Why should I buy from Westminster Mint?
When you buy silver bullion rounds from Westminster Mint you are buying “Mint Direct”.
This means you will save money because our premiums are lower than most other dealers.
Our gross mark up on a one ounce silver bullion round is just $1.00 above the price of silver. Most dealers charge $1.49 to $3.00 above the price of silver for the same or similar rounds.
Our everyday low prices are available to everyone regardless of the size of order. Most bullion dealers post prices “From as little as”, which means you have to buy in bulk to get that special low price. With us you will get the same low price if you are buying one round or one thousand rounds.
Because you are buying mint direct, the rounds you receive will be “Mint Fresh”. This means you will be the very first person to own them as they come off the press. Being “Mint Fresh” does not alter their value, but enhances the pleasure of ownership. Investors love to count and sort through their large and shiny silver bullion rounds.
We offer a wide selection of popular designs to choose from. Some of the designs are exclusive to Westminster Mint.
Unless stated all of the rounds we offer qualify for inclusion in retirement accounts alongside Silver Eagles and Canadian Maple Leaf coins.
Buying “Mint Fresh” silver bullion rounds, “Mint Direct,” means faster shipping. Because we ship your silver directly to you and not to a middleman who then forwards it on to you.
Westminster Mint makes a two way market in silver bullion rounds.
We will buy back your rounds at attractive rates
Westminster Mint has an A+ rating with the Better Business Bureau .
Mint fresh products
Investing in silver involves risk. The price of silver is highly volatile. Investing in silver is not suitable for all investors. We recommend you contact your investment advisor prior to purchase to see if investing in silver is suitable for you.
Silver Bullion Coins
Silver bullion coins are pieces whose values are intended to be based on their precious metal content.
Bullion coins are minted by government and private mints for a variety of countries. Most are considered legal tender but they are not expected to be used as money because their precious metal content far exceeds the face value of the coins. Silver bullion coins are guaranteed for weight and purity by the issuing government. The premium above the price of silver for silver bullion coins is greater than for silver bars or rounds. This is because the issuing government is not capable of maintaining a two-way market. A two-way market means that the seller will also buy back coins at prevailing rates.
The U.S. Mint sells coins to a few large distributors. The two-way market begins when these distributors sell the coins to wholesalers, who sell them to a network of dealers who then sell them to coin investors and coin collectors. The function of this tiered system is to provide liquidity and ensure that you can always sell the coins back.
Not all silver bullion coins are created equal. nor are they struck to the same fineness. Some silver coins have unlimited mintages, others have smaller limited editions and sometimes higher prices. Some mints change the design of their silver bullion coins every year to keep interest in the series. By volume the most widely traded silver bullion coins in the word are:
How to Buy & Sell Silver
We recommend that you open accounts with more than one bullion dealer. This will give you more places to sell your silver and enable you to get competitive bids.
You can place buy orders online 24 hours a day at www.westminstermint.com. You can also have a silver specialist take your buy order by phone during business hours, 9.00 am to 6.00 pm CST.
To sell your silver to us, call a silver specialist during business hours. They will lock in a final buying price and send you our purchase order for your silver. When you receive our purchase order, you then ship your silver to us. We will mail you a check within 24 hours of receiving your silver.
All transactions are final and can not be altered or amended in anyway. Buying or selling silver is just like buying or selling shares in Google on the stock market. We are committing to deliver your silver at a fixed agreed to price and you are committing to us that you will deliver the silver at a fixed and agreed to price.
When paying by credit card a surcharge of 3% of the value of the total order will be added to your order. This is the fee we pay to process your order on a credit card. When you pay by check or by bank wire transfer there is no surcharge.
We hold all checks and money orders for ten business days from the date of deposit before we ship your silver. All shipments are fully insured by Westminster Mint. Should anything happen to your package while in transit it will be covered by our insurance policy. International orders may be subject to duties, taxes and customs fees in your country that must be paid by the customer on delivery.