Here’s why we (almost) always recommend buying bullion coins like Canadian silver and gold maples or bars. But you’ll also learn when there could be an exception to this rule...
Table of contents
- Bullion Coins vs Collectible Coins
- What’s the Difference Between a Bullion Coin and a Numismatic Coin?
- Why Buy Limited Mintage Silver Coins?
- Here’s a Possible Benefit to Buying “Semi-Numismatic” Silver Bullion Coins
- Why You’re (Usually) Best to Stick to Buying Bullion Coins
- Semi-Numismatic Coins For Less Than Bullion Coin Prices
Estimated reading time: 6 minutes
Bullion Coins vs Collectible Coins
A not uncommon question when thinking about buying silver is should I buy numismatic or collectible coins instead of your garden variety bullion coins?
What’s the Difference Between a Bullion Coin and a Numismatic Coin?
A silver bullion coin is just a coin with a lower premium above the silver spot price. They are widely recognised across the globe and are readily sold and importantly bought back by dealers and refiners in just about any country where silver is bought and sold. You are really just paying for the silver content in the coin, plus a smaller minting/fabrication cost.
Whereas a numismatic or collectible silver coin will generally have a price far higher than the silver spot price. Potentially hundreds or even thousands of percent above the spot price.
They will have a “limited mintage”. Meaning only a specific number of coins will be minted and they may be labelled accordingly.
To get full resale value you will need to sell the silver coin back to a knowledgeable coin dealer or collector.
Why Buy Limited Mintage Silver Coins?
Our general approach and advice is to just stick to buying bullion coins.
That way you are just paying for the silver content of the coins.
This doesn’t require any specialist knowledge or expertise to select a bullion coin, unlike when selecting a numismatic or collectible. And you don’t risk paying a far higher price than the coin may be worth.
Because if you are buying silver as wealth insurance, which is how we look at it, then you want to pay as close to the spot price of silver as possible.
So our general advice is not to buy limited mintage silver coins. Unless you have the requisite knowledge and expertise to ensure that what you are buying stacks up.
You may also be interested in: What Use Will Silver Coins be in New Zealand in a Currency Collapse?
Here’s a Possible Benefit to Buying “Semi-Numismatic” Silver Bullion Coins
However others may and do disagree with our assessment.
Their argument is to buy what are still “bullion coins” but those with a limited mintage so they have some potential to gain in value due to scarcity. This way you are still not paying too much above the spot price, but with a possible chance of a further gain when the time comes to sell.
The Bullion Baron (an Australian website) does an excellent job of summarising this argument.
“My basic plan when buying silver bullion coins is to target those with a limited mintage which may attract growing interest over time. So rather than buying a 1 ounce silver bullion coin with a $2-3 premium over spot price (e.g. American Silver Eagle or Canadian Silver Maple, etc), I instead buy coins with a $4-7 premium over spot price (e.g. Perth Mint Silver Lunar, Kookaburra or Koala, etc) with the expectation that the premium will increase along with the coins collectibility. Here’s how it works with $5000 to spend:
Now: Spot price is $25
1: Buy 178 low premium silver coins for $28 each ($4984)
2: Buy 161 high premium silver coins for $31 each ($4991)
Future: Spot price is $50
1: Sell 178 low premium silver coins for $53 each (premium hasn’t increased)
2: Sell 161 high premium silver coins for $70 each (premium increased by $14)
The profit using option 1 is $4,450. The profit using option 2 is $6,279.
This is a pretty conservative example given some of the old Perth Mint bullion coins have attracted even larger premiums.
If spot price falls you may end up with a smaller profit or even a loss, but if you’ve selected your coins carefully then you will find the additional premium achieved provides a better buffer still than if you’d bought low premium silver coins.”Source.
Why You’re (Usually) Best to Stick to Buying Bullion Coins
However the difficulty here for the layperson is that you still have to pick the coins “which may attract growing interest over time”. Easier said than done we reckon.
So generally we’d say it’s safer to stick with well know bullion coins like the silver maple leaf. That way you’re just paying for the silver content.
However currently the premiums above spot price on the silver Maple coins are higher than average. This is due to recent increased demand and also lower levels of production due to COVID-19 shut downs and restrictions. Other well known bullion coins such as the American Silver Eagle are also attracting significantly higher than normal premiums above the silver spot price.
So the lowest price bullion coin we have currently is the 1oz Austrian Philharmonic Silver Coin. In mint boxes of 500 coins these today sell at about $41.32 per coin. (Bear in mind this price is at the time or writing this post, so will be different when you are reading it).
Semi-Numismatic Coins For Less Than Bullion Coin Prices
Due to the lack of, or limited availability, of many bullion coins presently, we have some semi-numismatic or semi-collectible coins that are priced lower than the cheapest bullion coin.
We have a 500 coin box of Cayman Islands Marlin 2021 1 oz Silver Coins for $20,285 (price as of 9 November 2021 and includes free shipping and insurance). Per coin this equates to $40.57 per coin. That is over 75 cents per coin less than the next cheapest silver coin available, the 1oz Austrian Philharmonic mentioned above.
We also have a smaller volume of 250 x Cayman Islands Marlin 2021 1 oz Silver Coins priced at $10,456.
So in this case you can buy a limited mintage 999 fine silver coin (only 50,000 produced) for less than the price of a bullion coin. The details are:
Cayman Islands Marlin 2021 1 oz Silver Coin
- 1 Troy Ounce | 999 Fine Silver
- Legal Tender in Cayman Islands
- Limited Mintage: 50,000 (This is the last 500 of these coins)
- Quality: Proof-Like
- Sealed in Tubes of 20
- Diameter: 39mm
These are a subscriber only deal and so not listed on our website. Contact us to request the current price. This is the last 500 in the 50,000 mintage for 2021, so get them while you still can.
To be advised when we have other limited mintage coins available sign up to weekly newsletter. You’ll get the latest gold and silver news, but also access to subscriber only special deals on clearance products and limited time offers.
Read more on silver coins: Should I Buy Legal Tender (Face Value) Gold and Silver Coins? >>