Silver Eagle markup

Hello all,

I would like to start purchasing silver eagles as a hedge against inflation. I am curious what you guys think is an appropriate markup over spot price for these coins.

Spot is currently around $12.80 / oz for silver and most dealers in my area are selling the coins (2007) for around $17. Does $4 per coin seem like a reasonable markup? Or is it a giant waste of money? My investment would have to appreciate 30% just to cover the dealer markup!

Any insight is greatly appreciate, thanks so much.

-Eustacian

 

Log in or Sign up to hide this ad.

I'm no expert on this subject but I am a collector of ASE's as well as bullion silver. I collect and don't sell.

Eagles are bullion silver and can therefore be sold as such. But they are also numismatic collectables which can give them a premium over spot silver depending upon their condition and rarity.

The numismatic market seems to be growing and the interest in ASE's "seems" to growing as well. Silver is up and down but climbing over time. It is hard to say if silver goes up to 17 an ounce will this coin be worth 21. Demand will dictate coin value over silver....I guess.

For me I expect my bullion coins and silver rounds will be worth much much more then what I paid because I will be holding on to them for decades. I would buy silver now that it has dropped because I believe it will come back well over 14 an ounce in no time. Just my opinion, just what I believe.

If your just starting to collect eagles get them asap. My collect has almost doubled in value in the last few years.

 

Walter.
Very well said I have to agree with you 100%.

Bruce.

 

Welcome to Cointalk!

Common date, gem uncirculated ASEs typically sell for about $2.50 over spot, and most dealers are asking about $3.00 over spot for 2007 eagles. Typically, the price you pay at a local dealer will be higher than an internet dealer's or a dealer that handles primarily bullion, so if you are looking to buy a large quantity, you should hunt around for the best price before buying. Also, since you seem to be interested in buying silver as cheaply as possible, is there any particular reason you are considering silver eagles? Generic silver bars and rounds easily be acquired for 35 or fewer cents over spot. - Just a few ideas you may want to think about before buying.

09S

 

why I want to buy silver eagles

Thank you all for your replies.

To answer the question about why I wish to buy silver eagles vs. bullion bars, the answer is simple. I expect the greenback to become worthless soon (like it isn't already) and I think the silver eagles will be useful as currency. Being minted by the government, people will be more likely to accept them, I assume.

Why not gold coins? Partial and full ounce gold coins will be used the same way I guess. But it's easier to go to the grocery store with a $12+ silver coin than a $600+ gold coin. I mean, what are they going to give you as change for your gold?

I have to admit I'm completely unknowledgeable about coins. COMPLETELY. But I do think I've got a pretty good handle on how the financial system works, and these are the crazy conclusions I've come to.

Anybody got any comments? Is my thinking screwy? What do you think would be most likely to replace the greenback as currency?

-Eustacian

 

Hi Eustacian,


Well, I don't know about the greenback becoming worthless, but I do think that gold and silver are in a long term bull market and will be worth more tomorrow than they are today.

The silver eagles have a slightly higher premium just because they're american silver eagles. For example, they're marked up a bit more than canadian maple leafs. And both, being actual coinage of a country, are marked up more than a plain vanilla 1 ounce silver 'round' or a silver bar.

The cheapest (closest retail price to the spot price of silver) way to amass bullion is to buy silver rounds or ingots. While rounds come in 1 oz, ingots come in 1, 10 and 100 oz sizes.

With any purchase, there is a discount for quantity and silver eagles and bullion are no different.

Note that you can also buy plain circulated 90% silver U.S coinage by the face value amount or even by weight. For example, you can buy $100 face value in mixed pre-1964 US silver dimes, quarters, and halves. If you plan to be able to use this stash of silver in trade, this might be the best way to go. In round figures, $100 face would be around $900.

If you surf over to www.apmex.com, and click on silver bullion, you'll find about the best selection and prices around.

Of note to board, I was buying near the close - added to both my holding of the Central Fund of Canada CEF and the silver ETF SLV. Monday, should prices remain this low or lower, I'll be on the phone to buy some more eagles. I already bought my annual roll at $285, but need to buy some mid-90's to complete the grandkids ASE albumns.

peace,

rono

 

Sage advice.

 

Last weekend, silver was $14.65 or so, and I got 10 scratched ones for $15 each. I also got a NGC MS69 1996 one for $80.

 

Hey, I have a site for you to check out, (that deals with Gold and Silver vs FRNs )but I can't e-mail or PM you....

Drop me a line so I can reply to you and I'll send you the site link...

Its not my site, but I think I'd get smacked by one of the for advertising another site if I post it here...

 

In general, local dealers will not have the best prices for these things. As someone mentioned, APMEX has good prices (about the best I've found) at something like $1.25 over spot.

You may also want to stock up on 90% silver coinage. It generally sells for less and it's more divisible than a 1 ounce coin.

You may also want to look at the Gold is Money forums. They tend to discuss exactly what you mention more frequently than people do here. Generally most people here are looking at coins rather than accumulating silver/gold reserves.

 

Very interesting about the pre 1964 US coins. Thanks for the info Rono! I immediately went through my change bucket and found a 1964 dime pretty quickly. Might be more silver left in there!

I'm going to hit the coin shops tomorrow and pick the owners brains. Specifically I want to know if there is any threat to buying silver rounds that aren't minted by the Government. How can you prove to someone it's real silver short of sending off for an assay? Does this even matter?

Finally, I started off by asking what to expect for a dealer markup when BUYING silver. When SELLING, do they offer the previous day's closing price? Do they discount? Do they take a commission?

 

Welcome aboard,Eustacian.

Aidan.

 

Welcome! So are you looking at them as sole investment, not for collecting puposes? If so, look around the internet, see what you can find. Where is it that you can get it as cheap as 35 cent over spot VDB? Cheapest I can find is APMEX. Not saying there isn't a place, just never found a place that cheap.

Phoenix

 

All dealers are different, most offer just spot... APMEX sells at about $2 over spot (only $1 over spot for damaged coins), but they buy back at $0.40 over spot. They buy back all other silver bullion at spot itself. This makes sense only if you are selling them mexican libetads and maple leafs (most issues trade close to spot)

 

Couple of things. Realistically I don't think the greenback is going flop anytime soon. Second, I believe it was Joe G. from WINS that had a contest asking people back in July/Aug what they thought silver prices would be this past December. I said 13.81 and was almost right on at the right time.....almost. Anyhow I'm hoping the big fall in silver price was reaction from the Dow falling 416 pts and nothing more. But for some reason I think the "bullness" of this market will fade by summer. Its been going stron for so long now plus I don't think the ecomony wil stay afloat much longer. The markets (world) seem shaky and Greenspan said the "R" word in a speech the other day. Seems like its time for a market correction. I HOPE NOT!!!!! I'm gonna hold off til summer to buy. We'll see if I was right! Have a great weekend everyone!

 

I buy at Coast to Coast ABOUT $1.35 OVER SPOT.
For Silver I love the 40% Kennedies.
At $12 SILVER you get the following face values:
40% Silver = $3.37.
90% Silver = $1.38.
War nickes = .88 per ounce
Eagle is = $1.00 but you pay spot preminum.

If Silver crashes you still have the face value. This meant alot more when silver was in the $6-8 RANGE.

 

I agree, In fact that is the site I was going to mention to him had he contacted me...

Great site, I learned alot about accumulated Silver and Gold... I read that site and this one daily...

 

I just got 8 scratched/cleaned/etc ones at .13 over spot at my local dealer (13 each vs. 12.87 spot)

 

Howdy again,

With coins as with anything else, there is wholesale and retail and the spread is sometimes referred to as vigorish or the vig. It's like selling and buying a used car. No different.

So, if you want a silver eagle, most good buys are going to be anywhere from $1.50 to $3.00 over spot. Plain silver rounds might be $1-$1.50 or so. However, when you go to sell them, most good dealers would offer you more over spot for the eagles than for the plain silver round - not as much as they charged you, but more. The difference is the spread.

Now if you're going to go with silver rounds look for name brand stuff like Johnson & Matthey or Engelhard - it'll be stamped on them and makes them more fungible.

In all honesty, if you're building a hoard, you probably want to own a variety of bullion types - silver eagles, plain silver rounds and ingots (you can get 1, 10 and 100 oz bars). I'd also get a few hundred dollars FACE value in pre-1964 US silver mixed coins.

As for gold, you can do pretty much the same thing. Even gold eagles come in 1 oz, 1/2 oz, 1/4 oz, and 1/10 oz. Via some place like apmex, you could buy and stash some of the smaller sizes. And platinum comes the same way, but I doubt you could spend platinum for goods and services on any market . . . a 1/10 oz gold eagle would be a different story.

And again, I'm not saying that the dollar is going to hell, etc., just giving you some ideas on how you might wish to proceed.

peace,

rono