Are American Silver Eagles a good deal?

Discussion in 'Bullion Investing' started by WingedLiberty, Oct 31, 2010.

  1. WingedLiberty

    WingedLiberty Well-Known Member

    I have been going back and forth on whether ASE's are a good deal when wanting to buy silver bullion.

    I know that circulated 90% silver US coins can be bought for roughly 2 to 5% over spot (sometimes less, even closer to spot); while ASE's are generally availlable for 12 to 15% over spot.

    This difference in price seems likely due to the fact that the US Govt adds a $2 premium per ASE coin when selling to distributors - thereby raising the premium to retail buyers.

    So are we just getting ripped off when we buy ASE's? I know that some post that ASE's may get some "rare coin premium" if the ASE series (program) suddenly ended. However most of the lower mintage ASE dates were back in the mid 1990s. Most of the recent ASE's have very high mintages going over 20 million in 2008, 2009, 2010 -- so i have a hard time believing these coins minted in the past 3 years would ever be considered rare, even if the ASE program did end.

    So what do you all think, are we suckers when we buy rolls of 2010 ASE's at 14% over spot?

    I know that ASEs are GORGEOUS (I own a pile myself) ... but is it a smart buy?

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  3. Vlad

    Vlad Senior Member

    if its silver that you want, then yes you are.

  4. WingedLiberty

    WingedLiberty Well-Known Member

    then why would someone buy 2010 ASE's?

    they arent rare and will never be rare ... why do millions of people buy ASE's at 14% over spot?

    (they are still considered a bullion coin)
  5. fretboard

    fretboard Defender of Old Coinage!

    That's a good question? In fact I've often thought the same thing, ppl don't think it through. That's the only conclusion I've come to. I think some collectors just collect them and don't even think about a profit when reselling. You would have to buy ASE for alot cheaper than US Mint prices in order to make any money at all.

    Maybe someone will educate me on this b/c I've often wondered, how much do coin shops pay for bullion on ASE's??
  6. Rhino89

    Rhino89 "Roubles"

    I've never understood the math behind ASE's... those who buy them for numismatic value and beauty, I get, that's fine. But those who buy them for investment I don't understand. So you're buying at like 14% over melt, and hope the value will go up, but then do they not realize that to just break even the price of silver would have to increase by 14% as well? And when you DO go to sell, the people buying from you will want to get you to sell as close to melt as possible, so in order to really make a profit you'd have to buy a lot now and wait for silver to go up in value about 20%.
  7. Cloudsweeper99

    Cloudsweeper99 Treasure Hunter

    Yes, ASEs are an excellent buy. Someday the US mint will discontinue the series, and every ASE will immediately begin to accrue at least some numismatic premium because the supply will be fixed and demand will continue to rise. As you can tell from this thread, many people do not consider ASEs to be best. This works to the advantage of the ASE buyer. If you want to be smart about it, only purchase coins in excellent condition from some of the lower mintage years. I've seen people abuse ASEs because they believe they are "only bullion," and someday the MS69 coins have an excellent chance of commanding a significant premium. Now, 2009 and 2010 mintages are so large that those coins may not go up much in price, but some of the earlier years sell for the same price, and should be preferred. Remember, it is the coin that receives no respect that becomes the sought after collectible of the future. There are no guarantees, but for me, the small premium on ASEs is worth the potential numismatic value in the future.
  8. fretboard

    fretboard Defender of Old Coinage!

    So does anyone know what coin shops normally pay for the ASE's when selling as bullion? I ask because I've only seen them buy silver rounds for dirt cheap, paying $13 each but I've never been in the store when someone has come in with ASE's for sale.
  9. You have been saying this for years, and I could not agree more. :thumb: TC
  10. WingedLiberty

    WingedLiberty Well-Known Member

    yes but to buy earlier lower mintage years ... it's even more expensive

    the bullion 1996 goes for over $50 a coin (which i think is nuts)
    the bullion 1994 goes for over $33 a coin (about a 33% premium)

    do you really think these will ever become "rare"
    after all practically the entire mintage was saved in Unc condition

    the W mintmarked 2006-2008 have lower mintages of ~1/2 million each ...
    and the proofs are lower mintages up to 1 million
    but are there really that many people who will want to collect the whole set?

    Still I wonder in terms of rarity if you would you be better off buying old Unc Morgans
    which you can buy for 25 to 30 a coin
  11. 1970 Silver Art

    1970 Silver Art Silver Art Bar Collector

    Some earlier year SAE's are a good deal. For me, when I go to my local coin shop to look for 1-oz '70's silver art bars to add to my collection, my dealer will occasionally have an SAE in the .999 generic bin and will sell it for .999 generic silver premium (which in my case is between $1 to $1.50 over spot). However, the SAEs that I occasionally find in my local dealer's .999 generic silver bin are dinged up and not in excellent condition.

    The only way , in my opinion, to get a good deal on an American silver eagle would be to find one at a local coin shop that is in not very good condition and selling for whatever the local dealer is selling .999 generic silver for. Otherwise $3 over spot (or more) is going to more than likely be the norm for SAE's in my opinion.
  12. Cloudsweeper99

    Cloudsweeper99 Treasure Hunter

    The coin shop near me is currently paying spot for ASEs, but has gone as high as $2 over spot depending on local demand.
  13. mystery45

    mystery45 Junior Member

    silver is in high demand right now because gold prices are so high it is the next available market. i have a wide variety of ASE i got when i bought some coins. i have 8 of them which i paid like 8 bucks for (several years ago). all in ms69 condition.

    the fact that silver is pushing 23 dollars is great news for me if i need it.
  14. fretboard

    fretboard Defender of Old Coinage!

    Alrighty then, good to know!!
  15. FishyOne

    FishyOne Member

    I wonder myself. Paying $28 for one ASE is too rich for my blood. I can buy 90% silver U.S. coinage under melt and that's a better to to me.
  16. Mr. Coin Lover

    Mr. Coin Lover Supporter**

    I have some ASEs I bought several years ago for $11.00 to $17.00 each, have a few 1996 ASEs I bought during the same time frame for around $25.00. At the current prices I see these ASEs going for now on ebay not bad.

    If I was going to buy ASEs as bullion I would look at buying complete sets, '86 to '10 on ebay. I've been watching their final closing price lately and it appears to me as the best way to purchase.

    I also have to say if one wants to buy ASEs or any silver bullion either buy this week, or sit back and watch this month. I'm sure I'll get slammed over this, but next month if I am wrong I'll take the heat. Always remember this advice is worth just what you paid for it...........nothing.
  17. kaparthy

    kaparthy Well-Known Member

    It is always best to diversify. Yes, it is true that 90% US is cheaper compared to the spot price of silver. So, is Canadian. You can buy Canadian silver coin, 80%, for less than melt. It is a great bargain. But, when it comes time to sell, you sell at the same range.

    Just because one coin store near someone pays as little as possible for ASEs says nothing. Who would not pay the least for something that sells well? And that is the point: ASEs sell well.

    Unlike 90%, which is .7234 oz to the dollar, they are 100% pure and one full ounce. Unlike bullion bars and private rounds, there is no question about who makes them. You and I might know Silvertowne and respect Engelhard, but we know more than most people. ASEs have a floor under them. They are instantly recognizable.

    Many a time, I have shown a Walker or a Mercury to someone who then says as a question, "Those are pure silver, right?" And when I say, "90%" (or worse yet, 900-fine), their smile disappears and I have facts to explain. With the ASEs, there are no facts to explain.

    Then, there are the mintages. Some years are rare. If you think a bazillion of anything is not rare, then why does anyone collect American coins? The US Mint struck about 4 to 10 million ASEs per year. Look in the Red Book for coins at similar populations, like Lincoln Cents, Shield, V or Buffalo Nickels, and so on.

    I agree 100% that we numismatists with our Bank of Upper Canada Tokens, City View Thalers, and Goetz Medals are way smarter about coins than the average person. But that is not the issue. The question is: When you go to sell, where is the value?

    Granted that you can always pay too much for anything, it remains that you also can find a bad deal selling ASEs ... if you look hard enough...
  18. quartertapper

    quartertapper Numismatist

    For many people, ASEs are worth the extra premium, because they are so widely recognized. I bought generic 1 oz silver rounds a few years back. I could see them going for a lower premium, especially to someone questioning their purity, or worse yet, if they are even silver at all. To my knowledge, there isn't a problem with counterfeit ASEs yet, but just give it time, or wait for silver to hit $40 per ounce.
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