What is the general rule of thumb on pricing junk 90% silver?

[wdrob]

It seems easy enough to figure out based on one ounce of junk silver should be worth 90% of spot price plus a modest premium, right?

 

But what I see more often than not is that junk silver is sold by the dollars worth and it always seems to carry a higher premium that I have yet to be able to understand.

 

Just curious.

 

 

 

 

[Raisethis2]

I've only seen it based upon per dollar face however, worn examples don't have the actual weight that newly struck examples have so any premium above per dollar face times number of pieces is a tricky situation.

 

I believe that a 5% weight loss on a well worn coin is considered normal.

[RWB]

Keep your left thumb on the scale and use the right to text the smelter that you've found a sucker and are reeling him in.

[wdrob]

 

Keep your left thumb on the scale and use the right to text the smelter that you've found a sucker and are reeling him in.

 

 

 

I've only seen it based upon per dollar face however, worn examples don't have the actual weight that newly struck examples have so any premium above per dollar face times number of pieces is a tricky situation.

I believe that a 5% weight loss on a well worn coin is considered normal.

 

Yes that may very well be true on the estimate of loss but I guess what I am asking is if the current silver spot price was $20.00 / oz then what should/would be a fair price for $1.00 face of junk silver?

 

 

[thebeav]

The fact of the matter is that 'junk' silver can either trade at a premium or a discount.

Generally, over the past 35 years or so, that I have been involved, a premium exists when the price of silver is lower and demand for 'physical' can be higher. A discount exists when spot silver is higher and the demand decreases, or, in the case of the 1979 boom, refiners were so backed up with work that checks were 3 months behind.

When you are dealing with a commodity, such as 90, there is a finite amount. When demand is high, it can trade above melt. When demand slacks, it can trade at melt or even below.......

There is no cut and dry formula, other than melt (.715 oz/dol) for what bags may trade for at any given time.....

I hope that made sense......

 

Paul

[wdrob]

Yes Paul it did more so with a refinery perspective. I was aiming my question more to the silver hoarders and such.

 

The number of time I have seen someone advertise in the Money Marketplace for example and state that they had $10.00 face of junk silver and they were wanting $18,00 on the dollar or the opposite where someone will create a thread asking for 90% junk silver and they were willing to pay $17.50 on the dollar.

 

That is more in tune with what I was asking about. And at times, it would seem as though spot might have only been half a dollar or a dollar higher than what they were willing to pay for $1.00 face on 90% junk.

 

That is why I was asking. Nothing more than trying to understand what is the advantage (in the minds of some) of 90% junk silver coins over a 1 oz bar of .999 for example that would sell for less.

 

Dooms dayers?

 

I also would assume that if silver spot prices were sitting at $20.00 / oz and someone was selling 90% junk silver at $1.00 face for half of that price it would be considered a good deal?

 

You take for example, on any given day you will find people buying and selling $1.00 face 90% Junk silver at or above the current spot price. When you figure a $1.00 worth of junk silver is only weighing .80 ozt - I would consider that a premium and do not understand.

 

It is not just eBay either. It is on this market place and various other places as well. So it isn't isolated to bidiots on eBay by no means.

 

Here is just a random listing and not even close to a isolated sell.

 

 

 

 

 

[coinman_23885]

I would consider 95%-105% of melt value of the coins to be in the ball park for junk 90% silver.

 

 

[Mr. Smith Guesser]

That is why I was asking. Nothing more than trying to understand what is the advantage (in the minds of some) of 90% junk silver coins over a 1 oz bar of .999 for example that would sell for less.

 

Dooms dayers?

 

Yeah I think the doomsday preppers believe that, if the sky falls, smaller pieces of silver will be easier to use as money. You can't break a one ounce coin into pieces. And if you were looking to trade your silver for something of low value (like a dozen eggs or a loaf of bread) smaller, junk silver would be ideal.

 

Some of the eBay listings for junk silver are clearly aimed at the preppers. These are real listings for junk silver on eBay right now:

 

 

 

 

[asdfgh]

First off, lets get the silver weight correct. Its .7234 oz silver per 1$ face on US 90 percent silver,

Not including silver dollars which is more. Reference is the red book.

 

I would always check the price at a bullion dealer. a bullion dealer who I have used in the past is selling

10$ Face for 142.79 at the current spot of 17.38.

17.38*.7234=12.57 so that is a markup of approx. 12 percent.

 

hopefully I got my math right...

 

[asdfgh]

Beware of advertisements that list silver in pounds. This is one of the biggest scams going.

Silver is traded in "TROY Ounces"

 

1LB avoirdupois = 14.583 troy ounces

 

There are numerous weight conversion sites you can use.

In the example above at todays spot price of 17.38

 

1LB=14.583*.7234*17.38= 183.35 they are asking 229.95 (not a good deal)

 

Also If someone tells you its a TROY pound thats even a worse deal.

1 Troy LB= 12 Troy OZ

[wdrob]

Mr. Smith - those ads always make me chuckle a bit.

 

First off, lets get the silver weight correct. Its .7234 oz silver per 1$ face on US 90 percent silver,

Not including silver dollars which is more. Reference is the red book.

 

I do not disagree with that at all. I made that statement without fully explaining my intent. I took my scale out and placed 2 Walking Liberty Halves on it when it was set to ozt and it was reading between .79 and .80.

 

I was not intending to imply that the content of the half dollars was .80 ozt but that even if someone that did not know the conversion process for determining the actual silver content in 90% silver were to do just as I did, they would clearly see that it falls short of an actual troy oz of silver.

 

Yes I understand your math and it looks (close 11.3%) right to me.

 

Silvertowne right at this moment:

 

 

• 90% Junk Silver = 13.8% Markup
  
• 1 ozt .999 Silver Bar = 11.6% Markup
   
  

 

And the silver bar ships free. The junk silver does not.

 

So once again it shows a clear premium for 90% junk silver over .999 pure silver. That was my point of confusion. It is not just on eBay. Nearly everyone (for some reason or another) believes their 90% junk silver is better.

 

 

[thebeav]

First off, lets get the silver weight correct. Its .7234 oz silver per 1$ face on US 90 percent silver,

Not including silver dollars which is more. Reference is the red book

 

Yes, this is correct for brilliant uncirculated 90%......

The number used in the industry, an accepted average for circulated 90%, is .715 oz/dol.

 

Paul

[Kurtdog]

Mr. Smith - those ads always make me chuckle a bit.

 

First off, lets get the silver weight correct. Its .7234 oz silver per 1$ face on US 90 percent silver,

Not including silver dollars which is more. Reference is the red book.

I do not disagree with that at all. I made that statement without fully explaining my intent. I took my scale out and placed 2 Walking Liberty Halves on it when it was set to ozt and it was reading between .79 and .80.

 

I was not intending to imply that the content of the half dollars was .80 ozt but that even if someone that did not know the conversion process for determining the actual silver content in 90% silver were to do just as I did, they would clearly see that it falls short of an actual troy oz of silver.

 

Yes I understand your math and it looks (close 11.3%) right to me.

 

Silvertowne right at this moment:

 

• 90% Junk Silver = 13.8% Markup
  
• 1 ozt .999 Silver Bar = 11.6% Markup

And the silver bar ships free. The junk silver does not.

 

So once again it shows a clear premium for 90% junk silver over .999 pure silver. That was my point of confusion. It is not just on eBay. Nearly everyone (for some reason or another) believes their 90% junk silver is better.

Figure your melt value here.

[wdrob]

 

Thanks Kurt!

 

I never knew what Coinflation was used for. But I did not renew my membership with PCGS either (I think). But all attempts to change it from 'Auto Renew' to not auto renew did not seem to work. It is almost as if PCGS is dead set on forcing you to renew.

 

 

 

 

 

[Kurtdog]

Thanks Kurt!

 

I never knew what Coinflation was used for. But I did not renew my membership with PCGS either (I think). But all attempts to change it from 'Auto Renew' to not auto renew did not seem to work. It is almost as if PCGS is dead set on forcing you to renew.

Ah, Bill, you didn't read the fine print. You're signed up on a lifetime contract. You walk off, that's breach of contract. Their lawyers are relentless. You could lose everything. You could end up living in a cardboard box under a freeway overpass. They don't care. They sue anything that crosses them, even doctors. If you know what's good for you, you better pay. They got spies who come here. You can't hide. They'll find you.

 

PS: You think I'm kidding?

[jackson64]

I actually understand the $18.50 price of ebay junk silver... when one factors in free shipping, appx 10% final value fee from ebay and 3.5% paypal fee, it appears as if the seller is actually seeing a BELOW MELT return on his sales.

 

Ebay and Paypal are the ones that truly profit from this ( and the USPS to some degree.)

 

As to why someone would choose to pay more or nearly the same for junk silver when they can get pure .9999 at the same costs-- it makes no sense other than:

 

smaller increments for some trading medium or

maybe they are cherrypicking for die varieties, errors etc or

maybe it is just that they enjoy the coinage over a plain old hunk of metal?

[wdrob]

I was looking this evening (not necessarily to buy - just window shopping) and I saw a few selling right at melt, and a couple just under. So I guess I have just never paid enough attention.

 

I think your last reason was the best. Sit around and play with them like poker chips.

 

 

[bcbgboy13]

What about the "security" factor - how do you know that the contemporary silver coins, bars, rounds etc you buy from some forum ad, kijiji, Ebay are really silver.

The junk silver is much safer in this regards - and with them being a real circulation money I suspect the penalties will be more severe - after that you are messing with the government.

 

 

[wdrob]

 

 

What about the "security" factor - how do you know that the contemporary silver coins, bars, rounds etc you buy from some forum ad, kijiji, Ebay are really silver.

 

 

I have only ever bought Gold and Silver Bullion from "reputable" dealers, who have been established, successful, offer the most competitive prices, and are completely backed by a guarantee of authentic. When, and if I ever have bought second hand from a regular eBay seller it has been that such as Perth Mint Sealed Bullion. I don't even consider buying any of that Istanbul sealed gold.

 

I have never once second guessed the authenticity of a silver bar bought from, MCM, Silvertowne, Scottsdale, or possibly a few others I can't think of right off hand.