Silver Bullion Bars
One of the most persistent images associated with precious metals – other than coins such as the historic doubloons or modern American Eagles and South African Krugerrands – are poured ingots or bars. The ingot form has many advantages for storing precious metals (and, indeed, any kind of metals) in bulk. With their neat, rectangular shapes and flat planes, bars and ingots can be stacked neatly – unlike coins, which are somewhat inconvenient in large quantities even when contained in mint tubes and similar storage devices. Silver bars are also a more convenient method of buying bullion in larger weights.
Minted by the Royal Canadian Mint in Canada, these silver bars are the purest minted anywhere on the planet, coming in at an incredible 99.99% fineness. Available in various weights and sizes, the most popular bars are the massive 100 ounce bars which come at the lowest possible premium over spot.
Produced by one of the world's most infamous financial institutions - Credit Suisse - these bars are increasingly hard to obtain due to the fact that the company focuses more on minting other precious metal ingots, namely gold, platinum and palladium. Buyers can still find 1oz and 1kilo bars on the secondary market.
The silver bullion bars produced by Johnson Matthey are very popular amongst collectors due to their rarity on the secondary buyers market and the fact they are no longer minted. They come in a few different weights and sizes, and when available to purchase, they usually sell for a premium over spot price, a reflection of their desirability to those interested in silver bullion.
Based out of Coeur d'Alene in Idaho, a famous mining town in the USA, the Sunshine Minting company is the number one supplier of silver blanks to minting firms in America. As well as providing silver blanks, they also privately mint their own silver bullion in the form of silver rounds and of course silver bars.
Silvertowne silver bars are a popular form of investment bullion minted by "Silvertowne" - a private minting firm based in Indiana in the United States of America. As their bars are privately minted, they contain various forms of interesting imagery including religious symbolism, native American history and numerous pop culture references.
One of the most popular products minted by the world's largest private seller of investment bullion, the silver bars produced by the American Precious Metals Exchange (APMEX) are some of the highest quality and visually appealing bullion available on the market. Sold in various sizes for investors with different budgets, these pieces are an excellent store of value.
Investing In Silver Bars
Silver bars are more of a commodity than an investment – in short, they are designed mainly to serve as a store of value and a basic commodity investment, rather than serving as a collectible as many of the rarer or more decorative coins do.
Their price per ounce is close to the current spot price for silver on the world market, with a few dollars of premium above spot being typical. They are, in short, a form of bullion, and in this day and age are more frequently issued by banks and private companies than governments, though these ingots and bars had a long history as creations of various royal states as well.
There are a few rare, collectible silver bars, it should be noted. These bars are those made with highly identifiable images and something else that makes them special. For example, all Johnson Matthey silver bars sell for around twice their spot value at the moment due to their rarity, since the company is not currently producing them. The very rare “koalagram” and “shipwreck” bars cast by this firm can sometimes command an even higher premium, due to their idiosyncratic character.
Silver bars have existed for longer than coinage – probably much longer. The original type of precious metal object used as “currency” were small metal bars, including both silver and gold. Due to their extremely high value and rarity, these were mostly confined to facilitating large-scale transactions, such as large purchases by merchants, the hiring of mercenary armies by kings, payments between major temples, and so on.
Silver bars make a relatively poor substitute for coinage, which is why, once coins were invented, silver bars (and gold bars) became used primarily as a store of wealth and not a direct item of trade. Each silver bar represented a ruler’s capacity to melt it down and use its fabric to produce more coinage. In effect, silver bars were coins “in potential” or “in reserve”, and their value was thus greatest to those legally empowered to mint currency. Others might do so, but they risked hideous execution if they were caught minting coinage, even if its value were essentially the same as legitimate coinage.
Governments have always been perilously jealous of their prerogative to create their nation’s currency.
The last two centuries have made silver bars more useful for ordinary people to hold as a hedge against economic turmoil, skyrocketing prices, and other dangers of the global economy. Now that silver coinage has largely become a form of bullion, and silver bars are simply another form of bullion without needing to be “coins in potential” in order to have intrinsic value, they have become a good hedge against economic problems and a potential investment item as well.
The Many Types of Silver Bars
It is difficult to catalog all of the types of silver bars that have been produced, since there are literally hundreds of different variations from private companies and banks who want to offer their silver in this format. With no central direction, rather chaotic planning even within individual organizations, and varying demand climates, amounts of available silver, and casting techniques, many of the silver bars now in circulation show a bewildering array of forms.
In the case of Johnson Matthey alone, there are at least two dozen identifiable types of silver bars which were produced during the twentieth century. Their quality, design, weight, length of production, and total number of bars produced vary wildly, and in many cases are not even recorded anywhere where the public can gain access to them.
You may find a beautifully made bar weighing only five grams, alongside a twisted, pitted,distorted effort weighing 200 ounces, but which looks as though it had been cast by cavemen rather than modern metallurgical technicians – both produced by Johnson Matthey within a few years of each other. There is no comprehensive catalog of the hundreds – if not thousands – of variations on the silver bar that were fashioned between 1900 and 1999 around the world.
Some of the most interesting silver bars of the 20th century came out of the 1970s, when the Hunt brothers of Texas were involved in a huge scheme to buy up the world’s supply of silver, driving up its price and then liquidating it at colossal profits. Though they were eventually quashed due to the extremely predatory nature of the measures they pursued to reach their goals, they did succeed in temporarily driving up the price of silver to astronomical levels through their effort at making this precious metal their personal fief.
While silver prices went up, the desire of people to own some of the precious metal to keep their wealth safe continued with the same intensity as ever. Using their limited stocks, enterprises like Johnson Matthey produced “fractional silver bars” weighing less than an ounce – in some cases, fingernail-sized flecks of silver that weighed only 1/31 of an ounce (1 gram). Some of these bars still survive today – they are now worth little more than a dollar, but at the time of their production they cost considerably more.
Silver Bars Today
Silver has returned to a more reasonable price – one set by supply and demand, and not purely the speculative efforts of a couple of investors – and silver bars are an excellent investment in the modern precious metals market. They are not collectible in the same way as some coins, meaning that their value is always slightly above the current spot or melt value, but this also means that you will always be able to acquire some without paying a high premium.
Many of the silver bars produced today are far more standardized and methodically produced than those in the past. For example, companies like APMEX, Sunshine Minting, and so on, all tend to produce silver bars that weigh 1 troy ounce, 5 ounces, 10 ounces, 1 kilogram (32 ounces), and 100 ounces. Thus, it is possible to purchase silver bars systematically, even across company or brand boundaries.
The silver bars of the current era are also made with very high production values, including highly detailed emblems, beautifully executed letter, crisp, even shapes, and often a deep mirror finish similar to proofs. Some of these bars are specifically designed to be suitable for funding a precious metals IRA in the United States, as well – adding yet more to the financial flexibility of the latest version of silver bars, whose history stretches back into the unknowable depths of antiquity and continues on a trajectory into the mystery of the future.
About Silver Bars
Silver bars are perhaps the oldest form of man-made silver bullion. Prior to the invention of coinage in the Kingdom of Lydia — likely under the leadership of King Alyattes, whose son, Croesus, was to enter legend as the monarch at whose touch everything turned into gold – ingots of precious metal were the primary medium of exchange for mercantile activity that occurred on too large a scale to be conducted by the age-old method of barter.
Silver bars or ingots were made the primary medium of exchange before coinage because they are easy to stack for storage, can easily be made in a simple rectangular shape to a very standard size, and are technically undemanding, especially since the early silver bars were completely plain most of the time. Today’s silver bars can be quite fancy, with the fine etching, magnificent production values, and deep luster finishes reminiscent of those found on proof coins. The originals were nowhere near as fancy, however, and could be made in a simple rectangular mold.
Why Do People Buy Silver Bars?
The question naturally arises – why do people today buy a silver bar of one ounce weight (for example), when the bar has no numismatic value, and when one troy ounce silver bullion coins are readily available? What are the advantages that ensure the survival of this ancient bullion form from the days of Pharaoh, the Kings of Assyria, and the tales of Biblical times to the modern, high tech day?
One of the benefits of silver bars, as opposed to coins or rounds, is precisely that they have no numismatic value except in rare cases. If you are looking on your bullion as an inflation hedge, rather than planning to resell it to another collector, then a low premium above spot is to your advantage, because you can convert more of your wealth into ounces of actual precious metal rather than into the airy, abstract value of “numismatic premium”.
Silver bars are also far more practical at large sizes than a coin or round of the same weight would be. A 100 ounce silver coin would be impractically large, while its thinness and circular shape would make it take up a lot of space even when stacked. Silver bars are spatially economical for their weight, since they can be stacked close against each other in all directions, and fit together with a minimum of air space. Stacks of silver bars are stable and unlikely to tip over, either.
Because of this, very large weights of silver – 100 ounces, 500 ounces, or even 1,000 ounces – are usually only available in bar or ingot form. If you are planning to buy large amounts of silver as an inflation hedge, then large silver bars are the most efficient way to obtain and store the metal.
Different Methods of Making Silver Bars
Silver bars can either be poured or struck, depending on the technology available to the manufacturer and the effect they are trying to achieve. A poured silver bar can be distinguished from a struck silver bar readily because of the obvious physical differences between them.
Poured silver bars are made by heating silver to the point of melting, then pouring the molten metal into a prepared mold. This mold usually has lettering and sometimes symbols cut into it in the reverse of the way they are to appear on the finished bar – for example, raised letters in the mold will produce recessed letters in the bar it produces, while recessed letter in the mold will give bas or high relief designs on the poured metal.
Poured silver bars are usually a lot rougher and less precise looking than their struck counterparts. There are likely to be irregularities, perhaps an overall lopsidedness depending on whether the mold was put together exactingly or not. There are likely to be soft-edged pits or dimples at the pour site, and the bar is likely to have a generally crude, rough-hewn look. Since pieces could potentially be cut off such a bar without being quite as obvious, you should take care to buy either through reliable sources such as APMEX, or weigh a poured silver bar prior to buying it.
Struck silver bars begin as a rectangular planchet, or blank, which is already cut to precise size and tolerances. The bar is then heated enough to make it pliable, but not molten, and is struck in a die machine or press. Mechanical force is applied to stamp the desired designs into the softened metal, which is then allowed to cool and harden.
Struck silver bars are generally extremely detailed, crisp, and exact, with designs that sometimes rival those of the world’s finest bullion coins. Modern day manufacturers such as APMEX, Sunshine Minting, and their rivals in the silver bullion market often put deep, lustrous finishes on their silver bars. The precision of the bars and their mirrored finish make it almost impossible to trim off any of the silver without being detected immediately.
The Collectible Potential of Silver Bars
The collectible potential of a given issue of single bars is, unfortunately, both extremely likely to be low, and quite unpredictable. Some older silver bars are worth no more than their spot value plus a low premium to cover the seller’s costs. A very few, such as the Johnson Matthey “Koalagram” bars or the same company’s “Shipwreck” bars, made from silver recovered from an actual shipwreck, gain a good premium over spot because of their collectibility. Koalagrams and Shipwrecks, for example, are worth roughly twice the spot value of the silver they contain.
However, there are no sure things in silver investing, and you should not buy a silver bar with an attractive design only because you are “sure it will be valuable in the future”. There is a small chance it will be, and a large chance that it will not. Never pay a high premium over spot for a silver bar just because you are hoping it will become collectible and extraordinarily valuable in the future – because they odds are that it never will.