Junk Silver Or Bullion?

I don't know if the 2008 gold buffalo set is really representative. It is so far the only year where fractional gold buffalo were minted which adds an extra layer of demand not shared by many other bullion coins. I will say the premiums as a percentage over the melt value for that set have gone up. The unc and proof versions had a premium of about 30% and 63% respectively in 2/2009 to 59% and 98% in 11/2011 to 85% and 112% in 7/2016. The premiums may or may not continue to rise and if you are buying only for financial reasons, you are making the bet on both the premiums and melt value.

The American eagle gold proof set mentioned in my previous post had a bid of $2405 in 2/2009 which was a premium of about $714 or 42.2%. Over the time period 2/2009 to 7/2016, the AGE proof set would have under performed a standard AGE. A similar story plays out with the premiums of the proof silver eagles. The difference being that over the same time period they did end up outperforming the standard silver eagles. The typical pattern is premiums tend to decline when bullion prices run up and expand when prices fall. You see it in the examples mentioned, junk silver, and common date pre 1933 gold. Like in most of numismatics, there are exceptions like 2008 gold buffalo set. If your goal is to earn the highest returns and believe bullion is in an uptrend, low premium bullion will in most cases do the best.

Now people buy for all sort of reasons other than just monetary. If you enjoy owning proof, certified, or any other premium bullion product and feel the prices are worth it, then absolutely buy it. For some, it is more important to have fun than to make a lot of money.

I prefer 999 silver and stick with ASEs and smaller bars for the most part. I use to have a lot of 90% and have sold/traded most of it. Nothing wrong with 90% U.S. junk though, to each his own.