This article will provide a General Description of Gold, Silver, & Platinum Bullion
A lot of people are familiar with bullion coins and bars, and you see them offered on TV or on websites, but the sheer number of these products may cause even the experienced investor to pause. They are similar in nature, they move up or down directly with the price of gold, silver, or platinum on a daily basis. And, their buy and sell prices are easy to comprehend.
12 OUNCES EQUALS
They are precious metals and as such are measured by the Troy ounce, as compared to your bathroom or postal scale weight which is called Avoirdupois. For the record 14.58 troy ounces = 16 postal scale ounces. The Troy ounce is approximately 10% heavier than the Avoirdupois weight. These bullion products move directly with the New York Commodity Exchange, which opens for trading at 5:30 AM and closes at 10:30 AM California time. After the Comex (Commodity Exchange) closes the price of these coins usually remain fized until the beginning of the next trading day. However there is an aftermarket which may cause quote changes.
A definition of bullion coin: one in which there is little premium above the content or weight value of the coin. You are buying only the commodity itself. Coins like this will increase in value if world markets go up and will decrease in value if world markets go down. This happens because bullion manufacturers produce large numbers of them each year, and eliminates the idea of these coins being rare in any sense, this is not the same for government issue bullion coins.
So what is the difference in a bullion gold coin and a bar of bullion? In the early days of bullion trading the bars was popular. People became interested in owning gold so trading volume increased dramatically which sometimes led to problems with bars in general. They were produced by private companies, so at times it was difficult to know the exact weight and purity. This led to confusion and didn't encourage investor participation.
Governments then decided to produce bullion coins. Producing a bullion coin to replace the bar was more desirable because international standards were developed and coins were uniformly produced. This opened the way to buy and sell bullion again. And because large numbers of coins were produced the premium was the same for bullion coins as it was with bullion bars.
Today gold bars are also popular and safe because private manufacturers standardize production and create a polished look which the general public has confidence in.
Legal Tender Silver Bullion Coins for the Collector or Investor
The 00USD Face 90% Silver Bag: A desired way of owning silver bullion is in the form of 00USD face value silver coins struck in 1964 or before. They weigh about 54 pounds and are sometimes referred to as "junk" silver bags which is misleading. This derogatory name was developed in the 1970's, and was used to describe a bag of average circulated silver coins that did not contain anything that was rare. These bags contained 00USD face value so if half dollars were used there would be 2,000 coins, if the bag contained quarters the count would be 4,000 coins, if it contained dimes there would be 10,000 coins, and so on. If you were to melt them they would contain about 715 oz. of pure silver. All silver coins struck in 1964 or earlier are 90% pure, so bags will move up or down with the daily price of silver. For convenience some sources provide bags in two smaller units of 0 face value each, which makes it easier to handle and store.
The private investor should be aware these old silver coins are no longer being produced. That means if demand increases because of rarity the price over their normal silver value could be in play. Premium pricing also develop because survivalists, who want only U.S. silver coins for barter, insist on this form of silver bullion. The premium on 90% silver bags can vary from a negative (trading for less than content) to a positive and price to as much as 30% over their actual silver weight.
The difference between buy and sell is fairly constant and there are investors who buy bags when premiums are cheap or negative and trade them when premiums increase substantially. Keep in mind that dealers are required by law to report the sale of 00USD face value 90% bags on an I.R.S. Form 1099B. Smaller quantities of 90% bags are not reportable.
The 00USD Bag Of Silver Dollars: This investment in Silver is not exactly a bullion investment, and it's not a rare coin investment either. Circulated silver dollars struck between 1878 and 1935 carry higher premiums, but they are a prime source of legal tender silver coins because they are so recognizable. The early silver dollars are divided into two price categories. The more expensive being the Morgan dollars struck between 1878 and 1904 and the Peace dollars struck between 1921 and 1935.
The Peace dollar which are less expensive are quoted by the bag. Most of these coins are always in average condition and graded VG (Very Good). A Morgan dollar bag and finer quality coins are at slightly higher prices, so it pays to ask questions before placing an order with your dealer. This option is popular because silver dollar bags represent real, portable wealth, and have for over 100 years.
The 40% Silver Bag: The last silver coin the United States that was made for general circulation was the 40% silver clad 50¢ struck from 1965 through 1969. This is another popular way to own silver bullion in legal tender form. Like circulated 90% pure coins these 00USD face value bags are traded for content. Because they are 40% pure a bag contains substantially less silver (296 troy oz.) which is generally reflected in a lower selling price.
The investor or collector has a number of advantages with this purchase. First these are real U.S. coins and are legal tender of our nation (U.S.A.). In a fiscal emergency this could be a significant. Second, the bag has a high face value, 00USD which limits the loss should silver move lower. This is seen in a down market as premiums almost always move higher. And finally, unlike 90% silver bags, a dealer is not required to fill out I.R.S. Form 1099B on the 40% bags when you sell.
The 100 oz. Silver Bar: This is another great way to own bullion silver by imvesting in the 100 troy oz. bar which is .999 fine. Keep in mind that not all bars may be equal. Some 100 oz. bars are better than others, a detail many bullion dealers neglect to mention especially if they are not delivering the very finest available. The two most accepted 100 oz. bars are produced by J.M., and Engelhard. Other 100 oz. bars can trade at a discount so the J.M., or Engelhard are the better value. They don't cost any more to purchase, but will fetch more when you sell them. They weigh 6.8 pounds and will fit into a small safe deposit box. Your dealer will be required to report a sale of 100 oz. bars when you sell 10 or more.
The 1oz. & 10oz. Bar: Equally popular are these .999 fine smaller units. In any case these two so called "generic" rounds or bars are traded worldwide and can be bought or sold in any quantity. They do cost slightly more than 100 oz. bars but are easier to handle. The 1 ounce silver piece is produced in the shape of a coin because they easily store in plastic tubes, and that is where the name 1 oz. silver rounds comes from.
The U.S. Silver Eagle: The U.S. Silver Eagle has been produced by the United States Mint since 1986. It contains 1 oz. of pure silver, and actually represents in legal U.S. currency. The Mint produces these coins each year and their price fluctuates directly with the silver market.
Legal Tender - Silver Bullion Coins For the Collector Or Investor 12 OUNCES EQUALS
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