Investing with Silver Coins

Investing with Silver Coins

There are two very different varieties of silver coins that can be used as a form of investment. Firstly, there are the silver coins which are minted on a regular basis and which offer their owners the immediate intrinsic value of the silver that they contain. They also offer the extrinsic value of the currency.

For example, the American Eagle silver coins provide the buyer with a full ounce of bullion quality (nearly pure - .999) metal. These coins deliver the two types of immediate value mentioned above; the “intrinsic” value of the metal contained in the coin which ties the actual worth of the coin to the market price of silver, and the “extrinsic” value which is the one dollar denomination that is the coin’s face value. This extrinsic value is actually something to consider because it gives the owner of the silver coins a unique opportunity for a bit of protection.

When a coin has government backing through a face value it means that any bank or financial institution is obliged to honor the currency value. Should the underlying asset in the coin, such as the silver used to make it, somehow lose most or all of its value, the holder of the coin could still “cash it in” to get that little bit of their original capital back. There are no other forms of investment that will give the individual one penny of the initial investment back if the enterprise is a failure, and this is a definite appeal to any of the coins made from silver.

The other coins that are used to invest are the antique or rare coins made from silver. These offer the two values already mentioned, and also come with the value that is derived from their rarity, scarcity, and collector’s demand.

For example, among the most commonly collected of the coins made from silver are those known as the Morgan dollars. These were made between 1878 and 1921, and can be worth little more than the silver that they contain, or can often be worth a huge amount more than that depending entirely upon their rarity and their condition.

There is even a further category of coins frequently purchased by investors, and these are known as the “junk coins”. These include dimes, quarters, and half dollars that contain anywhere from 40% to 90% of pure silver and which have no value where rarity or scarcity is concerned, but are purchased purely for the intrinsic value of the metal.