Important Terms All Silver Coin Buyers Should Know 

Silver serves as a valuable asset for investors for several reasons. It is often used to diversify a portfolio, protect against inflation and is considered a “safe haven” to store your wealth. However, silver has risks, including volatility, supply and demand risks, and the risk of theft if you have physical pieces of silver. Is silver a good investment for your portfolio?  This depends on your current investment goals, risk tolerance and how diversified your assets are. Silver has been around forever and gives people a sense of stability as a rare limited supply to invest in. When you buy and sell silver bullion there are some terms you should be familiar with.

1. 1. Legal tender

Legal value derived from precious metals designed to be held as a store of value as an investment (as opposed to daily used coins in circulation or collectibles).

2. 2. Silver scrap

Old coins derived most of their value from their silver.

3. 3. Troy Ounce (oz t)

This is a traditional unit of measurement used for precious metals where 1 troy ounce = 1,097 avoirdupois ounces or 31.103 g. The weight of pure silver or silver per coin, for example 9999 parts per thousand = 99.99 percent purity.

4. 4. Gross weight

The total weight of the coin recorded on the scale.

5. 5. Good weight

The gross weight of the coin multiplied by its fineness percentage.

6. 6. Silver spot-price

The value at which physical silver is sold at a certain place and time

7. 7. Premiums

The amount charged by the coin maker is always higher than the spot price of the metal to cover production costs and other overhead costs.

8. 8. Nominal value

The nominal or symbolic value is printed on the face of the silver coin.

9. 9. Intrinsic value (aka Melt Value).

The value of the precious metal contained in the coin (Calculation: gross weight x fineness x spot price of the metal.

10. 10. Numismatic value

The amount of intrinsic value the market is willing to pay for the rarity or other factor that makes a coin collectible.

11. 11. Asking price

The price of the metal and the premium coin – in other words, the selling price

12. 12. Bid Price

The price at which a coin or silver dealer will buy back a silver coin.

13. 13. Distribution

The difference between the asking price (Ask) and the buying price (Bid) – useful in determining how much a currency needs to appreciate before it makes a profit. Why silver?  Silver has been around forever and it gives people a sense of stability as a unique commodity with limited supply to invest in. Among the many reasons people invest in silver is inflation- During uncertain times and high cost of living, people often turn to silver as a way to protect their portfolios from loss. This is because silver is historically a less volatile investment, as well as a product that is still widely used today – making it a conservative investment option. You can also sell silver bullion quickly if you need to in a hurry. Silver is a more liquid investment.