Wednesday, April 24, 2019

What is Silver Bullion

Silver bullion is a physical silver that typically comes in a shape of a round orAcademy 10oz Silver Bar coin or bar. 

Generally, there are 2 categories. Government Mint and Private Mint and the
3 most common shapes are 

1. Bars

2. Rounds

3. Coins

As a guide, Government Mint has legal tender value while Private Mint do not.

Private Mint - No Legal Value

These are some of the most affordable types of physical silver that you can buy because it has has lower premiums (markups over spot). They are manufactured by private mints and present an ideal form of investments for silver or gold investors

These silver bullion are usually measured in troy ounces or grams. The popular ones are 1,000 oz, 100 oz, 10 oz and 1 oz. There are some that come in 1 kilo, which is about 32 ounces.

Some interesting history regarding Engelhard and Johnson Matthey

There were huge quantities of Engelhard and Johnson Matthey silver bars produced in the 1970s and 1980s. By the middle of 1980s, the Reagan administration had managed to bring down the rate of inflation, and silver demand started to dip. Because of this, Engelhard and Johnson Matthey ceased production of silver bullion products.

Because of the abundant supply, Engelhard silver bars and Johnson Matthey silver bars were readily available, until the 2008 Financial Crisis when silver became such a demand that almost every seller were hoarding their silver than selling them.

Silver Bullion Rounds

Silver Bullion Rounds are usually minted from .999 fine silver. They are minted by private mints or refineries. These rounds look like coins but do not have any face value or legal tender status. For this reason, Silver Bullion rounds are usually cheaper than the government minted coins and they sell less of a premium about spot price. These Silver rounds are usually made in many different designs, commemorative, people, events, places etc.

Although Silver Bullion rounds are cheaper, there are some which have become collector's item and some of these do command a higher premium above spot. One example is the Liberty dollars which were distributed by Liberty Services (formerly known as NORFED), based in Evansville, Indiana. Liberty Dollar was based on the Liberty Dollar "Base Value" created by Bernard von NotHaus. The Liberty Dollar was a private voluntary barter currency. It was not government money and was never intended to be used as "Legal Tender", "Current Money" or a "Coin".

However, in November 2007, the entire operation was raid by the Federal Bureau of Investigation (FBI) and the Secret Service. It has since ceased operation. These private Silver rounds are now collector's item.

Another Private silver round bearing the image of Senator Ron Paul has also become a hot collector's item

Silver Bullion Bars

These are the same as the Silver Bullion Rounds, which are usually minted by private mints or refineries and contain .999 silver. Designs varies and some are creatively made in a way that you can stack them up, e.g. the Academy Silver Bars


How much should you pay?

Always check the daily spot price and try to buy as close as possible to the spot price. Generally, common bullion is about $1 plus to $2 above spot if you are buying in small quantity. But if you are buying in larger quantity e.g. 500 ounces and above, it can be as low as 70 cents above spot.

Generic Silver Bullion is one of the cheapest form of silver to start with. Make sure that it is stated as .999 fine silver. There are many brands of silver bullion in the market and some are popular "house-hold" brands. Look around for those brands from refineries that are approved by LMBA or COMEX. They have a approved list of refineries.


Government Mint - Legal Tender 

These usually comes in coin form but there are also other less popular designs (e.g. shape of a banknote, fan etc). The coin has a face value and is legal tender. Silver coins are usually minted by government mint or outsourced to establish private min.


Silver Coins

The most popular Government Mint Coins are the American Silver Eagle, Canadian Maple Leaf, Austrian Philharmonic, British Silver Britannia, China Silver Panda, Australia Perth Mint

The British Britannia, China Panda and Perth Mint (e.g. Kookaburra, Koala) usually carry a much higher premium because of it has become a collector's item and  it has limited mintage


This is a China Panda Silver bullion coin - 1 ounce of pure silver


China Panda Silver coins usually command a higher premium than other Silver coins because these highly sought after collector's item. They are in much demand all over the world and has a huge collector base. The retail price for a current year usually cost about $8 upwards above spot

However, a key date year e.g. year 2000 is already commanding USD$170 a coin while spot is $17.50

The first silver Panda coins issued in 1983, 1984 and 1985 and they were only Proof. It has less silver, at 27 gm. and was only .900 fine silver with a diameter of 38.6 mm. Mintage then was a low of 10,000 for each year.

Although low in silver content and weigh less, these are now highly sought after and it worth more than a hundred each.

There were no silver Pandas minted 1986.

The year 1987 comes in proof, weighs 1 troy oz. of sterling (.925 fine) silver, with a diameter of 40 mm.

Each year has a different design except for 2001 and 2002

Do take note the there are many counterfeits panda coins from China. Some of these are silver plated. Make sure that your sources are reliable before you make any purchases