Here is an excellent guide to buying silver (and even gold) for the serious investor. It is written by fellow silver investor Jason Hommel. I would encourage you to sign-up to his newsletter if you’re serious about keeping up with what’s happening in the silver market.
Guide follows below:
The silver story is simple: Since the 1870’s, the trend has been to stop using silver as money (as a medium of exchange). This has reduced demand. Then, around 1945, electronics started booming, and since silver is the greatest conductor of electricity, a lot of silver has been used up. Today, the world has nearly run out of silver, just as paper money is beginning to fail around the world as gold begins to explode upwards in price. As investment demand returns to gold and silver for savings (as a store of value), like it will for no other commodities, physical silver prices will explode past them all, because monetary demand will return.
Therefore, I strongly suggest that you try to get the most physical silver for your money, and take posession of it. To do that, you ought to ask the dealer at your local coin shop the prices of the following items. (You can find your local coin dealer at a link below.) Prices sometimes change.
Types and Kinds of Silver Available
A. 1000 oz. Bars. –These bars weigh about 68 pounds, and vary about 10% as to weight. You may get a 908.8 oz. bar or a 1099.6 oz. bar, and the price is settled on delivery. These are the NYMEX bars. Benefit: Good for NYMEX delivery to the major exchange for delivery into a 5000 oz. futures contract, and thus, the most liquid for large buyers or sellers. Also, it is quicker to physically move them in large quantities, rather than moving hundreds of 100 oz. bars. Drawback: They are not suitable for smaller transactions, but they are always liquid if they are sold to a wise bullion dealer who knows what they are. The other drawback may be shipping, if you are on the west coast, since the exchange is in New York.
B. 100 oz. Bars. –These bars weigh 6.8 pounds, and are among the most popular with retail investors. They stack well, and make it easier to inventory than 1 oz. rounds or silver bags. Popular brands are Englehard and Johnson-Matthey. Those two brands cost a bit more than other brands, usually about 40-50 cents per ounce above the spot price, but that price may vary with market conditions.
C. Odd weight retail bars. –Stamped as 101.46 oz. or 51.23 oz., these bars cost less, and generally have a wider spread, due to the extra work it takes to calculate their value, and extra risk due to the lack of good brand name. To test that they are silver, try a simple ring test. Bang them with a wooden spoon, and if you hear a faint, quick, “riiiinnnngggg”, they are silver. Lead filled bars thud or thunk, and do not ring. But you may be able to buy these as spot, and sell them at spot, depending on the dealer. These are true “bullion” bars, and not found in quantity. Also, there is the 1 kilo bar, which is 32.151 ounces.
D. 10 oz. bars are also very popular, often harder to get, with a slightly higher cost, as they seem more “affordable” and are very neat to hold, and can act as “change” between the 100 oz. bars, and 1 oz. rounds.
A. U.S. minted Silver-Eagle. –This coin is .999 pure silver, and weighs one ounce. It generally sells for about $2.00 over the spot price, and is thus quite expensive. I don’t recommend these.
B. One-ounce “rounds”. –They are .999 pure silver, and weigh one ounce. These coins are like the Silver-Eagle, but they cost much less. They are minted by a private mint. They generally cost about 40-50 cents above the commonly quoted price of silver–also called the “spot” price. These are often very popular, and a very good choice.
C. U.S. minted coins, dated 1964 or earlier. –These are half dollars, quarters, or dimes that commonly circulated in the U.S. Called “Junk silver”, they generally contain no rare or special coins. Sold by the “bag”, each full bag contains $1000 face value of coins, such as 2000 half dollars, 4000 quarters, or 10,000 dimes. A “bag” weighs about 55 pounds. This is typically the cheapest silver you can buy, because there is a cost to melt it down to get the kind of silver that is needed by industry. But this kind of silver also can become very much in demand, such as prior to the year 2000, when people wanted “tradable” silver, and bags cost up to 25% more than other silver bullion.
D. Commemorative Coins. Often times, the public will buy silver at a rate of 10 times higher than the bullion content if it is made into “Elvis” coins or “Space Shuttle” coins, or “Princess Diana” coins. Often made by the Franklin mint and sold on late night TV, these are generally a rip off. People pay so much, and sell them to the bullion dealers only for the melt value. And you can sometimes buy these kinds of so-called collectables at the coin shops very cheap at just over the spot price, or ten times cheaper than found on TV.
So, what kind of silver is best? It depends on your situation. I own and like the 100 oz. bars, and the 1000 oz. bars the best. But that’s because I have a lot of silver. My friends and family typically like the 100 oz bars, 10 oz. bars, and 1 oz. rounds the best. For storing large amounts, the 1000 oz. bars are most convenient. The 100 oz. bars are troublesome in very large quantities–it takes much more work to move 200 of them than it takes to move 20 big ones. I also like the bags, but they may require counting with a coin counter which I have purchased, which takes more time. My kids like the one-ounce rounds the best. Most people find the 100 oz. bars fascinating to hold in one’s hand, and the 1000 oz. bars are typically considered too heavy to lift.
How to Buy Silver & Gold, and Where to Get It!
Beware! Don’t trade in your dollars (which are defaulted promises to pay silver or gold) for more promises of precious metal! What I mean is, we are clearly heading into another situation where delivery default is imminent!
The safest place to start buying precious metal is from your local dealer, which you can find in your local phone book — look up “COIN DEALER”.
Now you can search for a Coin Shop near you, online!
Search by name, by State, or by zip code!
If you take delivery in person when you pay, then you will avoid the risk of getting stiffed on a failed delivery. Start there, and start small. A dealer in your nearest metropolitan city may not have the best price, but you will get your silver if you walk out with it.
If you buy all that your local dealer has, then look to another, larger shop that might be a further drive away, and then you might consider one of the nation’s largest dealers who are not at the COMEX. If you order on the internet, or from a dealer far away from home, you may wish to place several orders at once, with several dealers, to protect yourself from a failed delivery.
And when you take delivery, get a safe! And also a gun! And maybe dogs. And perhaps a security system and alarm, or more depending on your situation. You can always protect your silver. The typical cost is 1% per year.
I have multiple large gun safes, each the size of a large refrigerator. I store it in various places, in secure locations, on property not registered in my name. It’s well hidden behind a series of 4 locked doors; armed security guards, along with security systems. They say you should be willing to spend up to 1% of the value of your silver, annually, on security. If you plan to hold silver for more than 10 years, you may be willing to spend more up front. I spent about 7% up front, and I spend about 1/2 of 1% annually. (I now have room to make silver my number one holding again, but I plan to buy more silver when the stocks get much, much more expensive.) Those who say they cannot afford security for their silver do not understand the concept of wealth, nor do they understand silver, nor security. If you actually have wealth, then by definition, you can afford to protect it. For example, if you have $5000 of silver, buy yourself a $50 lock box, or a $150 safe at Wal-Mart (maybe a floor safe), and maybe a dead bolt and solid core door for your closet. That would give you 4 locked doors, too: front door, closet door, floor safe door, safe door.
Where to Buy Bullion in Large Quantities:
The following dealers generally have, or regularly keep, over 100,000 oz. silver bullion in inventory: These are generally not places to call for small retail orders. The dealers in this category may or may not have the best prices, but they do have bullion in large size.
American Coin and Vault
5523 North Wall Street
Spokane, WA 99205
California Numismatics (will accept small retail orders)
Richard Schwary & Kenny Edwards
Miles Franklin Ltd.
1001 Twelve Oaks Center Drive Suite #1028
Wayzata, MN 55391
Contact: Andy Schectman
They believe their exclusive wholesaler is one of the top 5-6 wholesalers in size in N. America.
Minimum order $5000 –also publishes bid/ask quotes
David W. Young
Wexford Capital Management
113 Brenton Court
Stephens City, VA 22655
located in Grand Rapids Michigan
Dan Wagner (616)-813-0290If there are any silver bullion dealers who have at least 100,000 ounces worth of silver bullion in inventory on hand, please contact Jason Hommel at email@example.com
**The following locations may not have bullion in large size, but,
These guys publish BID/ASK or BUY/SELL prices:
http://www.bulliondirect.com/index.jsp –Like Ebay for bullion. I’ve not yet used it, I especially like bulliondirect, since they publish the bids and asks of various different sellers on a wide variety of bullion products. Silver is great size is more frequently traded here at the “nucleo exchange”.
http://amark.com/ –THE largest bullion dealer in the U.S.A. that will trade with the public. (That’s not a refiner, or major bullion bank, or miner.)
http://www.kitco.com –main page
https://online.kitco.com –bullion store
http://www.kitcometals.com –base metals quotes
http://www.kitcocasey.com –stock research and analysis
–Kitco is the largest and most popular precious metals web site, providing precious metals quotes, and base metals quotes, used by many in the industry.
(I advertise there.)
I do NOT recommend the kitco “pool” accounts. This says nothing about kitco as a buisness or whether they are trustworthy. This is simply a philosophical position that I have, whereby I recommend that you take physical delivery, and not let anyone else hold your gold and silver for you.)
Remember, the only way to prevent from being defaulted on a delivery default, is to bring your cash, in person, to a dealer and take delivery in person, that same day.
The easiest way to buy Comex Silver is through a precious metals brokerage firm such as HSBC bank, or http://www.fidelitrade.com that charges around 1% commission, plus delivery fees of about 2 – 3% depending on how far to ship. Or you could open a commodities trading account with any of the major brokerage houses who are most likely the bullion banks, and take delivery of your contract. There are several problems with this method.
First, is the most obvious. These are the paper contracts that are controlling and suppressing the price, that I believe must one day default. Second, the bullion banks, since they are the ones who are likely short silver, will try their hardest to talk you out of placing an order, or talk you out of taking delivery. I have actually had several bullion banks turn me down, and not open a commodities trading account for me when they heard I was going to take delivery of several futures contracts! Their hypocritical excuses are amazing! They will say on one hand that their commissions are too low, and thus, it’s not worth their time to open the account for you. And then, they will turn around and also say that you don’t want to order silver bullion because the commissions will kill you! Unbelievable hypocrites those shorts! They will also try to scare you with “assay fees” that will be assessed if you try to return 1000 oz. bars to the exchange! But they won’t tell you what those fees may cost! I’ve heard the assay fee is FREE if you use Brinks in Los Angeles!
“places to buy physical retail silver & gold”
These sites list prices for 90% silver bullion coins.
http://www.goldsilverbullion.com/LiveBullionQuotes.htm (Same people as above: wexford)