Education on Gold, Silver & Platinum Coins
WEIGHTS AND MEASUREMENTS:
As you read through the various described coins you will see the abbreviation AGW & ASW This means Actual Gold and Silver Weight. Any alloy is disregarded, and this is the amount of pure 24K gold or.999 silver contained within the coin. The AGW is expressed in troy ounces as all precious metals are bought and sold in troy ounces which weigh about 10% more than an avoirdupois ounce (an ounce of food, postal letter, etc).
31.1 grams = one troy ounce 480 grains = one troy oz. 1 American pound = 14.58 troy oz. 28.3 grams = one avoirdupois oz. 1000 grams = 32.15 troy oz. (a “kilo”) One “troy pound” = 12 troy oz.
Gold Coins & Ingots
b71b1e This 22K gold coin contains an ounce of pure gold and is alloyed with approximately 1/10 ounce of copper. Fewer are now produced, but there are still many millions in the U.S. Most all are in mint condition, and no dates are worth more. This coin is very popular, because it is universally known and sold at the smallest fraction over the gold price. If you can get them at a premium lower than the US eagle or other gold one ounce items, it is a good buy.
U.S.GOLD EAGLE: When the government created this $50 gold coin in 1986 it was meant to compete with the Krugerrand, so they made it the same physical size, same fineness. The only difference was to add a 3% silver alloy giving the coin a more golden look as opposed to the coppery-gold appearance of the Krugerrand. The government sells gold Eagles only to 12 big dealers (distributors) at about 3% premium over the gold price. Fractional Eagles are also available, but sold at a higher premium and are recommended only for gifts & jewelry. Eagles generally sell for about $10-15 higher than the Krugerrand, but some of that is usually recovered when sold back to dealers.
US 24K BUFFALO: This is was released in June 2006. It is the first ever US .999 pure gold coin. The premium is a little higher than for gold Eagles. They are absolutely beautiful coins about the same physical size as the old $20 gold coin, and each one comes packaged in soft mint plastic. Due to the higher premium they are not that popular among investors. In our opinion we see no reason to pay the extra premium.
U.S. $20 GOLD COIN: This .900 fine gold coin contains .9675 AGW and was last made in 1933. The numismatic value varies greatly due to demand, availability, condition, and the price of gold. This is the same story as common silver dollars. When gold is cheap there is a large premium over spot. When gold rises like in 2011, the premium shrinks to practically nothing. We don’t recommend paying much over AGW for common date circulated $20 coins, however high grade uncirculated and rare dates are very valuable and tend to go up much faster than gold.
CANADIAN GOLD MAPLE LEAF: This 24K, $50 face value coin contains one ounce of pure gold. It sells for a little less than the US gold eagle and is very popular in Asia and places where people prefer fine gold. This, the Eagle, and Krugerrand are just about a toss up as to the best way to go. Therefore, buy whatever is the cheapest.
AUSTRIAN OR HUNGARIAN 100 CORONA AND PHILHARMONICS: The coronas are .900 fine gold, .98 oz AGW coins. Austrian or Hungarian coins have the exact same physical size and AGW. Both are official government restrikes, made many years since 1908 or 1915. There is nothing wrong with the coins but the odd weight, .98 oz, makes it hard to figure the gold value. Not recommended unless you can get them at or near their actual gold content. The Austrian government also makes an ounce Philharmonic .999 gold coin, popular in Europe but not many are sold in the US. If cheap enough buy them..
CHINESE ONE OUNCE PANDA: This is a beautiful 24K one ounce gold coin, made since 1982. The Chinese change the designs of the Panda on the coins each year giving a few of the early dates have considerable numismatic value. They became very popular in the US, in fact, many Americans bought one every year to get each new design. The first issue, 1982, was selling for over $2000 and the premium for even the common Pandas was $50 or more. Then the June 1989 massacre of the dissident Chinese students in Tiananmen Square ended US popularity of the Panda gold coins, and now most trade just a little over the gold price. The 1982 date and few others still have some numismatic value. Pandas are a good deal if they can be found at a low premium.
MEXICAN 50 PESO: This .900 fine gold coin was legally bought & sold in the U.S. before 1975 when Americans were not allowed to own gold. The AGW is an oddball 1.205 troy ounce, thus most buyers will avoid this coin. No one likes the unusual weight. This coin is not recommended unless it is available for a really inexpensive price.
OTHER GOLD COINS: There is no shortage of selections. You can buy any of the following gold coins: sovereigns, roubles, ducats, lire, francs, rands, marks, etc., etc. They have old dates and many are available in quantity in uncirculated condition. If you can get any world gold coins, at the AGW go for it. Professional coin dealers are able to spot counterfeit gold but, be cautious buying at the flea markets, auctions or from strangers. Unfortunately there are a lot of individuals out to make a quick dollar at others expense.
Platinum & Paladium
PLATINUM COINS AND BARS: There are many one troy ounce coins to choose from: the new US $100 face platinum Liberty coin, the Canadian platinum Maple Leaf, Isle of Man Noble, the Australian Koala, and a couple others. They all contain an ounce of pure platinum. Several refineries make high quality, ounce platinum bars, die struck, serially numbered with certificates. If the premium is higher on the coins, we recommend the bars.
PALLADIUM: This is an industrial metal. Its main use is in automobile catalytic converters with a few applications in dental alloys, and in jewelry. However, some see it as an investment. There are a few palladium coins out there, mainly Russian. Most palladium is sold in the form of refinery one ounce bars. The US mint has been talking about creating palladium coins, mainly for collectors. We reserve our opinion about palladium.
Silver Coins & Ingots
U.S. COMMON SILVER COINS: These are the coins we used for change 1964 and previous. This category has very little numismatic premium. Their value is the 90% silver content. A slang term for these coins is “junk silver”, but dealers usually refer to them simply as, “90%”. These are often traded among dealers by the “bags”, which refers to a $1000 face value in a bag which weighs approximately 55 regular pounds, and 720 troy ounces of pure silver. Dealers usually deduct a few ounces for wear on the coins, using 715 troy ounces when figuring the troy weight of a “bag of silver”. If silver is $30.00 an ounce, then multiply $30 X 715 to determine the metal (intrinsic) value of the silver in a bag of coins. During inflationary periods there is usually a great demand for silver coins; then bags are bought and sold at a premium over the actual value of the silver. When the demand diminishes, bags trade at or below the silver price and are often sent to the refinery and melted. Silver coin is an excellent way to buy silver. American 90% silver coins are widely recognized, extremely liquid, and can be broken down into small denominations, as small as a single silver dime. Dealers will always pay higher for bags or half bags, opposed to just a few silver coins at a time. The only drawback to the silver coins is that they are quite bulky.
40% SILVER-CLAD HALVES: These are 40% silver content half dollars dated 1965-70. After silver coins were eliminated in 1965, Congress decided, for some obscure reason, to continue a small amount of silver in the half dollar. These contain outer layers of 80% silver, bonded (clad) over a core of pure copper. The ASW (Actual Silver Weight) is .148 troy ounces in each coin. Most all these get melted. The big drawback is even greater bulk than in 90% silver coins. Dealers always buy these below melt. This is not the way to go.
U.S. SILVER DOLLARS: These are very popular coins. They contain .77 oz. ASW and when silver is low there is always a large premium over the metal content. When silver is high (Like $30 in 2011), the premium shrinks. When silver goes to $50 an ounce common circulated silver dollars will be just be silver just like common 90% coins. High grade uncirculated dollars MS65 and higher and rare dates tend to go up much faster than the silver price and are recommended but not the common circulated ones unless near the ASW.
100 OUNCE SILVER BARS: These are very popular with people who want to buy a lot of silver. The buy-sell spread difference is very small, and the size is very compact. A #10 safe deposit box will hold more bars than a person can lift. Buyers should purchase widely known, accepted brands such as Engelhard, Johnson Mathey, Sunshine Mining, etc. Odd brands and older bars that are not exactly 100 troy ounces will be discounted when they are sold to dealers. 1000 ounce bars are a bit cheaper than 100 ounce bars, but due to the massive size and weight (about 70 pounds) they are not recommended.
GENERIC ONE OUNCE SILVER ROUNDS OR BARS: The coin-like rounds are always .999 silver and weigh a troy ounce. Silver bars have been minted by various “private mints” and refiners since the middle 1960′s. Many ingots are from the 1965-75 era, and had some commemorative or special event theme and were called “art bars”. At one time these were collectable but all are now worth only their silver content. The one ounce bars and rounds are almost always accepted by dealers, and there have been extremely few problems about weights or fineness. These are especially popular because the premiums over silver are relatively small, a few percent over the spot silver price. These are a good buy, if the premium stays this low. We recommend these due to the low premium (Jan 2011: Eagles cost $4 over spot; rounds and bars just $1.25). Premiums vary as to market conditions.
ONE OUNCE SILVER EAGLE COINS: These are legal tender $1 coins, were first sold by the US Mint in 1986 at $1.30 over silver. Since then they have raised the premium to several dollars over spot. Coin shops usually add a dollar or so to that and it makes for a relatively high premium considering that you can buy one ounce rounds and rectangles for only about a dollar or so over spot. Our opinion: It’s nice to own American silver like the one ounce Eagle coins but if silver rises to $50 or more, dealers will likely not pay more for silver Eagles than generic rounds or ingots, so why pay a big premium now? However, the eagle is the most popular one ounce coin, and most Americans are willing to pay extra. Neither the public, nor local dealers can buy these directly from the mint.
CANADIAN SILVER COINS: These might be OK for Canadians, but the American dealers look at them as undesirable 80% scrap silver. A dollar’s worth of Canadian silver coins, including the silver dollars is .6 oz. ASW. The Canadian government also sells a one ounce bullion coin, the Silver Maple Leaf, with a $5 face value. This is recommended only if you can avoid the higher premiums charged by the Canada Mint.
MEXICAN SILVER COINS: This includes the government issued “Onzas”, 100 Pesos, and Libertads. The one ounce Libertad is one troy ounce of pure silver, and is usually sold around the price of common generic rounds. Other silver Mexican coins with no collector value are scrapped out by US dealers. Buy only the one ounce Libertads if at the same price as silver rounds and rectangles.
STERLING SILVER MEDALS AND BARS: These were issued by “private mints”, and some sets of these have interesting themes such as space, trains, planes, automobiles, guns, etc. A few actually have had a small collector value, at one time, usually very small. 99.9% are now shipped to refineries and melted. Sterling silver is 92.5% silver, 7.5% copper. When silver makes a fast move up, all the refineries become overloaded, and the prices dealers pay for sterling silver is greatly discounted. Not recommended
.999 Silver Facts
.999 SILVER 1 TROY OUNCE COINS: These are issued by established governments and have some nominal value such as $1 for the US silver eagle; $5 for the Canadian silver Maple Leaf, etc. The nominal value is always a fraction of the silver value. It gives the coins legal tender status though no one would spend a coin for the face value when the silver content is many times that. These coins are more popular than silver rounds, and usually always initially cost more because the governments issuing them charge a higher minting fee. For example, the dozen or so distributors who buy the silver eagle coins directly from the US mint have to buy about a million dollars worth at a time, and have to pay the mint up front about $3 a coin over spot. Under normal circumstances the distributors sell these to coin and bullion dealers 500-1000 at a time for about $3 a coin over silver. During occasional mint stoppages, the distributors were selling the eagles way over the silver price due to the short supply and great demand.
.999 ONE TROY OUNCE SILVER ROUNDS: These are coin-like, made by silver mines (Sunshine Mining etc.), refineries (Engelhard Industries), and many other private mints. There has never been any scandal concerning these and generally all are accepted as one troy ounce of fine silver. These are almost always a dollar or two cheaper than the official .999 silver coins. Virtually none of these are collector items, but some buyers prefer the bigger name rounds like Engelhard and Sunshine. Among coin and bullion dealers, all are just silver rounds and there is rarely any price difference between them. These are all die, struck, just like coins, and have been bought and sold in the US since the early 1970’s.
.LARGER .999 SILVER RECTANGLES AND BARS: These are all made by refiners, mines and private mints, and commonly come in one, ten and 100 ounce size. All the one ounce size rectangles and newer bars are die struck. Most of the older 10 & 100 oz. bars were made from a casting process where the silver was poured into a mold and then the trademark and fineness and weight were later stamped. Modern bars are die struck or “extruded”, an Engelhard process where the metal is rolled (extruded) into thick sheets, trademark serial numbers and weights added in the same process. All 100 ounce bars have serial numbers. The larger size bars are popular because they are more compact, fit nicely into safe deposit boxes and easily hidden in homes.
1000 OUNCE COMEX DELIVERY BARS: COMEX uses 1000 ounce .999 silver bars to satisfy delivery contracts. These are rather ugly, like a long skinny loaf of bread, crudely poured and the stamps are usually crude. Some are exactly 1000 troy ounces, but many are a little lighter or heavier. The total weight is around 70 regular pounds. They are difficult to move and expensive to ship. The commodity exchange makes it very expensive (shipping charges, excessive fees) to add or remove from the COMEX warehouse. These are seldom bought or sold from the general public. In our store we see just a few per year. They can be sold to coin and bullion dealers for spot less a few percent, and are sold to buyers for spot plus a few percent.