If you’ve thought about investing in 1 oz silver, then you’ve probably thought about buying a stockpile of American Silver Eagle coins. But before you make room in your vault, take a few moments to read this.
Yes, the American Silver Eagle coins are popular. Perhaps one of the reasons for their popularity is because they’re considered the official silver bullion coin of the United States. But another reason might be because of their perceived scarcity a few years ago. (Notice I used the word “perceived” – more on that in a moment.)
If you were paying attention to these 1 oz silver coins during the economic downturn of 2008, then you’re probably aware of the high demand and the “rationing” that followed. Investors started snapping up the American Silver Eagle coins as a hedge against inflation and the bad economy. This high demand caused the U.S. mint to “ration” and allocate their remaining coins to authorized dealers.
Some questioned the legality of the US government allocating these coins. But whatever the case, the fact remains that the perceived value of the coins went up just because there was a perceived scarcity.
But guess what? At the time of this writing, there are over 272 million American Silver Eagle coins floating around, and up to 34 million new 1 oz silver American Eagles are minted each year.
To say there’s an abundance of the American Silver Eagle coin might be a bit of understatement. And because of this abundance of coins, the price of the American Silver Eagle coin generally tends to move with the spot price of silver. When the spot price goes up, American Silver Eagle investors crack open their champagne. When the spot price falls, these same investors level dirty looks at their precious-metals dealers (as if the dealers are to blame).
My point here is that if you have a get-rich-quick mindset, or if you’re a short-term investor, then the American Silver Eagle coin isn’t for you. The price can rise and fall quickly like a rollercoaster, and it almost always closely follows the spot price. This is the sort of movement that gives short-term silver investors heartburn.
If you just want 1 oz silver, and you’re in it for the long-term, the American Silver Eagle coin isn’t a bad investment. In fact, it’s one of the few silver coins that are accepted into silver IRAs.
However, if you enjoy buying and selling 1 oz silver, then the American Silver Eagle coin may leave you disappointed. Just try selling your American Silver Eagle to your dealer, and you’ll learn about selling silver for under the spot price. No one buys these coins for more than the spot price of silver because there’s such an abundance of them, with more coming out of the mints every day.
However, if you’re looking for 1 oz silver or other bullion that doesn’t so closely follow the spot price of silver, then you might consider Silver Morgans in lieu of the American Silver Eagle coin. It might help you sleep better at night, too.