With the recent decline in the price of silver, some silver bullion coins have become more affordable. Whether or not current levels will prove to be the new lower threshold for prices remains to be seen, however I did use the occasion to purchase my first one kilo silver coin. The kilo coin is pictured below next to a one-half ounce silver coin.
A few months ago, I had taken a look at the one kilo sized 2012 Year of the Dragon Silver Coins produced by the Perth Mint. Each coin contains 32.151 troy ounces of .999 fine silver and the coins are struck with an unlimited mintage until the close of production at the end of 2012. At the time, the price of the coin was around $1,100, which was reasonable given the price of silver. For various reasons, I decided not to make a purchase that day.
When the market price of silver had fallen to around $27 in mid-May, I found my way back to the bullion dealer’s website and decided to make the purchase. My price was $962.52, which works out to $29.94 per troy ounce of silver. This was actually cheaper than purchasing 32 one ounce American Silver Eagles. It was also much cheaper than purchasing 32 of the one ounce 2012 Year of the Dragon coins, which still sell for about $75 each, due to their mintage limit.
Upon receiving the coin, I was somewhat surprised by the dimensions. I had perhaps expected it to have a wider diameter after becoming familiar with the US Mint’s 5 ounce silver bullion coins, which have a diameter of 3 inches or 76.2 mm. The 1 kilo dragon coin has a diameter of 100.6 mm, or just under 4 inches. The extra metal is instead incorporated into a larger thickness or 14.6 mm, or 0.575 inches.
The Perth Mint also actually produces a 10 kilo sized silver bullion coin, which is more than twice as thick and more twice as wide as the 1 kilo size.
Overall, I was very pleased with my kilo silver coin. Similar to other Perth Mint bullion, it has frosted fields and selectively mirrored design elements for the resemblance of a reverse proof finish. The design, which has now been used on a multitude of numismatic versions, looks impressive at a larger scale. The heft of holding such a physically large coin also adds to the experience.
In the longer term, I have a low purchase point (so far) for an investment in silver based on the intrinsic value of the coin, and I feel that the coin has better potential than generic bullion due to the popularity of the Dragon design.