Silver Coins and Silver Bullion Overview
Silver coins (basically pre-1965 U.S. 90% silver coins) and silver bullion are popular ways to invest in silver. Silver, along with gold, has a 6,000-year history of surviving wars, economic chaos, and financial disasters. Silver can be expected to do the same in the future. In something like 14 languages, the words for silver and money are the same.
Since 1973, CMI has sold both silver bullion and pre-1965 U.S. 90% silver coins. CMI also buys silver bullion and bags of circulated 90% coins from investors.
999 Silver Bullion
Silver bars, also called ingots, have emerged as the most popular way to invest in silver. Silver bars are uniform in size, making them easy to handle and convenient to store. Additionally, they are compact, which enables investors to secure a great deal of wealth in a relative small storage area. Bars with recognized hallmarks are readily accepted for resale, making them easy to convert to cash.
The silver bars offered by CMI are 999 fine (99.9% pure), which is the industry standard. 100-oz and 10-oz sizes are the most common. Yet, 50-oz, 25-oz, and 5-oz bars, which were produced in the early 1970s, will surface occasionally. 1-oz silver rounds are popular, and 1-oz bars (often referred to as 1-oz ingot or 1-oz rectangles) are available. 1,000-oz bars can be had but are not recommend, except for IRA investments. (See more on 1,000-oz bars below.)
100-oz investment silver bars dominate the bullion market. Investors who buy 100-oz silver bars generally ignore the survival aspect of owning silver, which comes with owning pre-1965 US 90% silver coins and 1-oz silver rounds. 10-oz silver bars offer investors a compromise between 100-oz investment bars and survival forms, e.g., circulated 90% coins or 1-oz rounds. There are numerous brands of 100-oz silver bars, many of which are pictured on this Website. Use the dropdown menu at the top or the table at the bottom for links to photos and information on silver bullion items sold by CMI.
Circulated pre-1965 US 90% Silver Coins
Although technically not bullion, circulated pre-65 US 90% silver coins are a bullion investment because when an investor buys $1,000 face (a "bag") they are essentially buying 715 ounces of silver. Usually, bag prices fluctuate penny for penny with the world price for silver. If silver goes up ten cents, a bag of 90% generally rises $70 or so. Note the "usually" and the "generally." That's because bags sometimes lag spot price changes by a few days.
When minted, a bag of 90% contained 723 ounces of silver. Because of wear, however, a bag of dimes or quarters will net about 715 ounces. A bag of half-dollars will net a little more, maybe 718-720 ounces because half-dollars did not circulate as much as dimes and quarters. Investors can expect to pay a little more for half-dollars than for dimes or quarters because of the higher silver content and because half-dollars are more popular. Also, fewer bags of half-dollars were minted than were dimes and quarters.
When bags of circulated 90% coins can be bought at about the same premium as 100-oz bars, bags should be the first choice because they can and often do pick up premiums in rising markets. In past precious metals bull markets, bags have tacked on premiums of $1.20-$1.50 after only a few months into the bull markets. At times, premiums can rise to ridiculously high levels. For example in 1999, bags carried 50% premiums because of frenetic buying by people who were afraid that Y2K would cause many of the world's computers to fail.
While bags held such huge premiums during the Y2K buying frenzy, many CMI clients at our urging swapped their 90% bags for 100-oz bars or 1-oz rounds and increased their silver holdings by 35% go 45% without laying out additional cash. After Y2K became a nonevent, the premiums on bags of 90% collapsed. In fact, in the Y2K aftermath, the selling of bags of 90% overwhelmed buyers, and thousands of bags were melted, which means there are fewer bags of 90% available than when they sold at 50% premiums. Although CMI recognizes that bags are more cumbersome and difficult to handle and store, we believe that the potential for 90% to again pick up big premiums justifies buying bags.
1,000-oz 999 Fine Silver Bullion Bars
Newly refined silver bullion is poured into 1,000-oz bars for storage until the silver is needed for fabrication into the many forms needed to meet industrial needs. 1,000-oz bars of 999 fine silver bars are also the standard form of delivery for futures contracts, such as those traded on the COMEX. However, rarely do 1,000-oz silver bars weigh exactly 1,000 ounces because there is no need for the refineries to go to the costs of making the bars weigh exactly 1,000 ounces. Most contain somewhere between 980 oz and 1100 oz; yet, some bars fall outside that range. After 1,000-oz silver bars are poured, their weights are stamped on them. Although CMI recommends investors go with 100-oz silver bars when investing in 999 fine silver bullion, we can ship 1,000-oz bars for those investors who want them.
Putting Silver (and Gold) in IRAs
In 1997, Congress changed the laws so that IRA plans could accept silver and gold bullion. Although Silver Eagles are still allowed in IRAs, the most popular forms of silver bullion going into IRAs are 100-oz and 1,000-oz bars, and logically so. Bullion bars sell at significantly lower premiums than do Silver Eagles. For more information about putting silver in IRAs, visit Putting Precious Metals in Your IRA. For more information about the various 100-oz bars, use the dropdown menu above.
Why Invest In Silver or Gold?
Investors often ask, "Why should I invest in gold and silver?" and "Should I buy the physical metals or stocks?" For answers to these questions, read Why should I buy gold and silver?
Is Silver Better Than Gold?
Precious metals investors often ask "Should I invest in silver or gold?" Silver, silver, and silver is the answer, for a number of reasons.
First, silver has always produced a greater percentage increase during precious metals bull markets. In past precious metals bull markets, silver has often tripled in price while gold has doubled. In some moves, silver rose four times while gold doubled in price.
Silver has more industrial applications than does gold, with more being announced almost weekly. These industrial uses provide an underpinning to the price of silver. So great is the industrial demand for silver that mine production and secondary recovery have fallen short of industrial demand since 1990. According to CPM Group, a New York metals consultancy, in 2001 new production and secondary recovery fell 117.5 million ounces short of meeting industrial demand. Add in the silver used for coinage, and the overall deficit swelled to 142.5 million ounces. Year 2001 was the eleventh consecutive year that saw a deficit. CPM Group estimates that over the last eleven years the production deficit has consumed 1,386,000,000 ounces of aboveground silver.
Not only has production and secondary recovery failed to meet demand each year of the last eleven years, but aboveground supplies are critically short. Some analysts say that supply will fall far short of meeting demand over the next decade, and that much higher silver prices will be the result. According to accepted statistics, more gold rests in the vaults of the world's central banks than there is aboveground silver.
The drop in reported silver holdings around the world shows just how much the production deficit has eaten into aboveground supplies. In 1995, Comex stocks stood at 260 million ounces; today Comex stocks are about 100 million ounces. In 1991, estimated silver inventories in London and Zurich were 350 million ounces; today that number is closer to 50 million ounces. In 1980, world governmental silver stockpiles totaled some 325 million ounces; today, CPM estimates that number to 140.4 million ounces.
Finally, many people think first of gold when the subject of "hard money" arises. Yet, more people have used silver for money than have used gold. In something like 14 languages, the words for silver and money are the same. In the United States, gold coins ceased to circulate as money with Roosevelt's 1933 call-in. However, the U.S. Mint continued to turn out silver coins until 1965.
Pre-1965 U.S. 90% silver coins, circulated and uncirculated
U.S. Silver Dollars, minted 1878-1904, and 1921-1935
100-oz silver bars, Johnson Matthey and Engelhard
1-oz Privately Minted Silver Eagles
1-oz American Silver Eagles ($1 face value)