What Is The Cheapest Silver Coin? Learn How To Calculate The Premiums On Silver Coins And Find Out!
The price of silver has been surging in recent days, due to a variety of geopolitical and economic factors. As the price of silver continues to rise, it is more vital than ever to shop wisely when purchasing silver bullion coins! Premiums on silver coins can make or break your silver coin purchase deals.
Unquestionably, the most popular silver bullion coin is the American silver Eagle. There are many great reasons to buy this particular coin. It is recognized worldwide, can be bought and sold very easily, and is guaranteed by the U.S. government for its purity and silver content.
However…is it the cheapest silver coin to buy at this moment? Is its premium the lowest compared to other similar silver bullion coins?
Keep reading and you’ll find out…
During a precious metals bull market, to make the most money possible, you want to own as many units as you possibly can at the peak.
For this to happen, any time you buy bullion, you want to get the most silver for your money.
To achieve this goal, you always want to purchase the silver coins that have the lowest premium (i.e. that are the cheapest).
With the diverse selection of silver bullion coins that are available, how do you figure out which one is the least expensive?
Here is how you would calculate the premium on silver bullion coins:
1. Firstly, you will need to find out what the current bid spot price of silver is. Kitco is a great online source that I personally like to use. Additionally, most online silver bullion dealers list the current spot price prominently on their website.
2. Secondly, you will need to determine the amount each of the silver coins is selling for above the spot price of silver. Again, most reputable silver dealers will have this information posted on the page of each specific coin. For instance, a random date 1 oz American Silver Eagle coin is currently selling for $4.99 over spot at my favorite online silver dealer.
3. Thirdly, you will need to determine the % over spot that each coin is selling for, utilizing this formula:
$ Amount Coin Is Selling For Over Spot / (Current Silver Spot Price + $ Amount Coin Is Selling For Over Spot)
For example, let’s use the 1 oz American Silver Eagle Coin. Please note: the prices used were current at the time this article was written.
$4.99 / ($40.67+ $4.99) = 10.9% premium over spot!
The above example is calculated for a one coin purchase. In most cases, the premiums will go down the more coins that you buy and they will vary according to each individual dealer.
Here’s the catch…
It can be kind of a pain to calculate this formula on a day-to-day basis. One solution would be to set up a spreadsheet using the above formula for each coin that you want to track. Once you’ve set this up, you would just need to adjust the spot price of silver and coin pricing information.
It’s still kind of tedious but still better than figuring the premiums on a calculator each time you want to buy.
However, there’s an even easier way to calculate, track, and keep up with the latest silver coin premiums…