Reasons Why Silver Eagles Are More Expensive Than Other Silver Bullion
The U.S. Mint produces the most popular silver coins in the world, the American Silver Eagle. Because of their unique design and the craftsmanship demonstrated by the U.S. Mint, they carry a premium over other silver coins.
The U.S. Mint and Uncirculated vs Circulated Coins
It’s worth noting that the U.S. Mint, along with other mints, make coins and other bullion for profit. This is not an easy endeavor. When considering things such as design, production process and packaging, a lot goes into making and selling American Silver Eagles. It would not be wrong to think of it as buying any other product from a retailer. The more valuable the product, the more goes into packaging, advertising, distribution, etc.
The U.S. Mint produces different versions of American Silver Eagles, including uncirculated and proof coins.
Uncirculated
Uncirculated American Silver Eagles usually referred to as brilliant uncirculated (BU), contain one troy ounce of .999 pure silver. With a face value of one dollar, they are typically what can be found in most buyers’ collection. The costs associated with delivering this coin includes everything from the silver content, the minting process, and distribution costs. Buyers cannot purchase uncirculated American Silver Eagles directly from the U.S. Mint. The Mint sells to bullion dealers and wholesalers, such as Metals.com, who then sell directly to the public. A premium of a few dollars over spot price is common when dealers sell silver coins to the public.
Proof Coins
Ideally suited for coin collectors, the American Silver Eagle proof is struck multiple times, resulting in a more detailed and frostier look when compared to other coins. Proof coins are usually contained and sold in protective cases or boxes and carry a premium over the spot silver price. This high premium is due to the additional cost required to make proof coins, including being struck multiple times and using special dies. The proof coins may also include certificates of authenticity. Unlike uncirculated silver coins, the U.S. Mint does actually sell proof coins directly to the public in addition to dealers and wholesalers. While uncirculated coins may carry a premium of a few dollars over spot, proof coins may carry a premium that is up to three times the spot price.
Dealers and Wholesalers
Once the silver coins are sold to dealers and wholesalers, they are then marketed and sold to the public. Whether the dealer is selling online or from a physical store location, there are additional costs associated with running their business. These additional costs are factored into the price the public pays for silver coins. Whenever a dealer shows the spot price of silver, the actual selling price for an oz will carry a premium, thus the final price paid is more than the spot price shown. This is not unusual, as dealers and wholesalers can buy silver coins in bulk, so their per-coin price will be significantly less than what the coin is sold for at retail.
When considering American Silver Eagle coin, it’s important to remember that different kinds carry different price differentials, based on weight, size, style and type (uncirculated compared to proofs). The more the buyer knows, the better off they will be in making informed decisions when it comes to buying silver coins.
The Metals.com Staff
