PM Premiums

[aztecstargazer]

I have only recently begun an aggressive acquisition of silver. I like to start slow in any new field of study. It is an old habit from learning music. "practice slow". 

But I want to nail down my investment strategy. This means having a solid foundation for my silver stack. I always hear people recommend American Silver Eagles. But I also HATE this coin. It is boring to me. I also read somewhere that a coins premium is only relevant in it's country of origin. I am a fan of the Britannia. I find it to be a much more attractive coin. It changes its design every year. But does it matter if a coin is more collectible, via limited production? I know semi-numismatics are only viable for appreciation on the secondary market. But I don't know if the coin has to be graded. I know some mints are notorious for milk spotting. So does this affect the value of a coin? To what degree does the milk spot affect the value in contrast to scratches and poorly handled coins?

I know exposure to air can lead to "toning". But some people say toning can make a coin more visually attractive. Does any form of blemish on a premium coin in BU condition make it drop to spot price?

Any suggestions or tips would be much appreciated.

[Xander]

Bars are a good bet. I bought a couple of 100g bars from BYB on the forum, really nice bars.

[BackyardBullion]

@aztecstargazer 

Hand poured silver is one of the rare types of silver that holds it's premium and infact increases in value the more it tones over time!

Also you can handle it with bare hands and enjoy it rather than constantly worrying about milk spots or damaging it!

[aztecstargazer]

I am more concerned with the value of coins, as coins are more liquid. I know "custom" silver products have artistic value. However; The demand for these products is even more limited than premium coins. 

My inquiry is more about what drives the premiums in coins. Especially in the resale value over time. I now have a new found appreciation for the term "mint condition". 

But is there a reason a premium grows, and what are the underlying influences in PM premiums.  

[KDave]

If a coin is one of a series, it will appreciate or depreciate in line with the popularity of the series. The popularity of a series is dependant upon design reception, mintage numbers, quality of the finish, among other factors. 

For example, Australian lunar are a good bet, good quality finish that don't milk spot, popular designs so far and reasonable mintages for most denominations. 

Another example is the UK lunar series. Started well with good design but has deteriorated in design, the finishes are poor with milk spotting and bag marks consistently expected. They have a habit of changing the reverses too which puts people off, but who knows, perhaps they will become popular when the mint brings out the lunar tiger or dragon if the designs are good. The queens beasts are excellent designs, but suffer from the royal mints poor quality control as mentioned, so are more a gamble than the Australian lunar for example. 

There are other examples, such as the chinese panda, the older coins of which have low mintages and are much sought after, but the recent additions have been minted in the millions. This makes it difficult to see much appreciation in the new releases.

All imo. 

 

[breaktwister]

You mention that the Britannia's change their design every year.  That only applies to the proofs.  The regular bullion generally has the same stock design with the standing Britannia figure.  

[sovereignsteve]

20 minutes ago, breaktwister said:

You mention that the Britannia's change their design every year.  That only applies to the proofs.  The regular bullion generally has the same stock design with the standing Britannia figure.  

The bullions prior to 2013 were great; design changed nearly every year and very collectable and popular.

[HawkHybrid]

I see pm premiums like fine art. it's difficult to say

what will command high premiums. it's easier to

say which you feel you will not pay a premium for,

maybe due to it's lack of quality.

 

HH

[Pete]

Investing in silver bullion is taking a punt on the commodity price ( i.e. spot ) and is no different to buying any other commodity like oil, cocoa beans or orange juice. You are taking a view in the hope that you are buying low with the intention of selling at a profit later. Also, changing fiat into metals might for some be seen as a means of retaining real value to compensate for quantitive easing ( the printing of money which devalues the currency ) and inflation.

If this is your strategy then buying the cheapest silver bullion is what you want and sticking to popular coins like Eagles, Maples etc is what you want.
Why pay more for a 100 ounce brick of silver compared to 100 one ounce 999 coins ?

However, some coins retain a premium and may hold a market price regardless of the spot silver price.
These coins will cost much more as a percentage over spot and will generally hold their value but they may not rise with spot either.

Unfortunately there are no guarantees and I have seen the price of some Australian lunars double only to return back to Earth and also the premiums on say the Canadian Wildlife Wolf rocket and then return to normality.

I love the earlier Britannia coins but hate the new ones as QC has gone out of the door at the Mint.
I also admire and stack most of the Perth Mint series coins as they are superb quality and come in decent capsules.
Adding weight - ASEs and Maples are great in mint tubes and so are Mexican Libertads.
I kind of dislike Austrian Phillies because they don't have a reeded edge but they are highly polished coins.
As for premiums - follow the pricing of the Australian RAM kangaroo series - these seem to be rising all the time especially in Germany.
 

[whittington2308]

I had milk spotting on 7 out of 10 QB lions . Hope people of the future see this spotting as a 'unique fingerprint of history' or something like that and its individual nature commands higher premiums in the future. #notlikely

[Pete]

1 minute ago, whittington2308 said:

I had milk spotting on 7 out of 10 QB lions . Hope people of the future see this spotting as a 'unique fingerprint of history' or something like that and its individual nature commands higher premiums in the future. #notlikely

Bit like bird sh*t on my new car