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Silver Prices for Junk Coins
bullionsilver_hawaii
Posts: 33 ✭
Many local coin dealers on the island sell "junk" silver (AG-F graded) coins for x multplied by face value. I use x to represnt the number the multiply the face value by, making it easier for them to calculate the price of the poorly graded coin. I know this isn't an advanced math class, but how do you find x? Silver is currently at $17.42/oz. of May 31, 2017.
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The dime has 0.072 Troy ounces of pure silver.
The quarter has 0.18 Troy ounces of pure silver.
The half dollar has 0.36 Troy ounces of pure silver.
One dollar face value in any combination of these coins has 0.72 Troy ounces of pure silver.
At $17.42 per Troy ounce,
A dime is worth $1.25;
A quarter is worth $3.13;
A half is worth $6.26;
One dollar face value in any combination of these coins is worth $12.54.
So most people would say that the coins are worth 12.5 times face.
10 cents times 12.5 equals $1.25;
25 cents times 12.5 equals $3.13;
50 cents times 12.5 equals $6.25;
One dollar face value in any combination of these coins is worth 12.50.
So, that's how you get 12.5 times face value.
For a practical matter of buying and selling, you should expect a dealer to have a "spread" in buying and selling.
This means that when 90% silver coin is 12.5 times face value, a dealer may offer to buy coins at 11.5 times face and the dealer may offer to sell to you at 13.5 times face. This "spread" between buying and selling is where the dealer obtains his profit. This spread is normal and the spread will vary depending on the size of the transaction and possibly upon the condition of the coins (grungy worn coins will bring less than nice semi-lustrous coins that look near new).
Note: A traditional silver dollar (1878-1935) has 0.77 Troy ounces of pure silver, a little better/heavier than the smaller coins. But most silver dollars will sell at somewhat higher prices and that is a spdifferent topic.
The math isn't difficult and I hope this helps.
I hope this doesn't have significant typos.
@BillDugan1959....Excellent explanation.... there are also silver conversion sites online... google is your friend. Cheers, RickO
Agree & so is coinflation, our host's conversion website:
http://www.coinflation.com/
Sheesh. Our hosts have a link to one. May as well suck up and point to it...
At the very top right of this page (I don't know if it's there on mobile), is a link to Coinflation.
From there, you can get values based on current spot for coins, both by type and numeric calculator. (They even include base metals.) From there you can calculate current par value vs. metal value.
I don't know how many points a coin store would add to the transaction, but it's going to be above spot...
You get face value by -
multiplying spot price times .715
Spot price x .715 = face multiplier
interesting subject.
But.. I believe all these conversion sites , and easy to use they are, do not include the cost of getting to net silver:
that is, in their tables they convert the type of coin to .9999 silver from raw coins.
they "forget" that the cost involved to "convert" to fine silver is about 20%. i.e. accumulate, store, interest on investment, minimum needed, melt cost, assay cost and handling like getting the bucket to a place etc.
usually there are minimum charges involved. I am aware of a min charge of $ 200 and 50 cent per ounce beyond that. so, you need to have at least 400 OZs to make it viable. if you are under 400 OZ it still costs you the $200. the more you submit, the less your cost will be as some aspects do change with higher quantities.
Perhaps you guys know a way to circumvent all these costs and have a lower cost method to get to recognized .9999 fine.???
It is my understanding that $1000 face value bag of U.S. 90% silver coin is a perfectly acceptable standard investment product and that most of these bags go into vaults and not into the melting pot. If some get melted, it is a slow and not common practice.
But I am willing to be corrected if things have changed or if I am wrong about this.
Hats off to Bill. He had the clearest, succinct explaination I've seeen.
My local coin dealer is giving 10-11x face right now. You have to consider wear = slightly less silver.
The guys I buy from sell it by weight(specifically grams), not necessarily face value. They could care less if it was a AG or AU coin but only about the weight. Found several MS coins there too!
(snip)
No one buys coin silver (these days) to refine it to .9999. They buy it because it's a recognized source that's 90% silver.
It's not any different than 21.6k gold the mint sells. It retains value because it's recognized source and weight of gold, even though it's only 90%.
I bet they will if silver hits $50/ozt again...
I essentially use spot x .7.
That gets you in the ballpark.
What rawteam1 said.
This is beyond the scope of this thread, but to really replicate the heady days of late 1979 and early 1980 (when the silver coin was indeed backed up at the refiners), one would suppose that silver price would have to be north of $200. Seems difficult to imagine today - there will be lots of people bailing out first if silver doubles from here... $35 seems tough to get back to...
U need to calculate the BV of the coin in question in order to evaluate their price. ASW x spot = BV.
Their saying x times face means nothing if u don't do this. On US coins u need have this memorized (individual ASW) in order to make a decisive coin deal.
I would want to know their asking price relative to BV.
The Wall Street Journal daily lists the settle for the $1000 face bags. Lately it has been just over $13,000.
some B&Ms weighing the silver coins
One of our local coin shops buys $1,000 to $5,000 face in U.S. 90% silver coin every week. You bring the coins in, they run them through the coin counter, and they (presently) pay you off at 11 or 12 times face value. The people who work in the shop would laugh their arses off if you suggested the coins needed to be weighed.
That way, they can just ship it out to a bigger dealer for 12X face. No fuss. Good check.
The coins actually exhibit fairly little wear. So that's a straw argument for paying considerably less money. Note....that same B&M likely won't pay you a penny more either for BU 90% silver.
Then they can laugh and shove it. I don't expect them to weigh it but do calc BV vs their offer. Would not want all that junk.
U cite what they pay vs face - what is this vs BV?
If we can keep using the numbers in my example,
We have established that bullion value is 12.5 times face.
Say that the dealers pay 11.5 times face.
Divide 11.5 by 12.5, which equals 0.92
Multiply 0.92 times 100 (to obtain a percentage) which results in 92%.
They are paying you 92% of bullion value. That math ain't any kind of rocket science.
Before you clench and twist your bowels over that small haircut,
As roadrunner said, your smaller dealer sells it to a larger dealer higher up in the food chain. The guy you sell to presumably has his costs, the risks of handling cash and precious metals, costs and risks of shipping, etc. It's not a bad deal for the small seller, really.