Silver coins for investing: numismatics collapse vs bullion reign

Which silver coins should you buy today without breaking the bank?

If you Google what the best silver coin for investing is, the answer you'll find in specialist circles is not what you expected. There is no magic coin. What there is, is a market split in two for years now: pure bullion, bought and sold close to the international metal price, and numismatic collecting, dragged down by a liquidity crisis many consider terminal. The debate, which has been running for more than a decade on investing forums, leaves a handful of uncomfortable conclusions and a few calculations worth having at hand before you pay up.

Bullion vs numismatics: a gap that keeps growing

The first distinction any veteran makes is brutal in its simplicity: bullion is investing, numismatics is something else. Commemorative one- and two-euro coins, euro coin cards, European mint sets… all of that had its bubble and it burst. Those who bought limited editions hoping for a return discovered they couldn't even recover half of what they paid. Euro collecting hit rock bottom, and the mints' annual mintages have done nothing but shrink since then.

On the opposite side, bullion has established itself as the natural vehicle for anyone who wants silver without complications. The most frequently cited pieces are the usual ones: the American Silver Eagle, the Canadian Maple Leaf, the Mexican Libertad, the Australian Kangaroo and Kookaburra, and the Austrian Philharmonic. They all share one virtue: they are bought close to the spot price and are easy to resell because they are recognized internationally. The spread between buying and selling prices is what really makes the difference between one coin and another.

Milk spots: the investor's silent enemy

There is a technical detail that separates some coins from others and rarely appears in sales brochures: milk spots. Those whitish marks blemish the surface and, when the time comes to sell to a private buyer above market price, they crush the perceived value. American Eagles and Mexican Libertads usually escape this problem, while Canadian Maple Leafs carried a troubled fruta for years for this reason, though the Canadian mint is said to have fixed the process.

The accumulated experience of those who have inspected their own collections points in the same direction: Australian Perth Mint coins from 2012 to 2017 remain free of visible spots. It's not a universal guarantee, but it is a clue that matters when choosing between two pieces with similar premiums.

How much does the market pay for an ounce of silver today?

Here comes the figure that catches more than one person off guard. For silver coins with a fineness below 0.900 —duros, pakillos and the like—, the range an informed buyer would be willing to pay sits between €0.51 and €0.56 per gram, which works out at €15.86 to €17.41 per ounce. For karlillos, those €12 coins with 925 fineness, the reference is the face value, though at the peak of the karlillo craze buyers paid €15 and €16 per coin.

The contrast with 2011 is devastating. Anyone who bought a Maple Leaf that year paid around €25; a Panda cost about €29. Today, the difference in performance between the two pieces perfectly illustrates the distance between bullion and premium bullion. Silver has not recovered those levels and nobody knows when it will.

Spanish numismatics: a dying market that still breathes

The diagnosis of Spain's collecting scene is harsh. Nobody wants Juan Carlos I coins, Franco coins sell by weight except the rarest ones, and the Centenario retains a residual market with demand almost exclusively from Spain. The price catalogs used by some collectors —the Guerra brothers, Aledón— are of little use when the real market has been correcting downward systematically.

Still, some qualify that pessimism. The international numismatic market, they argue, cannot be measured only by what happens at Spanish flea markets. Auctions of quality pieces keep working and the number of collectors worldwide has kept growing. The key, in any case, is the same as in any business: know the market, have contacts and know what sells and why. Without that, numismatics is an expensive hobby, not an investment.

The advice nobody wants to hear: diversify and don't fall in love

The most repeated recommendation among those who have been at this for years is also the least exciting. For anyone who wants silver as a store of value, the way to go is to accumulate internationally recognized bullion, avoid exotic series with minimal mintages and not pay disproportionate premiums. Ten-ounce pieces, kilo bars, Aztec calendars and other objects of desire have their audience, but it is a smaller and less liquid one.

There are even those who have decided to sell off all their bullion silver to reorganize their position. And there are others who, on the contrary, still see silver as an asset with long-term potential, arguing that industrial demand is growing while production stagnates. That debate remains open.

In the end, the question "what is the best silver coin for investing?" has an answer that satisfies no one: none. It depends on the price you buy at, the moment you sell, and whether someone on the other side wants what you have. The rest is folklore and catalogs.