When buying silver products, new buyers are often faced with the question of whether to buy a "Silver Round” or a “Silver Coin.”
To delve deeper into the discussion of silver rounds vs coins, in this article, we explain some important differences between the two versions of modern silver bullion products: silver rounds and silver coins.
The Definition of Silver Bullion Products
Silver Bullion Coins are flat disk-shaped ingots containing mostly 99.9% fine silver in their alloy composition. They are usually struck by official mints such as the U.S. Mint and carry meaningful designs on both sides, as well as denomination, date, and the mintage year.
They are not sold directly to the public but to allowed purchasers.
Silver Bullion Rounds are also flat disk-shaped ingots, have meaningful images engraved on both sides, and have their metal content and purity marked. The most significant difference is that the bullion round, unlike coins, carries no denomination or minting date.
Because of the lack of monetary value, these can be compared to modern versions of silver medals or silver bars.
The Buffalo Silver Round is the most famous of the silver rounds available. It features the iconic Indian Nickel Design or Buffalo nickel design and proves to be a way of owning the famous Buffalo nickel imagery with the same purity standards but the lowest premium.
Their weights can vary widely based on the minting company or design specifications. Some rounds might match the same weight of standard silver coins, like one troy ounce, while others might come in different weights, such as fractional or larger sizes.
So, the key differences are: a silver bullion coin is legally a precious metal form of coinage that possesses historical, monetary, and may or may not contain numismatic value.
The silver round is a disk-shaped silver bar that usually has a lower premium and serves as an option for a precious metal investment portfolio mainly due to its melt value.
Silver Bullion Coins are Struck by Government Mints
Modern silver bullion coins have been a popular form of investment for a few years now.
The American Silver Eagle Program holds the place as the most popular coin in the American bullion market.
Every silver coin we carry in our inventory is, by industry definition, struck and guaranteed by a government mint.
Government Mints which produce modern silver currency coins include:
- US Mint
- British Royal Mint
- Chinese Mint
- Austrian Mint
- Canadian Mint
- New Zealand Mint
- Somalian Mint
- Mexican Mint
The production facilities of the United States Mint are in Philadelphia, PA, San Francisco, CA, Denver, CO, and West Point, NY.
Coins produced at those branches will, most times, receive a mint mark, which refers to the facility they were minted. So, different denomination coins from the same mint in the San Francisco facility will both receive the S mark.
Silver Bullion Coins are Typically Legal Tender
Governments determine what products have legal tender status, and only these governments can print a face value on their coins. Any citizens who test this fact typically end up in prison.
Coins usually have explicit legal tender values and carry a stamped legal tender face value on the coin itself.
Silver rounds carry no denomination and will be priced mostly according to their precious metal content. Denomination means the face value or the numerical value assigned to a specific unit of currency.
For instance, in the United States, the denomination of a dollar bill might be $1, $5, $10, $20, and so on. These rounds are not considered legal tender and, therefore, do not contain any monetary value.
Don't get confused, as most silver coins have low legal tender face values, which have little to almost nothing to do with their real market price for the silver bullion content.
Take a 5 oz America The Beautiful Silver coins, for instance. They contain a legal tender face value of a quarter dollar or 25¢.
Yet no one in their right mind is trading 5 oz of highly collectible silver product issued by the US Mint for a smaller legal tender cupronickel quarter (legally 25¢ too). Yes, the ones you might find in your pocket change vs 5 oz of silver bullion have the same value... legally, in this case.
The same logic applies to old silver dollars. A 1995 American Silver Eagle with a face value of $1 was sold for $86,655.00 in 2013 at Great Collections. Of course, this price tells us more about its numismatic value (coin designs, history, rarity) than its silver spot price or its face value.
You can learn more about why governments almost always giving bullion coins low face values. It has to do with Gresham's Law.
Silver Rounds for More Ounces Overall
Private silver rounds are, by industry definition, produced by private mints. No private mint or round company can grant silver rounds or silver coins monetary or face value other than an official issuing government.
Popular private manufacturers generally have much lower price premiums than competing government silver coins (generally more expensive per ounce).
If you are all about getting the most weight for your fiat currency, then silver rounds are going to be a good option since most rounds work like disk-shaped silver bars in terms of investment.
Silver Collectibility and Potential Precious Metals Appreciation
The appreciation of a product refers to an increase in its value through time. Basically, its future performance.
Lower-mintage silver coins are probably the best option, since they usually present a higher price if compared to high-mintage coins. This happens because lower mintage coins usually result in high demand for the product in the future.
Look for high-quality silver coins with reasonable premiums and low mintage if possible.
Many of the Perth Mint silver coins have become highly collectible as many of the coins they strike have hard-limited mintage populations.
Silver Coin Performance During Financial Crisis
We want you to understand how each respective silver coin product is priced during economic downturns.
You’ll want to pay attention to the far left side ← AND on the far right side → of the following Silver Coin price premium charts. They represent the Financial Crisis of 2008 and the start of the Covid-driven restrictions in 2020.
No silver rounds in high volumes performed as well at the time.
The silver round market is indeed so tiny it typically mimics the price premiums for government-minted silver coins.
Over the following chart's near 15-year timeframe, there were also slight silver product shortages in 2013 and 2015, respectively, hence their rise in price premiums.
But we'll focus on the financial crisis as we are likely gearing up for another ahead (growing global debt levels, undermined confidence, unfunded liabilities).
In late fall 2008, silver spot prices hit a low of $9 oz, yet... millions of,
American Silver Eagle Coins - sold at about 80% over spot ($16 a piece)
Canadian Maple Leaf Silver Coins - sold at about 45% over spot ($13 a piece)
Austrian Silver Philharmonic Coins - sold at about 40% over spot ($12.50 a piece)
90% Silver Coins - sold at about 40% over their silver melt price
We can see a similar effect on the right-side of the charts above. Starting with huge spikes in March of 2020, when Covid restrictions were first put in place. Then again, in 2022 and 2023. Time and time again in 2023, we have seen bank failures, bullion demand exploding with massive silver demand forecast until 2033.
See our full silver price prediction for the next 5 years.
Other Silver Buying Bullion Considerations to Consider
There are many additional factors to consider all the varying product choices in the silver bullion market.
There really is no “one size fits all” solution when it comes to choosing and buying silver products.
It is best to get your information from silver buyers and sellers who actually do so in real life. Avoid merely middlemen commissioned sellers without a passion for the products, or worse, potentially scam selling you into overpriced or even dangerous products you should never buy.
Silver Bars
Buying silver bars is just one of the various forms of investing in precious metals. You can find other precious metals in the form of silver rounds, bars, and bullion coins.
They can be purchased relatively easily from private mints or certain government mints. You can buy and pay online, offering a means of safeguarding your wealth.
Additionally, they represent a tangible asset, providing a sense of security unique to physical assets.
Precious metals IRA
The IRA acronym stands for Individual Retirement Account. Silver IRAs work as a regular IRA account, but it gives you the choice of investing in physical silver within the account, including silver government-issued coins, silver rounds and silver bars.
You will not hold the actual asset in your house but in an allowed storage facility, and the metals must follow the strict purity and weight standards set by IRS rules.
Counterfeiting
Counterfeiting refers to the practice of producing fake products so they can look like real ones for illegal or dishonest purposes.
According to the Legal Information Institute, the commercialization of fake coins or fake rounds is considered fraud, and it is illegal in the U.S. and can guarantee a good time in jail depending on the local anti-counterfeiting laws.
The best way of defending yourself from counterfeiting is always to buy silver coins or rounds from trusted and well-wired private companies. Basically, a place that can guarantee quality.
Final Thoughts
Based on the extensive comparison between silver coins and rounds, the choice depends on individual investment goals.
These distinctions create trade-offs concerning storage ease and potential investment returns for investors considering whether to buy silver bullion. Factors like historical significance, collectibility, and production costs delineate the differences
Silver coins, holding legal tender status, appeal to collectors due to rarity and design, while silver rounds, lacking denomination, offer lower premiums and serve as an investment option due to their metal content.
FAQs
Is it better to buy silver rounds or coins?
Choosing silver rounds or bullion coins relies on investment goals. Coins hold legal tender, while rounds value weight and purity. Both offer precious metals, aiding portfolio diversification.
Why are silver rounds cheaper than silver coins?
Silver rounds cost less due to higher production and lack of rarity, demand, collectibility, and unique designs found in coins. The limited mintage and historical significance of coins elevate their collectible value.
Will silver rounds go up in value?
Silver, as a precious metal, tends to be more volatile if compared to gold, which usually has a more stable performance than its counterpart. As of November 28, it fluctuates around $$25,02. Silver rounds are mostly valued based on their precious metal content. Therefore, you can expect prices to rise as long as the silver spot price is performing well.
Are silver rounds hard to sell?
The value of every silver round relies on silver's spot price and the state of the rounds. Damaged or heavily worn rounds might hinder sales, while those in good condition facilitate purchasing silver bullion.
