with silver at $7.17/oz. what is melt value of $1 in common circ. coins?
DennisH
Posts: 13,991 ✭✭✭✭✭
I've been stocking up on average circ. Mercuries and Walkers lately. What is the formula I can use to keep track of how I'm doing?
When in doubt, don't.
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Dime: .07234 oz. ($0.51)
Quarter: .18084 oz. ($1.27)
.900 fine Half: .36169 oz. ($2.53)
.400 fine Half: .14792 oz. ($1.04)
.900 fine Silver dollar: .77344 oz. ($5.42)
(Prices in parentheses based on $7.00/oz.)
(Thank you, Redbook!)
only thing to remember would be at roughly $1.39 the price of silver would match face value, and conversely $1 of face value circ silver has about .715 ounces of silver. (not including dollars which have a slight bit more.)
spot price of silver/oz. "times" face value
$1.39 = x .99-1
$4 = x 2.86-2.88
$4.18 = x 3
$4.50 = x 3.2175-3.24
$5 = x 3.575-3.6
$5.50 = x 3.9325-3.96
$5.57 = x 4
$6 = x 4.24-4.32
$6.50 = x 4.6475-4.68
$7 = x 5.005-5.05
$8 = x 5.72-5.76
$8.62 = x 6
$9 = x 6.435-6.48
$9.75 = x 7
$10 = x 7.15-7.20
$11.15 = x 8
$12.54 = x 9
$13.89 = x 10
so, at $7 silver, every $1 of face value is roughly $5 in silver.
so next time a dealer offers "4 times face", that's only valuing the silver at around $5.50! (a good deal a few years ago, but the shaft now, imo) granted 90% silver still needs to be purified for industrial use, or to become .999 bullion, but really, who is melting circ silver at these prices? 90% trades as silver does, with a lesser premium when buying (nice), and a slightly larger discount than when selling pure .999(a pain). still, if the price of silver goes from $4.50 to $7+, that spread is washed out manifold.
I still haven't gotten used to the "4X face" versus the old "3X face".
10/14 x $7.17= $5.12 (melt value of $1 face .900 Silver coin) Dime has melt value of $.51; quarter dollar, $1.28;half dollar, $2.56; silver dollar, $5.12.
Keep in mind that a common date silver dollar, excluding those in extremely worn condition and those in grade extremely fine and higher, should bring the seller about $1 more than whatever is being paid for the .900 fine silver they contain.
Great spirits have always encountered violent opposition from mediocre minds.-Albert Einstein
One, there is a cost involved in smelting these coins to extract the silver and two, dealers who purchase these coins to ship off for smelting also have an overhead and have to consider that buying it today may not be the price they can sell it for tomorrow. Shipping is costly as well, these things get mighty heavy in large lots and have to be insured.
Take your face value, say it's $100.00 and mutiply that by .715, now take that number and multiply it by the spot price of silver, let's say 7.10 for example.
Now you have a value of 5.076 as a factor or a multiplier for your face value. That is now $507.60. Most dealers will be paying somewhere around 50 to 70 cents back of spot. The higher the spot price the larger the "back of" factor will be.
For your $100.00 in face value, dealers will likely offer you anywhere between $437.60 and $457.60.
Remember also that worn coins will also bring you less as well. Slugs will bring a great deal less. Don't expect a premium for AU looking 50s and 60s coins either.
Just a few words from someone who has been involved in buying and selling melt silver coins for quite awhile now.
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
- when that stuff is wholesaled it still brings less than silver value
- very few folks come into a shop looking to buy $10.00 or $100.00 face value 90% silver so most of it has to be wholesaled
- when the coin shop is willing to buy your 90% at __x spot it still has to be counted, handled, stored, safe guarded and etc until enough is accumulated to make a larger (usually much) wholesale deal with yet another dealer that sells $1000.00 face value quanities only
- bullion is easily counted, recongnized as to quanity and easily and often resold at retail in as little as 1oz to many ounce quanities
My point is:
If you want to play the silver market: buy bullion (any quanity) or $1000.00 face value bags of 90% - anything else is really just extra work for a coin dealer to mess with and so will be bought accordingly
Just MHO
Court
<< <i>Looks for $1.00 of silver coins about $5.16 (with silver at $7.17/oz) >>
Actually the silver value is $5.126, assuming your coinage is not too well circulated.
Expect dealers/melt silver buyers to offer you $4.40 to $4.60 tops. Anyone who offers more is going to knock you back a percentage for wear.
40% Kennedy halves also have a small negative going for them as the smelting is costlier. They will take at least a 10% hit, sometimes more.
I buy quite a bit from board members and I pay a little more than dealers, I don't have their overhead and I can sell for more than the average guy due to my long term connections.
This is not meant to be an attempt to slip in a BST post. I post there when I'm looking to buy as several board members can attest to.
Right now I'm geting plenty of offers from long time sellers as it is.
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
if/when i cash out, it will be through e-bay over a period of time. this is a medium that really has revolutionized buying and selling of collectables. no more does one have to settle for selling at a discount because the dealer is the only one you can find buying. buyers abound, and pay for the shipping.
i agree though, if one wants to profit from the buying and selling of silver, even with these wild moves lately, you either need to be a dealer or already sitting on a large hoard at a good base price. silver bullion itself is a chore.
there's always the commodities futures market, but you better be damn good at the timing the market and conservation of capital. at least there though, you can buy and sell silver as the market moves, with the smallest spread possible. being leveraged 10 to 1, or whatever the margin on the silver contracts is running, could bite one on the ass, and has kept me on the sidelines so far....
sure would have been nice to jump in hard when the price was bouncing off $4.50 there for a long while, oh well.... i felt the same way when i look at the Euro and remember pondering opening an off shore account when the EU/US rate was flip flopped, would have been a good 30%-40% move in US dollars, for money sitting in the bank for 2-3 years. wont get that chance for a long while again.
edit:ramble, grammar, spelling,...
fair enough, the $100 in face i bought in the low $6 range a while back i could break even on now selling to a dealer. i guess when it goes through so many hands the spread widens as everyone needs to cover their costs and make a buck. buy for .50 back of spot, sell for .50 over. i wonder though, what work did the dealer put into making the bars or coins that aren't melted but merely flipped after a short while in a hot market?
still, silver rarely goes for less than melt on ebay, sometimes a great premium. factor in fees and time and it might be a wash, then again, might not.
of course, if the market flops fast, i might be sitting on my silver for 10-20 years like the generation of market mis-timers before me who are only in the past year or so getting their due rewards for holding silver, and an exit.
<< <i>sure would have been nice to jump in hard when the price was bouncing off $4.50 there for a long while, oh well.... i felt the same way when i look at the Euro and remember pondering opening an off shore account when the EU/US rate was flip flopped, would have been a good 30%-40% move in US dollars, for money sitting in the bank for 2-3 years. wont get that chance for a long while again. >>
FWIW, back at the end of '01, I put away 15,000 ounces of bullion in 100 ounce bars when silver was around $4.25. They are still sitting in a bank vault.
Awhile back I mortaged my nearly paid for home and sold several things to put 200+K into silver bullion. Sold it all near the peak of $8 in '04. Paid the house off, paid the quarterly taxes. I have a few more to pay but I will pocket a tidy sum as well.
I've been both fortunate and lucky but silver has been very, very good to me. I still buy in both large and small quantities and just add them to the hoard.
I am of the belief that silver will be in the $11-$13 range in a few years and that it will stay there as well. On this board I am in a select minority in my beliefs.
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
<< <i>For your $100.00 in face value, dealers will likely offer you anywhere between $437.60 and $457.60.
fair enough, the $100 in face i bought in the low $6 range a while back i could break even on now selling to a dealer. i guess when it goes through so many hands the spread widens as everyone needs to cover their costs and make a buck. buy for .50 back of spot, sell for .50 over. i wonder though, what work did the dealer put into making the bars or coins that aren't melted but merely flipped after a short while in a hot market?
still, silver rarely goes for less than melt on ebay, sometimes a great premium. factor in fees and time and it might be a wash, then again, might not.
of course, if the market flops fast, i might be sitting on my silver for 10-20 years like the generation of market mis-timers before me who are only in the past year or so getting their due rewards for holding silver, and an exit. >>
Many coin shops stay open because 25 to 40 percent of their profits come from bullion dealing. Without it, there would be far fewer coin shops and higher prices on numismatic coins. Ebay has it's good points and bad points. I don't buy there because people do bid too high. I don't sell there because I don't have the time nor desire to deal with a crazy public. It's fine for a few items and small amounts. Everyone I deal with agrees it isn't worth the trouble when you are moving larger amounts. I'll take my deal at a fixed profit and move on, eBay would multiply the few problems I have in my daily life by a factor of 1000.
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
<< <i>For your $100.00 in face value, dealers will likely offer you anywhere between $437.60 and $457.60.
fair enough, the $100 in face i bought in the low $6 range a while back i could break even on now selling to a dealer. i guess when it goes through so many hands the spread widens as everyone needs to cover their costs and make a buck. buy for .50 back of spot, sell for .50 over. i wonder though, what work did the dealer put into making the bars or coins that aren't melted but merely flipped after a short while in a hot market?
still, silver rarely goes for less than melt on ebay, sometimes a great premium. factor in fees and time and it might be a wash, then again, might not.
of course, if the market flops fast, i might be sitting on my silver for 10-20 years like the generation of market mis-timers before me who are only in the past year or so getting their due rewards for holding silver, and an exit. >>
Dealers aren't selling for .50 over. I know several who would kiss your feet to sell to you at that. Most dealers are wholesaling at .30 back of spot. Flipping bars is a good way to make a quick buck. Except that not many people are walking in off the street with 100 ounce bars. They aren't paying .50 back on .999 fine, usually only .20 back, maybe less. With me, I can get very close to spot from the folks I deal with. If it goes up, I make a little bit, down, I lose. They aren't getting .50 over on .999 bullion either. Try .20 to .30.
It's a lot tighter market than some peole seem to think it is.
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
<< <i>You can go direct to a smelter if you wish and do not need a dealer. It depends on how much you have to melt. 40% halves are tough, most smelters won't take them. >>
Yep, that's possible I suppose. I called Silvertown recently. They treat the public like fools. I guess I didn't have a big enough name for them. I can do better locally than the insult they offered me. I wasn't offering any amall amount of 90% coinage either.
Turns out, I pay more than they do and I can turn a profit at it. Tells me they are really ripping the public.
I guess I'd rather be a medium to small sized fish in a large pond than deal with sharks in the ocean.
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
i must admit though, my first thoughts on reading about your great market timing was a hearty "YOU SUCK!", but your gain was clearly earned, and the risk is/was there. i have a question though, why not try the futures market? or do you? you seem to have the physical to back up a few 5000oz. contracts.
as for the spreads i mentioned, they were off the top of my head, and on the "screwed" end of the retail scale that some buyers and some sellers end up paying on smaller silver transactions (<100oz), like selling to a strange dealer or bidding to high on e-bay. i would have *loved* to have ran into you a year ago!! i have been learning the hard way and am glad the run in PM stocks blows away any flubs i make while i stash away the physical for that long off rainy day.
i was calling around to a couple local places here (boonies, canada) to do some fact checking and some joker tried to offer me a *buck* (granted a loonie, about .80US) back of spot for 5 x 10oz and a 50oz bars (100oz) because they weren't "recognized". he could only offer his full price .50 back of spot (again, canadian) if there were JM bars. tried to tell me some jive about JM are the only .999 bar canada recognizes/authorizes now, i laughed, as i know my 50oz engelhard bar and 10oz. silver towne and 1981 SF u.s. assay bars are every part .999 silver as a JM bar.
<< <i>why not try the futures market? >>
A post after my own heart. Highly interesting thread throughout.
The principal problem of playing commodities futures (in my humble opinion) is the risk of getting whip-sawed out of your position. On a single silver contract, (with my broker at least), the margin is $2700. A ten-cent move against you would be a loss of $500, so if silver were to drop 50 cents after you opened your "buy" position, you'd be down $2500 and getting called for more juice. Let's say you lost heart and dumped the position; typically a few days, or weeks later, it goes up and beyond your original price causing you to "miss the market".
There is also a time constraint with futures--3 months forward, 6 months forward, etc; so, you can be right about the price going up (or down) but maybe it does go up (or down), not soon enough for you to turn a profit. Then you have to establish a new position. With bullion, you buy it, you hold it as long as you like, essentially setting your own "buy" and "sell" prices. Like everything else, of course, the same strategy applies: buy low, sell high. Good luck.
<< <i>great info deadhorse! we're obviously talking apple and oranges considering the amounts you are moving, and the speed you are doing it. i intend to sit on what i'm slowly buying for years to come as well, and never intend to have a hoard worth more than a certain percentage of my total assests.
i must admit though, my first thoughts on reading about your great market timing was a hearty "YOU SUCK!", but your gain was clearly earned, and the risk is/was there. i have a question though, why not try the futures market? or do you? you seem to have the physical to back up a few 5000oz. contracts.
as for the spreads i mentioned, they were off the top of my head, and on the "screwed" end of the retail scale that some buyers and some sellers end up paying on smaller silver transactions (<100oz), like selling to a strange dealer or bidding to high on e-bay. i would have *loved* to have ran into you a year ago!! i have been learning the hard way and am glad the run in PM stocks blows away any flubs i make while i stash away the physical for that long off rainy day.
i was calling around to a couple local places here (boonies, canada) to do some fact checking and some joker tried to offer me a *buck* (granted a loonie, about .80US) back of spot for 5 x 10oz and a 50oz bars (100oz) because they weren't "recognized". he could only offer his full price .50 back of spot (again, canadian) if there were JM bars. tried to tell me some jive about JM are the only .999 bar canada recognizes/authorizes now, i laughed, as i know my 50oz engelhard bar and 10oz. silver towne and 1981 SF u.s. assay bars are every part .999 silver as a JM bar. >>
ychange,
Sorry, it was way past time for me to post and try to remain coherent, I was propping my eyelids open as it was.
At the very end there I found out that you are in Canada and in the "boonies" as well. That certainly doesn't help your position. I happen to live in Houston which offers me far more opportunities as far as dealers go. I could not do what I am doing in a remote rural area. You are at a distinct disadvantage there.
Regarding the futures markets, see gamers post. He put it well. I have a disdain for paper.
Consider what happened to the folks holding paper silver back in '79-'80 after the government illegally changed the rules. They were essentially ruined to save the hides of Wall Street, Chase Manhattan, etc. and it was "legal". I guess they got some nice tax write-offs, but that's not what most of us are looking for.
Mrpawn made some valuable contributions as well and his advice was sound.
As far as JM bars versus others, that was nonsense. Englehard is the recognized standard, JM is fine, CM, Silvertown, US Assay, etc. I have stuff from them all. I have a fair amount of Canadian bullion coins as well. Bullion is bullion, well, except for those Chinese bars floating around eBay. Most of those are actually lead.
Anyway, this has been a great thread and a chance for some common misconceptions to be disabused.
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff