Why is Silver Bullion More Valuable Than Other Silver Items?

When economic uncertainty arises, people flock towards precious metals. Silver is one of the most popular options for these purchases, but some individuals don’t realize that this white metal comes in a variety of forms. And silver bullion is far more valuable than its counterparts.

As demand for precious metals goes up, consumers often buy anything that contains silver. This helps explain why scrap silver prices escalated on eBay right when the U.S. Mint had difficulty meeting demand. When you’re investing in precious metals, though, it’s vital that you know what you’re getting.

The important thing to remember is that “silver bullion” and “silver” are not synonymous. Once you recognize this, you can make more informed decisions for your precious metals investing.

What Is Silver Bullion?

If you’ve ever invested in precious metals — or even performed research on doing so — you’ve certainly heard the word “bullion.” Unfortunately, therarely comes with an explanation of what it means. This is why so many people think they’re getting bullion when really they’re not.

Silver bullion is an item containing high levels of concentrated silver. Most definitions require that an item be 99.9% (i.e., 999) pure to qualify for the label. We also refer to this as pure or fine silver. Unfortunately for those who don’t do their research, many silver items have a much lower purity.

Investors who purchase multiple precious metals must distinguish between silver and gold bullion purity levels. Gold items must only contain 99.5% of the metal to earn the “bullion” label. Since gold is more malleable than its silver counterpart, additional alloy metals ensure durability.

Other Types of Silver Items

You’ll find most silver bullion items are either coins or refined bars. Many other products made from the white metal, however, contain lower percentages of silver. This doesn’t necessarily make them bad investments, but you’ll certainly need more for the same precious metal content.

For instance, a 5-ounce silver bar contains five ounces of 999 silver. To get the same amount of precious metal with jewelry silver, you’d need a piece that weighs over six ounces. That’s because jewelry silver only has a purity of 800.

The following is a list of different silver purities you’ll encounter:

• Fine or pure silver: 99.9% purity
• Sterling silver: 92.5% purity
• Coin silver: 90% purity
• Jewelry silver: 80% purity

The most important thing to distinguish in this list is that coin silver is not silver bullion. While you will find bullion in coin form, “coin silver” refers to items made from melted silver circulation coins. Many pre-1965 American coins contained 90% silver, so these older pieces can be valuable.

While these purities vary immensely, their values typically fluctuate equitably. For instance, envision a situation where the price of silver doubles — something many experts believe will occur. While the value of bullion and sterling items will differ, all respective items will double as well.

Beyond Silver Fineness: The Value of Bullion

Each of the purity levels we’ve discussed add significant value to the items they identify. Of course, there are many other silver items that don’t come near this value. Silver in circuit boards or engine bearings can offer even lower levels of the metal.

Even when we focus on higher purities, though, silver bullion stands out from its contemporaries. That’s because bullion items carry a variety of added benefits that sterling products can’t match. The following are just a few of the reasons bullion stands out in value:

Higher Liquidity

If you have the option to buy a melted down circuit board metal or a bullion product, which would you choose? Like most people, you’d probably opt for the latter. It’s a simple fact that bullion items carry higher liquidity.

While you may find scrap jewelry for lower prices than bullion, there’s a good reason behind that. People prefer the beauty, ease of storage, resale value, and other benefits of buying silver bullion.

Loss of Jewelry’s Value

There are plenty of people out there who prefer jewelry silver over bullion. This really comes down to personal preference, but it’s understandable in a way. Not only will a person have a solid precious metal investment, but they’ll also have a beautiful fashion accessory.

Unfortunately, it’s often a designer’s name you’re paying for when you purchase jewelry. You’re not going to find silver jewelry priced based on its metal content. So if you want to buy something merely for investment purposes, silver bullion is a far better choice than jewelry.

Lack of Refining Costs

Scrap silver is silver that no longer has value in its original form. Think of outdated circuit boards and broken jewelry. While people will no longer purchase these items for their original purpose, they will covet them for their precious metal value. Unfortunately, they may be unable to sell them near spot price.

That’s because these items will eventually have to go through the refining process. Broken necklaces, circuit board metal ingots, and other scrap pieces must get made into something valuable. This means many buyers will calculate future refining costs into their offer.

Since silver bullion is exactly what it’s supposed to be already, its value far exceeds that of scrap items.

Silver Bullion Is More Trusted

Whenever silver prices rise, we see an increased frequency in silver fraud. People fall victim to everything from fake necklaces sold in parking lots to low-quality ingots made from scrap. However, when you buy bullion, you typically get a guarantee.

Whether it’s a government mint or a private refinery, trusted sources offer authentic bullion. Of course, this only applies if you’re buying from reputable sources. A coin advertised as “silver bullion” will not be real if it’s sold by a scammer online.

Silver Bullion Coins vs Bars

By now, it should be apparent that bullion is the way to go when investing in silver. Of course, now you have to choose between buying coins or bullion bars. While it’s easy to assume there’s no actual difference between the two, this couldn’t be any further from the truth.

The easiest way to decide between silver coins or bars is to know the benefits of each.

Benefits of Silver Bars

Lower premiums

You’ll typically pay a higher premium for an American Silver Eagle rather than a 1-ounce silver bar. It simply costs more to produce coins.

Easier to Store

Silver bars are much easier to stack than rolls of coins. Their shape also means there’s far less wasted space when in storage. Once you start investing in higher quantities of precious metals, storing your items becomes a major factor.

Investing Only in Silver Bullion

The primary purpose of bullion is for investing. Of course, we already know that coinage carries a higher premium than bars. That’s because coins still carry additional artistic and collectible value. With bullion bars, you’re investing strictly in the precious metal — nothing else.

Are Silver Bullion Bars or Coins Better?

There is no single correct answer for whether bullion bars or coins are better. You must consider your own investment goals and what you hope to gain from your purchase. The answer may be different for everyone.

Of course, the fact remains that bullion items always trounce the value of other silver products. The big lesson is to know what you’re paying for. Silver in any form or purity can hold value, but you don’t want to spend more than an item is worth.

Start Investing in Silver Bullion Today

When silver prices go on the rise, anything containing the precious metal becomes more valuable. Unfortunately, many items won’t see significant increases in value due to lowered purity or heightened secondary costs. This is why investing in high-quality bullion is so important.

At Silver Gold Bull, we want all your precious metal purchases to be profitable investments. That’s why we offer a variety of silver bullion items to choose from. Whatever your investing goals or strategies might be, we have something to fit into your plan.

Visit our Purchase Silver Items page today to see all our offerings. Our online selection is not only one of the largest, but our Best Price Guarantee will also ensure you get the most value for your investment.