Buying precious metals – in this case gold and silver – can be intimidating. They’re expensive and certainly possess a level of risk.
But so do every single kind of financial instrument on the planet, whether you’re talking about stocks, bonds, cash, real estate or agricultural commodities. You limit your risk with any type of investment by having knowledge of the product.
The stereotypical example is owning stock in the buggy whip industry. You notice you’re seeing more and more cars being driven. Most people would sell their stocks because they saw “the writing on the wall”. Others held on to the bitter end in the belief there would be a resurgence in the horse-drawn carriage.
Things didn’t work out so well for this latter group!
And so it is with precious metals (PMs) as well. You need to understand how things work with on both the buy-side and the sell-side of the transaction.
What follows is not investment advice to suggest you buy precious metals – when to get in and when to get out. It’s what I have seen in my PM store with regards to which types of gold and silver retain their value better than others.
One bit of advice: If you’re looking to do a “quick flip” to make a buck, don’t do it with precious metals. You will always buy PMs at a premium over the spot price of gold or silver, and sell them at a lower premium (and some times at a discount). You “make money” when the spot price rises higher than the amount you paid for the metal.
The list that follows are the most highly desired by buyers, thus they retain their market value better than other options when you need to sell.
The only common trait among all of these items is that they are all raw bullion – no special mint processed items such as Proof coins. They have no packaging that would prevent you from weighing and testing the items.
10. Any Size up to One Ounce Name Brand Gold Bars
The top of the heap in this field are Credit Suisse and PAMP Suisse. Other reputable mints are Engelhard, OPM, APMEX, and Johnson Matthey. Understand that with ALL gold – be it private mints or sovereign nations – if you buy fractional gold (sizes less than 1 ounce) you will pay an additional premium. Why? More people can afford to buy a 1/10 ounce bar than can afford to buy an entire ounce. Supply and demand!
9. One Ounce Name Brand Silver Bars
These are rectangular bars of 1 troy ounce of (at least) .999 pure silver. Stick with manufacturers such as Sunshine Minting, Johnson Matthey, APMEX, Engelhard, A-Mark, PAMP Suisse, NRT, OPM and SilverTowne. These will all have the purity and weight (expressed either as 1 troy ounce or 31.1 grams) stamped on the bar.
8. One Ounce Name Brand Silver Rounds
These are round coins of 1 troy ounce of (at least) .999 pure silver. Stick with manufacturers such as Sunshine Minting, Johnson Matthey, APMEX, Engelhard, A-Mark, U.S. Assay Office (this is NOT a government agency), NRT, OPM and SilverTowne. These will all have the purity and weight (expressed either as 1 troy ounce or 31.1 grams) stamped on the round.
7. One Ounce American Gold Buffalo
This ranking might surprise some folks, but the American Gold Buffalo coins are a bit of an oddity. Even though they are minted by the US government, many buyers shy away from them because they’re not that common. As a result, many coin shops won’t pay as high of a premium when you’re selling, since they’ll be sitting in their cases for longer than other more requested coins. Also, be sure that when you’re buying these, they have the original mint packaging (a vacuum-sealed bag of sorts) removed. Otherwise you can’t authenticate the weight.
6. Any Size South African Krugerrand
These are the “grand daddy” of gold coins for most buyers. They come in 1/10, 1/4, 1/2 and 1 ounce sizes. As noted above with the gold bars, the premium goes up as the size goes down. Don’t confuse these with the 1- and 2-Rand coins. These two coins are patterned after the British Sovereign gold coins, and have gold content of .1177 ounce and .2354 ounce, respectively. These two coins are VERY difficult to re-sell.
5. “Junk” Silver
This is the prototypical “rainy day” bullion. It is US dimes, quarters and half dollars minted in 1964 and older. It is bought and sold differently than other PMs – so get educated before you buy. They typically have a very low buying premium and strong re-sale prices. These are a favorite of many preppers as they are already broken down into small increments.
4. Any Size Canadian Gold Maple Leaf
These are my personal favorite type of gold to own. Canada makes extraordinarily beautiful coins, and have begun adding anti-counterfeiting measures to their coins in the past few years. They come in 1/10, 1/4, 1/2 and 1 ounce sizes. The older coins are of .999 purity, and the newer ones are .9999 (4-nines) purity. While the amount of additional pure gold contained in the latter coins is worth a little over a dollar, the market prefers these. These are also one of a handful of government minted coins that are made of pure gold. Pure gold is very soft, and as a result, these coins tend to get scratched very easily. While this doesn’t change the amount of gold in the coin, it can be a negative for buyers.
3. One Ounce American Silver Eagle
These are the most popular silver coin in the world. A beautiful, elegant and highly desirable bullion coin. You will never go wrong by purchasing Silver Eagles. The only reason they didn’t make the very top of the list is, because of their desirability, the premium for buying and selling them can occasionally swing quite significantly. My guess is that when demand is high, we see a sudden influx of the coins from sellers hoping to make a profit on the high premiums. Everyone goes “all in” at once, and it flattens the market price very quickly.
2. Any Size American Gold Eagle
The king of world gold coins. They consistently maintain their value even during turbulent market times. As with the other government minted coins, they come in 1/10, 1/14, 1/2 and 1 ounce sizes. Unlike the Canadian Gold Maple Leaf, the Gold Eagle is minted in 22 karat gold, so they stand up better to handling. The coin contains 1 full ounce of pure gold with the remainder being made of copper. As a result, these coins (just like the Krugerrand) weigh in at 1.0909 ounce.
1. One Ounce Canadian Silver Maple Leaf
My top choice for the best combination of low buyer premium and high resale value. The market loves these coins. You will never have difficulty selling these coins to private buyers, coins shops or online vendors. There is always a high demand for these great coins. The “spread” between what you pay for the coin, and what you could sell it for is usually the smallest of government minted silver bullion.
So there you have it – our opinion for the best gold and silver bullion to buy. Next week, we’ll be doing a post on the gold and silver to avoid.
If you’re thinking of buying precious metals, before doing so, consider buying our Beginner’s Guide To Precious Metals.
Want to know what NOT to buy? See our, “Top 10 Precious Metals NOT To Buy“.