Precious metals are a very intriguing investment to so many who collect coins, as they go hand in hand with old coins. This, combined with some of the amazing designs that are oftentimes found on bullion pieces makes them very intriguing investments for coin collectors. Unfortunately, many people are hesitant when it comes to investing in bullion because they do not know how to start when in reality there are so many great ways to get started, as the market is not as confusing as it may seem. I have personally made multiple mistakes when I started investing in bullion I will never forget the first ounce of silver that I purchased four years ago for $22. At the time, I thought it was a great price but silver has not reached those levels since. Another silver purchase that I will never forget is a one-ounce silver buffalo round that I purchased for $15.5. Silver has not been that low in years, but I am starting to think that it might not be authentic. Hopefully, this article will help prevent you from making some of the mistakes that I made. Personally, I recommend having your first few bullion purchase be small, and spend more and more as you obtain more knowledge and experience. Fortunately, the mistakes that I made were on a one troy ounce level, where I do not mind holding onto the pieces. Before you make your first billion purchase, I strongly recommend studying and familiarizing yourself with the market first. When studying the market, there are various concepts that you have to understand to know if you are getting a fair price. First and foremost, about every piece of bullion that you will buy will have a premium (an added dollar amount above the melt value) attached. This is because, there are costs involved with producing bullion, storing it and trying to sell it; which is passed on to the investor. Additionally, the smaller the bullion piece the larger the premium is on a per ounce basis. This is because it takes more resources to breaking a hundred ounces of raw material into a thousand bars than it would break it down into just ten. Fortunately, this is a universal concept among precious metal dealers and investors, which means that they will oftentimes pay more for a tenth-ounce gold piece on a per-ounce basis than they would for a ten-ounce gold piece. With this being said, the same goes for larger bullion pieces. When it comes to bullion pieces that are quite large, most dealers charge a very small premium over spot but tend to pay a bit less than spot when you are selling the silver back. Also, it is very important to note that all bullion is weighed in troy ounces as opposed to the customary system many of us are used too. There are 31.105 grams in a troy ounce as opposed to 21.34 grams. Additional, there are about 14.5 troy ounces in a troy pound as opposed to 16 ounces in a pound. Another major component of bullion investing is the company or government that produced the piece you are buying. The pieces that are most preferred by investors (and collectors) are those that are produced by a government as they typically have some sort of legal tender status, a limited mintage, and a very high-quality design. Next, are those silver rounds and bars that are produced by well-respected companies such as Engelhard or Sunshine Mint, or the pieces that simply have a very nice design. (As a side note, colorized bullion pieces typically have a premium.) Lastly, are those bullion pieces that are produced by private companies which are desired simply because of their low premium. An area of the bullion market that confuses a lot of people is that of the higher priced, 35 to 50 or 60 dollar silver coins that look so cool. When considering these pieces, I strongly recommend that if you are going to purchase something, get an item that is from a series that has been in production for a while, such as the Perth Mint map shaped series. Next, I would go to eBay and look at sales records for the piece to make sure that they typically sell for a price that does not bother you for being too low. Over the past forty years, many governments from all around the world have produced hundreds of different silver bullion pieces, where dozens of new designs come out each year from Palu, Perth, Niue, the Cook Islands, and more every year. Keep in mind, that there are dozens and dozens of different pieces with mintages that range from five to ten thousand coins which mean that the small mintages do not lead to extremely sharp premiums like they would on US coins. This is especially considering that very few people are trying to build a specific set of any particular modern coin series. Another major area of bullion investing is that of older coins, where liquidity, premiums, and multiple collectability really comes into effect. In regards to silver coins, there are multiple areas that you can invest in, where 90% silver half dollars, quarters, and dimes of United States origins are the most popular. Fortunately, they typically sell for the highest premium and are the easiest to sell. These coins were produced prior to 1965 and were meant for general circulation, but most coin and bullion dealers tend to purchase them for a bit less than their melt value because they are not pure silver. Still, there are other opportunities to add value to your holdings beyond the bullion content, which is where multiple collectability comes in. When purchasing 90% silver coins, you can oftentimes find pieces that have a historical aspect to them where Mercury Dimes, Franklin half dollars, Standing Liberty quarters, and even older coins can be found, which sell for a higher premium because they are older! Additionally, keep on the lookout for them in your pocket change as on occasion they can be found, which are nice finds when found! The other component of the US bullion market when it comes to coins consists of 35% and 40% pure pieces. Half dollars minted from 1965-1970 are 40% silver, which at the moment is not very popular and therefore make great investments as they are oftentimes found for a very low premium. Additionally, some Eisenhower dollars were also composed of 40% silver, but only the pieces that were specifically minted for collectors which are something that confuses many people. 35% silver war nickels are in a similar situation that the 40% silver half dollars are, but they have more history attached to them. This makes them more collectible, where a good premium is applicable when they are sold in entire date sets. The situation is similar for gold coins, where amazing gold coins from history can be purchased primarily for their bullion content! Another area of the bullion market is that of older coins from all over the world. This portion of the market isn't as strong as the one for US coins, but it is definitely still there. Dealers tend to pay even less for these coins as they do not sell well, where they tend to sit in dealer's inventory for a long time. However, their low premiums and the fact that there is a historical aspect to them makes them great investments. Another major component of investing in bullion are the unfortunate fake pieces. Unfortunately, there are many fake bullion pieces that are currently on the market, where too many people all too often get ripped off. Fortunately, there are ways that you can protect yourself from the financial harm that they cause. When it comes to smaller bullion pieces, oftentimes up to the size of two or three ounces, when they are counterfeited they are typically made by being produced out of a base metal as opposed to a precious metal; or they are just a base metal that is plated in silver. Therefore, when testing for authenticity the first thing that you are going to want to do is pull out a small magnet to make sure that the piece is not magnetic. Then you are going to want to weigh it to make sure that it weighs the proper 31.1 grams if it is supposed to be an ounce (it can be real and weigh a tenth or two of a gram more or about a tenth of a gram less in some situations.) After that, you are going to want to do what is known as a ping test, unless if the piece has some sort of artistic quality to it that attributes to its monetary value, such as the silver Kolas or even a privately minted round that has a nice look to it, unless if you have cotton gloves. When conducting this test, put the center of the coin on the tip of your finger; then get something hard like a pen and tap the edge. You should hear a long resisting ring, and they even have apps such as "Bullion Testers" and "Coin Ping" that will help you determine if a one-ounce bullion piece is authentic or not.
Bullion is a great way to protect, and increase your wealth in the long term.I really hoped that this article provided you with a great introduction to the bullion market, so you can explore it and have your first billion purchase be a good one! Currently, multiple silver coins are available on Let's Start A Coin Collections Ebay shop, so please check that out; have fun collecting! file:///C:/Users/brand/Downloads/google1e750597dd8642a3%20(3).html
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Author: Brandon Spiegel.
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