Getting-Started Guide to Buying Silver

Written by Luke Burgess
Posted October 13, 2021

So you're interested in investing in precious metals.

But you think gold might be a little too pricey.

Well, you're not alone.

One of the first questions new gold investors have is “What about silver?”

And that makes good sense. Silver is more volatile and leveraged for higher investment gains than gold — and who isn't interested in bigger gains?

Right now, gold is trading on the COMEX for about $1,750 an ounce. That means for gold to return 100%, prices would need to smash through historic records, reaching over $3,500 an ounce.

The all-time record price for gold was set in August 2021 at just over $2,000/ounce — quite far from $3,500.

Even gold's 1980 inflation-adjusted high of about $2,600/ounce wouldn't give gold a 100% return from current levels.

Silver, on the other hand, is much less expensive, trading at about $22.50 an ounce. So for a 100% return in silver, prices only need to reach $43 an ounce.

And they have already done that... twice.

In 2011, at the height of the precious metals rally, silver traded for almost $50 an ounce.

Three decades prior, silver prices also nearly reached a nominal high of $50 an ounce in 1979 — for an inflation-adjusted high of over $180!

Silver Cash Price — 50 Years

Silver has an upside advantage to gold pretty much any way you look at it.

There are multiple different ways to invest in silver; mining stocks, options, and ETFs are among the most popular. But the absolute most direct and pure silver investment is physically owning silver bullion.

Buying silver bullion for investment sounds like a simple enough task. But the retail bullion market has exploded in growth in recent years, creating a unique set of caveats and complexity that could end up costing you money.

And with that in mind, we'd like to present a very brief guide to buying physical silver bullion today.

So let's start at the top...

What Silver Bullion to Buy

There are only two types of physical silver you should ever buy: coins and bars.

Retail sellers market all kinds of different silver products as investments; unfortunately, a lot of it is just junk. Those products include things like silver jewelry, unrefined nuggets, and industrial silver products like “shot” or "grain," which are BB-sized silver pellets used for jewelry making and repair.

g4ttSource: APMEX

Stay away from anything like this. Silver products like shot are very difficult to sell and ultimately impractical for any kind of real silver investment.

So right off the bat, if it's not a silver coin or a silver bar, don't buy it.

Among silver coins and bars, there's a huge number of options to choose from — tens of thousands. Major bullion dealer APMEX currently has 14,471 silver coin products listed on its website, and more are being added all the time. I swear, when I looked at this a few hours ago, there were 14,454 silver coin products.

g4ttgSource: APMEX

So which of these tens of thousands of silver bullion products should you buy?

Well, here's how I see it...

There are a lot of silver products that are bad investments.

There are some silver products that are decent investments.

There are few silver products that are good investments.

But there's really only one that's the best: the American Silver Eagle.

g4ttgjSource: APMEX

Now, I assure you that saying the American Eagle is the "best silver bullion product" is not some kind of patriotic delusion. The American Silver Eagle is not the best option for investors because “'Merica, f*ck yeah.”

The American Silver Eagle is the best option for investors because it's the world's standard for silver bullion coins.

The only other bullion coin that even comes close to the American Silver Eagle in terms of standard is the Canadian Silver Maple Leaf. But notwithstanding an extreme discount in price, the American Silver Eagle is going to be a slightly better option.

Both bullion coins are legal government tender, backed by their respective governments, have the highest standard of purity, and are IRA-eligible. But the Silver Eagle edges slightly ahead in terms of recognition and liquidity.

So if you want to buy physical silver, the American Silver Eagle is your best option.

But before you head off to the bullion dealer, there are still a few more things you should know.

First, the price of Silver Eagles is always higher than silver trading on the COMEX. Retail dealers typically price their bullion products at spot price plus a percentage over spot price to cover their costs and profit.

For Silver Eagles, premiums normally range between 15% and 20% over spot, depending on how many you purchase at once. And that brings me to the next thing you should know...

Do not buy American Silver Eagles individually or in anything other than groups of 20 coins. Don't buy one coin. Don't buy 10 coins. Don't buy 25 coins. Only buy Silver Eagles in groups of 20.

There are two good reasons for this. One, buying more coins at once lowers the seller's premium. As I began to mention, the more coins you purchase at once, the lower the premium will be.

But maybe more important to only buying 20 at a time: American Silver Eagles sell in standards rolls of 20 coins, often called "tubes."

g4ttgjrSource: APMEX

What's the big advantage to buying these coin tubes?

Well, take it from someone who's been down this road before: Owning a bunch of loose silver bullion coins is a pain in the ass.

It doesn't seem like it's going to be that bad. However, not only do they end up getting spread all around your house, but when you go to sell a bunch of loose bullion coins, you're going to have to put them in some kind of box or burlap sack, which is not conducive for moving around.

Trust me: Buy the tubes and don't aggravate yourself.

The best advice I can really give about buying silver bullion, or any bullion for that matter, is use your best judgment. I mean, which of these two silver bullion options looks more like a legitimate investment?


Don't try to get cute when buying silver bullion. Be pragmatic.

We hope this brief introduction helps you get started buying silver bullion.

Until next time,
Luke Burgess Signature
Luke Burgess

As an editor at Energy and Capital, Luke’s analysis and market research reach hundreds of thousands of investors every day. Luke is also a contributing editor of Angel Publishing’s Bull and Bust Report newsletter. There, he helps investors in leveraging the future supply-demand imbalance that he believes could be key to a cyclical upswing in the hard asset markets. For more on Luke, go to his editor’s page.

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