Silver is by far what we buy and sell the most. We always stock a huge amount of silver coins, bullion and sterling jewelry.
We pay more than any of our local competitors for:
• American Eagles
• 90% Junk Silver
• Old Morgan Silver Dollars
• Old Peace Silver Dollars
• Scrap Silver
• Silver Bars & Rounds
• Generic Silver
• Jim & Engelhard Bars and Rounds
Silver as an Investment
Silver may be used as an investment like other precious metals. It has been regarded as a form of money and store of value for more than 4,000 years, although it has lost its role as a legal tender in all developed countries since the end of the silver standard. Some countries mint bullion and collector coins, however, such as the American Silver Eagle with nominal face values. In 2009, the main demand for silver was for industrial applications (40%), jewellery, bullion coins, and exchange-traded products. In 2011, the global silver reserves amounted to 530,000 tonnes.
Millions of Canadian Silver Maple Leaf coins and American Silver Eagle coins are purchased as investments each year. The Silver Maple Leaf is legal tender at $5 per ounce, and there are many other silver coins with higher legal tender values, including $20 Canadian silver coins. Silver is legal tender in the U.S. state of Utah and can be used to pay all debts.
The Hunt Brothers (Nelson Bunker Hunt and William Herbert Hunt) took a huge position in silver using leverage (borrowed capital, such as margin debt), to become some of the largest private holders of silver in the world.
Because of their unusually large stake in the rapidly appreciating commodity, Nelson Bunker Hunt and William Herbert Hunt, the sons of Texas oil billionaire Haroldson Lafayette Hunt, Jr., were accused of attempting to "corner" the market in silver in order to manipulate its price.
From 1973 the Hunt brothers began what was seen as an attempt at cornering the market in silver, potentially contributing to a spike in price in January, 18 1980 of the London Silver Fix to $49.45 per troy ounce. Silver futures reached an intraday COMEX all-time high of $50.35 per troy ounce (intraday CBOT all-time high was $52.80) and a reduction of the gold/silver ratio down to 1:17.0 (gold also peaked the same day in 1980, at $850 per troy ounce).
In the last nine months of 1979, the brothers were estimated to be holding over 100 million troy ounces of silver and several large silver futures contracts. However, a combination of changed trading rules on the New York Mercantile Exchange (NYMEX) and the intervention of the Federal Reserve put an end to both their holdings and their potential for profit on the commodity. By 1982, the London Silver Fix had collapsed by 90% to $4.90 per troy ounce.
In 1979, the price for silver jumped from about $6 per troy ounce to a record high of $49.45 per troy ounce (on January 18, 1980),which represents an increase of 724%. The brothers were estimated to hold one third of the entire world supply of privately held silver (not counting the silver held by governments). The situation for other prospective buyers of silver who had not stocked up on the metal in advance of its bull run was so dire that the jeweler Tiffany's took out a full page ad in The New York Times, blaming the Hunt Brothers for the increase in price and stating that "We think it is unconscionable for anyone to hoard several billion, yes billion, dollars' worth of silver and thus drive the price up so high that others must pay artificially high prices for articles made of silver".
On January 7, 1980, in response to the Hunts' accumulation, the exchange rules regarding leverage were suddenly changed, and the COMEX adopted "Silver Rule 7", placing heavy restrictions on the purchase of the commodity on margin, causing massive liquidations and enormous downward pressure on the price. The Hunt brothers had borrowed heavily to finance their purchases, and as the price began to fall again, dropping over 50% in just four days due to the sudden forced liquidation of margin positions, they became unable to meet their obligations, causing further panic in the precious metal markets.
The Hunts were never found guilty of any criminal wrongdoing, though later on, they lost a civil suit to a Peruvian mining company who had lost money during the events of the silver boom and bust. Throughout the 1980s, the Hunts' considerable fortune dwindled in the aftermath of these events, and they eventually filed for bankruptcy. In 1989, they agreed to a civil settlement with the Commodity Futures Trading Commission, paying out fines, and agreeing to a ban from trading commodities.
Highest Recorded Silver Price
London LBMA $49.45 (Jan 18) $48.70 (April 28)
New York COMEX $48.70 (Jan 17) $48.55 (April 29)
The price of silver is driven by speculation and supply and demand, like most commodities. The price of silver is notoriously volatile compared to that of gold because of the smaller market, lower market liquidity and demand fluctuations between industrial and store of value uses. At times, this can cause wide-ranging valuations in the market, creating volatility.
Silver often tracks the gold price due to store of value demands, although the ratio can vary. The crustal ratio of silver to gold is 17.5:1. The gold/silver price ratio is often analyzed by traders, investors, and buyers. In Roman times, the price ratio was set at 12 (or 12.5) to 1. In 1792, the gold/silver price ratio was fixed by law in the United States at 15:1, which meant that one troy ounce of gold was worth 15 troy ounces of silver; a ratio of 15.5:1 was enacted in France in 1803. The average gold/silver price ratio during the 20th century, however, was 47:1.
Physical bullion in coins or bars may have a premium of 20 percent or more when purchased from a dealer. Silver bullion bars have been available for purchase at a premium of less than 7% over the Comex spot price for much of 2015 and early 2016,while government-minted coins still command a much higher premium.
Physical coins generally have a higher premium, for example silver eagles coins released from the US mint at a $2 premium to official distributors who then sell coins for a mark up of $2.30 to $2.50 to customers depending on market conditions.
In recent years ecommerce growth in the physical bullion industry has seen premiums reduced for retail investors to purchase products online with door to door shipping. Many online dealers provide international shipping and weekly discounts on a wide range of products.
The chart below reflects gold/silver prices from 1840 to 2015.