Compelling investment opportunities are often found in some very unusual places. And right now one of those places is the world of old silver bullion bars. While antique silver bars from many different manufacturers are desirable, many of the most coveted and beautiful are vintage Johnson Matthey (frequently abbreviate "JM") and Engelhard silver bars.
Back in the 1960s, 1970s and 1980s, the Engelhard and Johnson Matthey companies produced the most recognized and accepted silver bullion bars on the planet. These poured, extruded or struck vintage ingots exhibit gorgeous, old world-style craftsmanship. Quality mattered. As a result, they are quite popular with collectors today, often trading for substantial premiums over their bullion value. In fact, it isn't uncommon for rare vintage JM and Engelhard silver bars to sell for hundreds of dollars per troy ounce - a truly shocking valuation in a world of $14 to $20 an ounce silver!
Now this is where things get interesting. You see, the vintage silver bar marketplace is giving savvy investors an extraordinary arbitrage opportunity at the moment. Old silver ingots under 10 ounces in weight - including JM and Engelhard silver bars - currently trade at much heftier premiums than larger bars with sizes of 20 to 100 ounces.
The present rule of thumb is that for any given level of rarity, premiums decrease dramatically as size increases. So for example, an iconic vintage 3 ounce Johnson Matthey maple leaf logo silver bar might trade at 3 to 6 times its bullion value, while an equally rare 100 ounce TD Bank-branded Johnson Matthey silver bar from the 1980s might struggle to sell for 1.4 times spot.
But there is no fundamental reason why this should be the case. I can see the reasoning behind some decrease in premiums for larger vintage silver bars of similar rarity. After all, Engelhard silver bars that weigh only a few troy ounces currently have less than $100 in bullion value, allowing a larger audience of avid collectors to theoretically bid up their numismatic premium.
In contrast, a 100 troy ounce vintage silver ingot requires $1,700 (with spot at $17 an ounce) as the base price of admission. Any collector premium must be added on top of that already prodigious sum. The amounts of money involved with larger silver bars can be intimidating, serving to reduce the potential collector pool.
But there are clear limits to this logic. Right now rare smaller silver bars often trade with numismatic premiums 10 times higher (or more!) compared to scarce vintage 50 and 100 ounce ingots. That can translate into maybe 20% of your total purchase price being intrinsic value in the former case versus over 70% in the latter case. Assuming equal rarity, a greater level of intrinsic value is always better than a lesser level of intrinsic value.
I know a bargain when I see one. And right now large JM and Engelhard vintage silver bars are the bargain of a lifetime.
Look, I'm not the first person to spot this market anomaly. The vintage silver ingot enthusiasts over at the All Engelhard website have published several commentary pieces over the years pointing out this strange situation. Their conclusion is the same as mine; you want to buy larger vintage silver bars with both hands. They are insanely undervalued right now.
Vintage Engelhard Silver Bars for Sale
But the real problem is how to take advantage of this undervaluation. Most of us don't have the $5,000 or more lying around that we would need to really exploit this vintage silver bar arbitrage opportunity to its fullest.
Or do we?
Many of us have 401-ks, IRAs or other retirement accounts invested in conventional stocks, bonds or other paper assets. I happen to have an IRA sitting around right now earning a pittance in long-term U.S. Treasury bonds. And this account has enough money in it to buy some very fine, very rare JM or Engelhard silver bars - larger bars.
Now here's the trick.
U.S. citizens can open what is called a precious metal IRA. Also known as a gold IRA or a silver IRA, this retirement account is meant to allow you to invest in physical gold, silver, platinum or palladium bullion. All silver bullion coins or bars that are purchased in a gold IRA must be at least .999 fine, and, in the case of silver bars, manufactured by a NYMEX or COMEX approved refiner.
When our political overlords enshrined these gold IRAs into law, they intended for people to load them up with straight bullion coins and ingots. In fact, the IRS frowns upon the purchase of what it (disparagingly) terms "collectibles" in retirement accounts. So vintage Engelhard silver bars are definitely not the hard asset that people are expected to put into their precious metal IRAs.
But that doesn't mean you can't do it anyway. After all, the Federal Government made the rules surrounding precious metal IRAs. And they happened to leave in a couple loopholes for the coin collector/antique enthusiast. I say we exploit these technicalities that the Feds have graciously given us.
As mentioned above, in order for a bar to be eligible for a self-directed, silver IRA account, it must be .999 fine and produced by a NYMEX or COMEX approved refiner. Happily, a number of vintage poured, struck and extruded silver bars from the 1960s, 1970s and 1980s meet these requirements.
Here is a list of the most commonly encountered IRA eligible vintage silver ingots (which includes JM and Engelhard silver bars, of course). I've pulled this data directly from the CME Group, which is the parent company of both the NYMEX and COMEX commodity exchanges:
Engelhard - Along with Johnson Matthey, Engelhard is the premier name in vintage silver bullion bars. It produced a range of poured, extruded and struck silver bars from the 1960s until it ceased production around 1987.
Engelhard silver bars are much rarer than the market currently recognizes. It is estimated that Engelhard's total ingot mintage across the company's complete 28-year production run is equal to (or less than) 1 to 2 month's average production of the U.S. Mint's American Silver Eagle bullion coin. As a result, the rarest Engelhard silver bars can trade at very high premiums over spot. However, more affordable Engelhard ingots are available too.
Johnson Matthey - This diversified British chemical company was one of the world's largest and most well respected makers of bullion bars from the 1960s until the mid 2010s. Johnson Matthey sold its precious metals division to the Japanese corporation Asahi Holdings in 2015.
As a general rule, its larger bars are poured while its smaller bars are struck. Please note that poured 1 kilo JM silver bars stamped with "SLC" (which stands for Salt Lake City) are not rare or old, having been produced rather recently in large quantities.
Vintage Johnson Matthey Silver Bars for Sale
SilverTowne - A favorite of poured silver buffs everywhere, the Winchester, Indiana-based precious metal dealer SilverTowne has been making ingots since 1973. These vintage silver bars are found in 5, 10, 50 and 100 troy ounce sizes - all in horizontal formats and most with serial numbers. SilverTowne is still producing poured and struck silver bars today, but these newer bars aren't serialized.
Sunshine Minting - Sunshine Minting is a respected silver refiner located in the famous Coeur d'Alene mining district in Idaho. It produced struck silver bars in 10, 50 and 100 ounce sizes starting in the early 1980s, some of which are dated. Undated older bars can be difficult to tell apart from newer bars, so I would exercise caution here. In addition to providing the planchets that the U.S. Mint uses to strike its American Silver Eagle coins, Sunshine Minting is still striking silver bars today.
The Perth Mint - This is a well-respected Australian refiner known worldwide for its Gold Kangaroo and Silver Kookaburra coins, among others. Owned by the Government of Western Australia, The Perth Mint has a long history, having been established in 1899.
The Perth Mint produced many beautiful poured silver bars back in the late 1970s to early 1980s that are highly prized by collectors today. Its logo is a stylized swan in a circle. The swan on vintage pieces always faces left, versus facing right on newer silver ingots issued by the company.
Royal Canadian Mint - Canada's official mint produces the popular Canadian gold, silver, platinum and palladium Maple Leaf bullion coins. Although little known, the Royal Canadian Mint (abbreviated as RCM) also made silver bars in 1, 10 and 100 troy ounce sizes back in the 1970s and 1980s. You can distinguish these older silver bars by their horizontal format, versus the vertical format of the newer bars.
PAMP SA - This acclaimed Swiss refiner is famous for its "Lady Fortuna" bullion bars struck in silver, gold, platinum, palladium and rhodium. Many vintage PAMP bars are treasured by collectors and consequently trade for dizzyingly high premiums over melt value. PAMP SA is still producing precious metal bars today, so not all PAMP bars are old.
Degussa - A German refiner celebrated for its poured silver bars, Degussa was purchased by the Belgian multi-national corporation Umicore in 2003. Its logo is a half sun and crescent moon inside a diamond. I don't believe that any Degussa-branded bars were produced after 2003, but this claim is subject to further verification.
Bunker Hill - A defunct subsidiary of the U.S. multi-national Gulf Corporation, the Bunker Hill refinery operated in Kellogg, Idaho - an important lead, zinc and silver mining region. Bunker Hill produced mostly odd weight ingots with a lot of variation in size and shape. The company ceased production around 1981. As a result, Bunker Hill vintage silver bars are rather difficult to find and expensive today.
Handy & Harman - Handy & Harman was a diversified U.S. industrial corporation that spent much of the 20th century deeply involved in the precious metals market. They made a variety of larger poured and extruded vintage silver bars, typically with a conjoined, double-H as their hallmark. The company ceased production of silver ingots some time ago, most likely in the 1980s. Consequently, their bars are rarely encountered by collectors today.
U.S. Assay Office - This official government agency was tasked with the assaying and refining of precious metals. The San Francisco, Philadelphia and New York City U.S. Assay Offices minted odd-weight silver bars from the 1930s through the 1960s. Each one bears the seal of the United States, along with its year and city of manufacture.
These vintage silver bars are extremely rare and in incredibly high demand from collectors. When one does arrive on the market, it usually sells for several thousand dollars, even if it's only a 5 or 10 ounce bar. Don't mistake these ultra-rare ingots for the much more common early 1980s privately-minted bars that state "contains silver formerly stored at U.S. Assay Office".
As a parting note, if you decide to pursue a strategy of stacking older silver bars in your precious metal IRA, it is imperative that you opt for segregated storage at your custodian. This is more expensive than the more common non-segregated or commingled storage, but it will ensure that the vintage JM or Engelhard silver bars you add to your account today are the exact same ingots you pull out again at a later date.
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