"Isn’t an ounce of silver an ounce of silver? Why should I pay extra for one coin over another?"
That’s a question my friend and colleague Steve Shepard recently asked before he made his first silver purchase.
He wanted to make sure he got the best bang for his buck, and he was looking at some of the "generic" silver rounds from vendors like Kitco and APMEX. And I can see the temptation of buying the generic rounds. Depending on the volume of your purchase, you could save over $2 per coin. On a $30 coin that’s a 6% premium.
And I’m not saying that you should totally avoid generic rounds. As Steve points out, an ounce is an ounce. But before you buy these rounds instead of buying a better recognized coin like the American silver eagle or the Canadian maple leaf – you need to ask yourself why you’re buying silver in the first place.
If you simply plan on holding these rounds for a period of time and then selling them back to the vendor you bought them from (I always recommend buying from vendors with some sort of buyback guarantee) then you’ll probably be served fine with rounds.
My main concern about rounds is that I simply don’t believe many people recognize Kitco as a coin minting authority. That’s not a knock on Kitco. But people are just much more likely to recognize a coin minted by a government mint than they are by a coin vendor.
It’s a gut feeling – and if you disagree then don’t let my gut feeling get in the way of buying rounds instead of well-recognized coins.
But – I don’t see how you can disagree when you put a round up against an eagle or a maple:
I received another question – this time from a Resource Prospector subscriber:
"I’m looking to buy silver (first time buyer). Do you still buy your silver from Kitco? Do you have any seller recommendations?
Thanks for writing, GM.
I do buy from Kitco. I last purchased from them a few weeks ago. I don’t receive any compensation for saying so, but I buy from them strictly because I’ve always had great customer service from them.
I don’t know about many other vendors, but I know APMEX has competitive prices. I like Blanchard for gold coins – simply because they have a good selection for somewhat competitive prices.
One last note: I currently do not own ANY silver or gold ETFs. I prefer my precious metal holdings to be in my hands.
The only way I’ll use those ETFs is to create income with options. I’m not saying all precious metals ETFs are baloney, I’m just telling you that I have a strong preference to keep my gold and silver close and secure.