Silver eagle prices are consistently higher per ounce than generic rounds. Investors that are new to buying silver and other precious metals are often confused by the prices of what seem to be the same or similar items. At the end of the day both are still 1 troy ounce of silver.
Some of this confusion is due to the lack of transparency from dealers who rely on customers paying high premiums over spot price to pad their profit margins.
After all, isn’t 1 troy ounce of silver bullion the same no matter who makes it? Whether it is a generic bullion round from a private mint like the Sunshine Mint, or a 1 oz American Silver Eagle coin.
So why are silver eagle prices higher?
The US Mint is responsible for the minting and manufacturing of American Silver Eagle coins. There is a cost to to manufacture and distribute Silver Eagles.
To recover the manufacturing and distribution costs the US Mint charges wholesale distributors, referred to as “Authorized Purchasers”, a $2.00 premium on every newly minted Silver Eagle. The added premium by the Mint is passed along by the dealers to the end buyer or investor as part of the cost.
Dealer prices for Silver Eagles
Online bullion dealer prices for current year Silver Eagle coins are most often priced relative to the “Ask” spot price, plus the premium cost that the dealer has incurred from the wholesaler and the US Mint.
The price per American Silver Eagle coin will typically range from $2.50 to $3.50 over spot price per one ounce coin. With current spot price floating around $15.40 per troy ounce, this premium range is 16%-22% over spot per ounce.
You can save money on dealer premiums if you buy Random Year American Silver Eagle coins. Random Year Silver Eagles are often secondary market coins that dealers have bought back in tubes from investors in BU condition. Since dealers will buy back Silver Eagles at a lower premium than is charged by the US Mint, the lower premium is passed along to investors.
How much over spot should i pay for silver eagles?
American Silver Eagle coins always carry a premium over spot price.
Current year Silver Eagles will typically carry the highest premium from online dealers and local coin shops. This is because of the premium that the US Mint charges to Authorized Purchasers (Wholesale Distributors). The premium charged by the US Mint ultimately gets passed along to the investors and silver stackers.
American Silver Eagle coins from recent previous years will typically have a slightly lower premium than current year coins depending on dealer inventory.
Older American Silver Eagle coins that are in uncirculated condition often carry a premium as they are often considered semi-numismatic because they are dated. However, aside from specific years where the mintage of Silver Eagle coins was limited such as 1996, back-dated coins have little to no numismatic value. They are simply date silver bullion coins.
Silver Eagles that are in circulated, tarnished or cull condition will have the lowest premiums. These coins may show some signs of wear and tear from handling such as scratches, dings or surface marks. They may also show signs of tarnish from being exposed to air, have smudges or may have been painted with enamel or acrylic paint. Even Cull Condition or tarnished Silver Eagles will maintain their value relative to spot price, often carry a premium above spot price on the secondary market.