How Much Is Gold & Silver Worth?

When determining the value of your gold or silver bullion or coins, there are two components that can contribute to the overall value of your precious metal pieces: the “spot price” and the collector premium. The spot price of a coin or bullion piece is determined by its market value at that particular moment. In addition to market value, there are certain collectible bullion pieces, particularly coins, whose base value is primarily derived from their rarity or their historical significance.

The collector premium, also referred to as the “premium over spot,” is an additional fee that dealers charge to cover any expenses incurred by the purchase of a particular piece of bullion. Premium rates will vary according to both the item’s composition, form and in some cases, its quantity. These factors will be discussed in further detail below.

Bars and Rounds

Bars and rounds are considered the most affordable investment vehicles because their base value is solely derived from the present market value of their composition metal. Most gold and silver bars and rounds possess generic designs and are readily available, so there is little in terms of collectability to augment their overall value. The only exceptions to this case are certain early decorative bars, which are considered highly valuable among collectors and therefore, warrant their higher base values.

Bars and rounds carry the lowest premium rates per ounce for both gold and silver with only a minimal difference between their rates and their base value. These forms of bullion are ideal for customers who wish to purchase their precious metals as close to spot price as possible. While silver carries a lower premium rate than gold, it is important to note that the collector’s premium on both gold bars and rounds will decrease as the purchase quantity increases.

Coins

When compared to bars and rounds, coins tend to carry higher base values due to their collectability. Unlike other forms of bullion which can be privately minted without restriction, coin mintage has to be regulated by their country’s national treasury due to their status as legal tender pieces of currency. Such limited quantities create a higher demand for these coins that ultimately raises their base values beyond just their precious metal composition.

In addition to their higher base values, coins also carry higher premium rates than bars or rounds because they are more difficult to obtain. Most coins that are considered collector’s items are no longer in production, so the process of tracking down and verifying the authenticity of such pieces can be more costly than those associated with other less rare pieces of bullion. Unfortunately, such expenses are often reflected in the higher premium rates that customers encounter on their coin purchases.

Proof Coins

In general, the base value of a proof coin will always be higher than its uncirculated, non-proof counterparts because of their scarcer quantities. On average, the mintage quantity of a proof coin is 5-20% of the quantity produced for the coin’s standard and uncirculated versions. Proof coins also tend to carry higher premium rates. When comparing the mark-up rates of different precious metals, the premium for gold proof coins is typically lower than silver’s. Gold proof coin rates are minimal in relation to their overall cost, while premiums for silver proof coins demonstrate a significant disparity from their base value.

Pre-1933 Gold Coins

Pre-1933 gold coins are perhaps the most expensive coins that investors will encounter on the market. Gold coins produced prior to 1933 have a higher base value than other forms of circulated currency due to their composition of .900 fine gold. Their base value is further augmented by their collectability as a discontinued US coin. Because pre-1933 gold coins are so rare, premium rates for these coins will also be significantly higher than other coins in order to cover the acquisition expenses. Still, despite the the substantial premium over spot, such coins are ideal for customers who wish to make a substantial investment in gold.

Junk Silver

The term “junk” coins refers to any silver piece of currency that is still in acceptable condition. While not entirely pure, junk coins can carry a silver composition ranging between 35% and 90%. They are are among the few coins whose base value is actually derived from their metal content as opposed to their collectability. Junk coins are considered one of the most affordable investment options due to their low premium rates. In fact, because junk coins are usually sold in bulk, they enable customers to purchase silver at or under spot price in some cases. Junk coins are best suited for customers who have slightly lower investment budget, but would still like to yield substantial profits.

At JM Bullion, we pride ourselves on providing customers high quality merchandise at competitive prices. All of our precious metal bullion pieces are priced to reflect their most recent market values, while their premium over spots are among the most affordable in the industry. For any further questions regarding the pricing of our merchandise, please call us at 800-276-6508. Our supportive staff is also happy to speak to you via live chat or through online forms.

All Market Updates are provided as a third party analysis and do not necessarily reflect the explicit views of JM Bullion Inc. and should not be construed as financial advice.