Silver – From the ground to a coin

Silver is a rare metal that is used to make coins, rounds, and other products but it is easier to come by than other rare and precious metals. This is because the mining process, as well as the silver refining process, has been greatly improved over the years. Silver is been used for many things and but more than anything it is used as currency. Silver’s unique properties also make it an ideal metal to use in many industrial applications.

The history of the use of silver as coinage is long and very rich, but a very small percentage of silver in the world is used to make coins. Most coins in circulation are made of alloys of other metals like nickel or copper. However, some government-run mints produce silver coins that have an actual legal tender. Silver has been valuable since it was first discovered.

The earliest method of extracting the silver metal was first developed in the 16th Century in Mexico when the first Spanish conquistadores found silver there. This method involved mixing silver with salt and other minerals and then churning the mixture. The next process involved heating the mixture to separate silver chloride from the ore. Silver mining came to North America in the 18th Century. When it did, several methods of mining and extracting silver were developed. The different methods were applied to deal with the metals that silver was found within. Some methods involved heating, smelting, acid treatment, use of electricity, and floatation separation. The silver that has been extracted is then cast and sold to manufactures and mints.

These processes have been refined over the years and silver has retained its status in the world as a valuable investment metal. People buy silver bullion as much as they buy gold to hedge against inflation and other economic catastrophes. They can sell bullion when they need to liquidate their investment and get the cash they need.

Silver Coins Vs. Silver Bars

Silver Bullion Coins are typically produced by government mints like The Perth Mint, The U.S Mint, The Royal Canadian Mint, and so forth. These are issued with face values that stand for legal tender. Silver coins have higher premiums so they cost more than silver bullion bars. You would think that since silver bullion bars weigh more than coins they would yield better returns when you sell but they don’t. You will get more for coins than you would get for bars when you decide to sell bullion.

Here are three main reasons coins are better to have than bars:

  • Coins are collectable because of the unique design, physical condition and craftmanship.
  • They are easy to resell. Anyone can cash in on coins from a gold dealer to a pawn shop.
  • There is always a demand for coins that outperform the supply. This has to do with the fact that coins are unique. They are coveted for a lot of reasons which keeps their prices over spot-price higher than gold bars.

There are basically two kinds of silver coins that are traded: numismatic coins and bullion coins. Numismatic coins are mostly collectible whose value might depend on their age, their rarity, and collectability. Bullion coins are valued differently. They are made from .999 fine silver and the price depends on the current spot-price of silver. This spot-price fluctuates every day and is often tied to the price movement of gold since both metals are affected by the same factors. When you decide the silver you have you have to check this spot-price and follow the fluctuations daily.