Precious metals like silver and gold really took a beating in 2013. When I mention “precious metals” some people might conclude that I’m referring to trading such items in the metals markets, buying in selling in non-physical form. However, I would never buy precious metals that I couldn’t actually see or hold. Not only is there the chance of being sold nothing more than electronic digits on a computer, but I see other downsides to buying paper precious metals as opposed to the physical stuff.
Why I don’t like paper
If non-physical precious metal prices go down, that paper metal is worth what it’s worth. But if the price of precious metals declines, the value of an actual, physical piece of metal – coin, bar or otherwise – might whether the storm a little bit better.
Unlike owning precious metals through stocks, ETFs, and the likes, with physical coins or bars, you may still have an item that is tradable in physical locations like coin or pawn shops, and there may be a numismatic (collector) value associated with the item.
But where can you buy physical precious metals like silver and gold? Well, it might be easier than you think. Beyond stores like coin and pawn shops, you might also find such items at antique stores and even estate sales. And if you don’t feel like leaving your home, online sites like eBay could help you find what you’re looking for.
However, unlike buying paper metals, buying physical can take a bit more knowledge. Boning up on things like weights and measurements (knowing that a troy ounce is more than a standard ounce), building a relationship with an area coin dealer, reading online reviews of various metals dealers or sellers, and obtaining information about values of various coins or current metal values can all help you become a more informed buyer.
Benefits to physical metals
By owning physical metals, you may be protected in ways that owning paper metals would not provide. Values for old coins – things like Barber quarters and dimes, Mercury head dimes, pre-1965 coins in general (in which silver content was 90 percent), gold and silver eagles, etc. – may have a heightened value over and above their actual metal value. This numismatic or “collector” value may even be significantly more than their metal worth. It’s also nice knowing that even if the price of silver or gold plunges dramatically, your physical coins might still actually hold a premium over and above the exchanged traded metal prices.
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The author is not a licensed financial, commodities or precious metals professional. This article is for informational purposes only and does not constitute advice of any kind. Any action taken by the reader due to the information provided in this article is solely at the reader’s discretion.