Silver and Gold American Eagles are popular bullion coins to invest in. These American-made coins are globally recognized and backed by the U.S. government, making them great bullion to purchase. So, how do investors choose one over the other?
Metal Content
Authorized by the Gold Bullion Coin Act of 1985 and first issued in 1986, American Gold Eagles are widely recognized bullion coins valued for their liquidity and U.S. government guarantee. Gold Eagles are produced by the United States Mint and are recognized globally for their purity and design. These coins come in various weights and have a fineness of .9167 and are IRA eligible.
The American Silver Eagle has been the official silver bullion coin of the United States since its introduction in 1986. Silver Eagles are also produced by the U.S. Mint and have global recognition. Like the American Gold Eagles, they are produced by the U.S. Mint, are globally recognized, and are IRA eligible; however, the standard Silver Eagle bullion coin is issued only in 1 troy ounce of .999 fine silver.
Design
The Gold Eagle’s obverse features Augustus Saint-Gaudens’ $20 Liberty Double Eagle design, showing Liberty advancing with sun rays behind her and the Capitol dome in the distance. She carries a torch in one hand, representing enlightenment, and an olive branch in the other, symbolizing peace. The reverse, introduced in 2021, presents a detailed profile of a bald eagle by artist Jennie Norris, emphasizing the national bird’s strength and grace. This design replaced Miley Busiek’s original family-of-eagles motif, used from 1986 to 2020.
The obverse of the Silver Eagle features Weinman’s Lady Liberty, first struck on the Walking Liberty Half Dollar (1916 – 1947) and revived in 1986 for the Silver Eagle program. The reverse depicts Emily Damstra’s bald eagle descending with an oak branch, symbolizing resilience and national pride.
Face Value & Melt Value
When choosing between gold and silver Eagle coins, investors should focus on intrinsic value rather than face value. Gold and Silver Eagle coins are valued primarily for their precious metal content but also carry a nominal face value. Because they are produced by the U.S. Mint, they are legal tender in the United States.
A face value distinguishes a sovereign bullion coin from a privately minted round, which lacks legal tender status. While Eagles could technically circulate with their stated face value, their intrinsic value is much higher, so they are rarely used in regular commerce.
Melt value is the intrinsic value of a precious metal, calculated from its weight, purity, and the current spot price. This concept helps investors and collectors in bullion, coins, and jewelry determine an item’s base value, apart from any numismatic or collectible premium. Gold and Silver Eagles have a high melt value, and the metal value outweighs the collectible value, even though these bullion coins are popular to collect.
When considering selling gold and silver items for their melt value, focus on pieces where the intrinsic metal value outweighs any potential numismatic or collectible value. Instead of selling Eagle coins for melt value, it’s recommended to sell damaged bullion coins and bars, silver or gold scrap jewelry, low-numismatic-value coins, and other high-purity items.
Premiums
Premiums refer to the additional amount buyers pay above the intrinsic metal value (spot price) and are determined by rarity, condition, supply, and demand, among other factors. Premiums are constantly changing. Different retailers have different premiums for Gold and Silver Eagles because of varying pricing strategies, overhead costs, and market positioning.
Fractional Gold Eagles generally carry higher premiums per ounce than the 1 oz version of the coin. The main driver of this higher premium is higher production costs for smaller blanks, with lower mintages playing a secondary role. A typical 1 oz Gold Eagle sells at a 5%–7% premium, with the premium rising as size decreases: 1/2 oz, then 1/4 oz, then 1/10 oz. Many buyers accept the added cost because fractional coins are more affordable and have a lower dollar barrier to entry.
The premiums for American Silver Eagles historically experienced significant fluctuations, especially during and after the COVID-19 pandemic. Traditionally, these coins carried a slight premium over other silver coins, but the pandemic caused a dramatic spike in these premiums, with Silver Eagle premiums at one point reaching $20 over spot, nearly double that of other silver sovereign coins. This surge was partly due to the U.S. Mint’s unique requirements for procuring silver blanks. These requirements increased demand and limited supply, resulting in high premiums. Also, proof or burnished versions of the American Silver Eagle carry higher premiums than the bullion coins because of the numismatic value placed on the proof/burnished coins beyond their precious metal value.
Investing in Gold vs Silver
Gold’s global supply is limited, and it has often helped preserve purchasing power, particularly during times of long-term elevated inflation. However, its price can fluctuate in the short term due to market conditions. Unlike many assets, gold often moves independently of traditional financial markets, providing stability during stock-market turbulence or currency devaluation.
Silver is a precious metal with a finite supply. Its limited availability and broad industrial uses, from healthcare to automotive and energy, help keep demand steady. Physical silver carries no counterparty risk, meaning owners are not reliant on a third party to honor a contract. When banks or other institutions fail, investors can face significant losses, but holding physical silver provides an asset outside the financial system.
When considering buying gold or silver, it’s important to understand the gold-to-silver ratio. The gold-to-silver ratio shows how many ounces of silver are needed to buy one ounce of gold. Historically, a high ratio signals that silver is priced lower relative to gold, which may appeal to value-minded silver buyers, while a low ratio can make gold more attractive.
Why It’s Best to Choose Both
Both of these bullion coins have a high purity and are recognized all over the globe, making them a very popular investment tool. Investing in Gold and Silver Eagles is best if investors want to diversify their portfolio with tangible assets of enduring value and if they do not mind paying higher premiums for investment-grade precious metal products. Of course, investment goals and budgets differ for everyone, so it’s best to make your decision based on your risk appetite and financial ability.
This article is not to be used as financial advice, but as educational content. Anyone considering investing in Silver Eagles or Gold Eagles should seek advice from a financial advisor. Consult with a tax professional to understand the specific tax implications applicable to American Gold Eagles and American Silver Eagles.
