When TEOTWAWKI hits, gold and silver will be nothing more than useless shiny metals--why would I want those instead of more beans, bullets and bandaids?
Precious metals (PMs) are a hedge against currencies collapsing, which has happened far more often than all-out-end-of-the-world, blasted back to the stone age scenarios. So if the US dollar collapses and you have, say, $10,000, that $10,000 would suddenly become worthless. But, if you'd taken that $10,000 and bought gold and silver with it, your investment would be preserved and you could eventually convert it over to another currency when that came along, and then use that to buy whatever you needed.
The principle behind it is that fiat currencies have a strong tendency to eventually go belly up, while the relative value of gold and silver stay relatively stable on a barter basis. A chest full of gold and silver was worth a fortune 3,000 years ago and it's worth a fortune today. Good luck finding a fiat currency that can say that.
Of course, the barter value of gold and silver depends on having a functioning economy/society. If you're alone on an island or in a Mad Max/Walking Dead, every man for himself apocalypse, then indeed, they're not going to do you much good.
But, history has shown that, typically, currency/economic collapses are far more common and likely threats than zombies or alien invasions.
But, I'd add, that there are numerous areas to focus on before worrying about PMs--food, defense, reliable vehicle, emergency cash, etc.
What is the difference between junk silver (or gold) and coins like American Eagles and Canadian Maples?
Junk silver and gold are typically old coins--the most common being old US currency, which had varying degrees of silver in it prior to 1965. But, the term can also refer to old jewelry, silverware, and so on.
The upside to junk PMs is that you can often get them for close-to-spot prices, whereas coins like American Eagles carry a premium over spot prices.
The downside being that they can be harder to sell/trade when that time comes. You have to "know" a bit about PMs to know that, say, an old Morgan dollar is 90% silver and has just over 24 grams of silver in it. They don't say their weight and metals content on the coin.
On the other hand, coins like American Eagles, Canadian Maples and Krugerrand are more well known and have their weight and metals content printed right on the coin. You pay a premium for these coins up front--for example, a silver eagle will usually cost $5-$8 or so bucks above spot, but you will usually recoup that same premium when selling off a coin anyways.
Personally, I prefer the minted coins like Eagles and Maples, but both kinds of PMs have their place.
Gold or Silver?
I don't think silver or gold make a massive amount of difference. Silver seems to be a bit more volatile than gold, and it's also much less compact, but it also can be purchased in much smaller quantities. I tend to like gold because you can fit a massive amount of wealth in a small, easy to carry package, which is just cool.
What role do you think PMs play in survivalism?
I think a holding of PMs has a place in your financial preparations, similar to a supply of emergency cash. Exactly how much that might be will be up to your individual circumstances, lifestyle, etc. I'd pick a time period worth of expenses or enough $$$ worth to do a specific thing, and then work towards that. So, a month or 3 months worth of expenses, or enough $$$ worth of gold to relocate you halfway across the globe. The idea being that, even if the economy collapses, you'd still have the PMs and their intrinsic value in-hand in order to pay those expenses or buy that thing.
Beyond that rainy-day/economic collapse fund and you're getting into investing territory. PMs are going to be more desirable when you think the market is going to go bust or inflation is going to run wild, and less so when the market does well. I think they certainly have a place in everyone's savings/investment portfolio, but how much will depend on your circumstances, outlook and financial goals.
What's your outlook on the PM market?
Personally, I've felt PM prices have been too high for the past several years. The 12-year upward trend has been well known and a lot of people have bought into PMs...heck, watch any of the cable news channels and you'll see a handful of commercials for investing in gold and silver. We've passed the height of the market a while back, and I sure hope a lot of folks did not dump their savings into $50/oz silver or $1800/oz gold.
I'm not particularly shocked that we're seeing the prices drop as much as we are...the timing is a bit odd, as most of the market's fundamental problems (weak economy, QE4ever) remain. And I didn't think we'd see it drop so dramatically over the space of 2 days...but a big correction is not a big surprise to me.
That said, I think the panic is pushing prices below where they should be. We'll see where the prices of these metals bottom out...that would be the time to buy in. We'll bottom out, see a rally and then have things stabilize, at least for a while.
4/16: Edited to add, it looks like PMs are bouncing back today as bargain hunting sets in.