Investing in gold: How to invest in physical silver products

This week we will look at how to buy silver with a focus on the physical products available. Just as in gold there are funds that are based on silver. Buying in the stock market offers speed and accuracy but lacks the actual possession. Here are some of the options for buying physical silver.

The United States makes one ounce American Silver Eagles and Canada produces the Silver Maple Leafs. Other countries make silver products as well, but in America these are the two most popular government issued silver. Government products are popular as their weights and tolerances are very exact and backed by the country producing them.

There are a number of refineries that produce bullion products in silver today in popular sizes such as 1, 10, and 100 ounce bars. These sizes are sought after because of the ease in calculating the value of these items. Roughly 1000 ounce bars are also produced for the Comex market, but can be found in the open market as well. It should be noted that 100 grams and kilos are popular in other countries that use the metric system, and refineries have produced a host of different sizes.

Older refineries have produced odd weight silver. Rather than producing an exact size piece they would pour bars at a rough size then weigh and stamp them with the exact weight. An example would be a 101.56 ounce bar rather than a 100 ounce piece. With the sophistication of refineries today these bars are not nearly as popular.

Older U.S. Silver coins are also popular for silver enthusiasts. Silver coins produced in this country before 1965 were made with 90 percent silver and many are sold for just their silver content. A common misconception is that a $1,000 bag of old coins has that many ounces, when in reality it only weighs about 795 ounces and contains roughly 715 ounces of silver. These are popular because they are actually still money and easily recognized.

As far as value is concerned the government produced pieces carry the largest premiums. Old silver coins command a steady premium as the pieces were made by an exacting government as well. The widest variant in premiums can be found in refined bars. One ounce pieces are produced by a host of regulated refineries and come in numerous designs, but as you go up in size who made the bar becomes more important. The two most popular refineries are JM (Johnson & Matthey) and Engelhard. When it comes to larger bars other brands can be discounted much more heavily.

In the late '70s and early '80s a host of "homemade" bars flooded into the market. Many of these were produced without regulation and may not bring as much when being sold today. Oddly enough with the rise in silver prices we are seeing this trend again. People are manufacturing their own bars without regulation or registration. Be careful of the silver you buy. If it comes from an unknown source it may have to be re-refined again and thus the selling price for that silver would be much less. It is our recommendation that you stick with buying one of the many good known brands of silver.

• Allen Rowe is the owner of Northern Nevada Coin in Carson City.