How to Invest in Coins & Precious Metals

Posted by Derek Sawchenko on

Are you new to investing in silver and gold? Do you know the difference between numismatic and bullion? The difference between rounds and bars? The difference between spot and premium prices? If you don’t know where to start, you’ll need to understand the basics and the differences of the terms mentioned above.

            Numismatic coins are collectible and rare. Bullion coins are valued for their melt value in silver and gold. Which should one invest in? Numismatic coins are valuable because of their historical background, mint marks, design, year of mintage, and coin population. Bullion coins are only valuable for their precious metal content.

            When investing in bullion, you’ll be looking at coins, bars, and rounds. As mentioned previously, the bullion coin value comes from precious metal content. Bullion coins are struck by the mint; most can be used for legal tender. Bars are rectangular bars made entirely of precious metal such as silver or gold. Rounds are flat rounds that are also made of precious metal. Both bars and rounds are struck at private mints.

            When purchasing precious metal, you’ll encounter spot price and premium price. The spot price is the price of the precious metal in that immediate time. Premium price refers to the price that includes production costs. For example, the spot price of silver may be price “x”, but the premium price of the silver after it’s produced as a bullion coin could be much greater.

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