Buying Silver Direct From The Government
If you are an American silver buyer – and the nation whose emblem is the Stars and Stripes is one of the world’s major centers of silver purchasing due to fears of inflation and economic instability – then it is only natural for you to turn to American silver bullion coins first as the your coinage of choice. However, it may come as something of a surprise to learn that you cannot buy most of the American Silver Eagle coins that you want directly from the U.S. Mint. Instead, you must rely on authorized secondary silver sellers for the majority of your purchases.
This is a rather curious fact, considering how many of the other mints of the world sell directly to interested parties, as well as offering their coins through authorized dealers. For example, the Perth Mint of Australia, producer of many of the world’s premier silver bullion coins, has an online catalog through which coins can be purchased using a credit card or other online forms of payment. However, right now, in most cases in the USA, it is not possible to buy silver directly from the government
There is no clear reason why the U.S. Mint does not sell directly to the public, and all discussions of the topic are so deeply mired in politics and arguments over the nature of free enterprise and the role of government that there is no good information to be had on why this is the case.
The most likely explanation is that the Mint is simply does not have enough personnel to handle tracking and shipping tens of thousands of small orders, and therefore limits sales to those who are able to buy the coins in bulk. Other Mints, less constrained by the drive to keep government jobs to a minimum to satisfy the anti-government sentiments of many of their citizens, can hire more personnel and are therefore able to operate as a retail business rather than a silver bullion coin wholesaler, which is basically the role that the U.S. Mint occupies.
Another possible reason is that direct retail sales are avoided because the U.S. Mint wishes to avoid charges – which would no doubt be clamorously leveled – that it is interfering in the operations of the free market for silver. Those who buy silver and gold are often already highly distrustful of government, and direct sales from the Mint would undoubtedly stir their ire even more. In short, there is no solution which will spare the Mint execration, so they follow the policy they feel satisfies all parties most, in order to avoid being paralyzed by impossibly contrary demands from the public.
Regardless of the exact reason, the U.S. Mint sells only proof coins directly to the public, since these are a scarce commodity whose price is high in any case, and whose sale price does not affect the overall price of silver, since much of it is collectible premium. All other American issued silver coins must be bought from private companies and retailers who serve as middlemen between the Mint and the public.
Finding an Authorized Silver Retailer
Finding an authorized retailer to buy your silver coins from is quite easy, and there are many other excellent retailers slightly further “downstream” from the main sources as well. The American Precious Metals Exchange, also known as APMEX is one of the foremost of the U.S. Mint’s authorized retailers, and offers American Silver Eagles for sale singly, in tubes of 20 (as they arrive from the Mint) and so forth.
The first concern of a silver buyer, of course, is to find the coins that they want with as low a premium above spot as possible. APMEX and several other of the highest quality authorized retailers offer very reasonable premiums above the spot value of the coins. Of course, these companies are trying to make a profit, too, especially in light of the fact that they buy 25,000 Silver Eagles annually at a minimum, but their desire for sales means they try to stay as competitive as possible, too, and spot values are usually kept as low as can logically be done.
If you are looking for a local dealer in your state, the U.S. Mint website itself includes a page which lists the authorized resellers in your area, at www.usmint.gov/bullionretailer. These retailers are not part of the U.S. Mint, obviously, but they are recognized as reliable sources of Silver Eagle coins.
There is also an option to search the whole nation for retailers, which may be especially useful for foreign silver coin buyers or those planning to go on a trip to another part of the country and possibly picking up some precious metals along the way.
Becoming a Buyer Yourself
If you are in possession of a company which already handles silver sales and has been active in the market for some time, then you may be eligible to become one of the retailers who purchase directly from the U.S. Mint and sell to the public. There are fairly stringent guidelines in place about the characteristics which a firm must show in order to qualify, but the network of retailers the Mint sells to is not a closed club. Any company that meets the requirements can become a silver buyer from the U.S. Mint.
Five years experience of selling silver coins either to the general public or to other companies (or both) is considered minimum to qualify in most cases, but three years of coin wholesaling and/or silver futures trading, with ample documentation to back up the claims, is also acceptable in some cases. This is the most stringent part of the requirements, and if your company passes this hurdle, then it probably qualifies in other ways, as well.
Tangible net worth of $10 million is another requirement, as is various auditing and possibly credit checks as well. Your firm must also be willing to buy a minimum of 25,000 coins from the Mint, or 10,000 five ounce America the Beautiful quarters. Needless to say, these factors limit the companies who can buy from the Mint to a very low number anyway, but if your firm meets these benchmarks and is not yet involved in buying Silver Eagles from the Mint, then the possibility is open to you.