The Value Of Silver Coins

Like most assets, the value of silver coins is market driven. The attributes and market forces listed below determine silver coin prices:

  • Silver bullion content
  • Popularity (demand)
  • Availability (supply)
  • Numismatic worth

Round vs. Coin

Engelhard Silver Round - obverseMexican Silver Libertad

Generally, silver bullion coins are issued by government mints and have legal tender (face) values in the issuing country’s currency.

The Mexican Silver Libertad is an exception (no face value).

Silver rounds are typically produced by private mints and do not have currency face values. A round’s price is primarily based upon its silver bullion content.

Silver Bullion Value

A coin’s bullion value is tied to the silver spot price or London fix price for 1 oz. of silver. These prices are based on 1,000 oz. silver bullion ingots traded in the wholesale silver marketplace.

Additional manufacturing is required to make silver coins. Therefore, silver coin prices are usually a little higher than the London fix price or silver spot price.

Both market prices reflect current market values for silver bullion ... either
minute-to-minute (spot) prices or the London fix price, which is a momentary equilibrium price (supply = demand).

The London fix and silver spot price are used as baselines by online silver bullion dealers to determine the value of silver coins. Jump here to learn how dealers price their silver bullion products.

Although the silver content in coins largely determines bullion worth, alloy silver coins also contain other metal(s) like copper.

For example, US junk silver coins minted prior to 1965 contain 90% silver and 10% copper. Copper makes a very small contribution to the total value of silver coins such as these.

Junk Silver Coins

The silver coin melt value is another phrase used to describe the value of silver coins. In short, it’s the price a refiner is willing to pay for certain silver coins (i.e. Jefferson Wartime Nickels) that are to be melted and refined for other uses.

A refiner usually pays less than the current spot price for these silver coins since it uses them as raw manufacturing materials.

Silver bullion is more than a commodity investment. It’s also an industrial base material used to manufacture electronics, jewelry and certain health-care-related products, to name a few.

When the economy grows, industrial demand for silver bullion can increase in concert with greater manufacturing productivity.

During tumultuous times or when a currency's health is in question, investors often turn to gold and silver bullion as alternative stores of value.

Therefore, whether the economy is good or questionable, the potential for silver bullion coin appreciation is possible.

Coin Popularity

Premiums can vary among silver bullion coins since one coin can have more demand and/or smaller supply than competitive coins.

On this day (May 25, 2012) for example, I checked the prices of three popular silver bullion coins listed by a US silver bullion dealer.

Although all three are 1 oz. silver bullion coins, their prices vary based on coin popularity (demand) and availability (supply) as seen in the table below.

Silver Bullion Coin Price
2012 Australian Kookaburra Silver Coin $38.06
2012 US Silver American Eagle Coin $32.85
2012 Canadian Silver Maple Leaf Coin $32.55

Australian Silver Kookaburra CoinSilver American Eagle ReverseCanadian Silver Maple Leaf Coin

The dealer in the above example highlighted the fact that the Kookaburra's mintage number is 500,000 … which is significantly less than the other two silver coins listed.

A more limited supply of the silver Kookaburra coupled with its popularity is causing it to fetch 16% more than the Silver Eagle Coin and 17% more the Silver Maple Leaf Coin.

Numismatic Value

Collecting rare silver coins is a great hobby and investment opportunity. It’s a fun pastime that can also produce financial rewards once you become informed.

There are credible clubs and coin grading organizations that are excellent resources to help you make informed decisions. Please visit here to learn more about the coin grading process.

The numismatic (rare) value of silver coins is primarily determined by a coin’s …

  • Rarity
  • Condition (appearance)
  • Demand

A rare silver coin’s demand is often a result of the other two attributes (condition and rarity). The better the condition, as reflected in its certified grade, and the lower the mintage number (supply), the more attention it will likely attract from collectors (demand).

However, collectors can have other reasons for their interests in certain coins such as the historical significance (i.e. the era of a coin’s minting). Or perhaps they are fond of the artwork and its symbolism.

Morgan Silver Dollars

Professional Coin Grading Service (PCGS) and Numismatic Guaranty Corporation (NGC) are both top-tier coin grading organizations.

Each grading company has its own price guide that lists average prices
- gleaned from various sources in the rare coins marketplace - of graded numismatic silver coins.

Please select one of the links below for more information on the numismatic value of silver coins graded by NGC and PCGS:

You should now have a general understanding of how the value of silver coins is determined. All my best wishes for your investing success.

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