Silver Investing - Buying Silver From Classified Ads

Before I discuss the mauling silver prices have been taking lately, I want to share a couple of classified ads that recently appeared in my local paper offering silver coins for sale.

Ad #1: 250 Silver Dimes, $750. How good of a deal is this? Circulated silver dimes (I'm assuming they are circulated) are considered to contain .0715 troy ounces of silver. So 250 x .0715 = 17.875 ounces of silver. Divide $750 by 17.875 for a cost per ounce of $41.958. The seller probably placed the ad when silver was going for $39-$40 an ounce (just last week). Spot silver at the time of this post is at $31.05 so the current worth of each silver dime is $2.22 (31.05 x .0715). Paying the asking price of $3.00 per coin, or a premium of $.78 per coin, is a little steep. I'd pass on this one.

Ad #2: 6 Silver Dollars, 5 Walker 1/2, 5 Silver Eagles $575. let's look at this offer a little closer. Circulated silver dollars are considered to contain .7650 troy ounces of silver, Walking Liberty half-dollars .3575 ounces of silver and Silver Eagles a full-ounce of silver. So total them all up (6 x .7650, 5 x .3575 and 6 x 1) and you have 12.3775 ounces of silver. Divide $575 by 12.3775 and you get an asking price of $46.455 per ounce. Ouch!

To take advantage of either "deal" would require great faith that 1) silver will one day surpass $50 per ounce and, 2) the buyer is willing to buy and hold despite the volatility of silver. I think it will go above that price sometime in the future but there are probably better deals to be had with silver presently in the $30-$31 range.

Now on to the shellacking the price of silver has taken lately. I've discussed this before but there is a world of difference between the silver paper traders and those dealing with physical silver. From all accounts I have read, this drop in prices has U. S. precious metals dealers scrambling to fill the huge demand their customers see as a fantastic buying opportunity. Silver buyers in Canada are of the same mind. In an article titled "Maple Leaf silver coins seeing record demand" a spokesman for the Royal Canadian Mint stated they are on track to raise sales of its silver bullion coins by around 30 percent to 25 million ounces this year. The article is here.

You would never know that physical silver demand continues to be strong by watching the downward action - a probable result of technical paper trading in the futures market. The anti- higher-silver-price crowd certainly flexed their muscles last week - silver had its biggest single-day decline in two decades. More downward pressure came after the CME again increased margins on Friday. How many does that make now?

The U.S. Mint is starting to crank out Silver Eagles again after a slow September start. The total so far for the month is 3,425,500 (year-to-date 32,376,500) with a few more days to go. Still far from January 2011's total of 6,422,000.

Be sure to visit my web sites on silver to read helpful information on common U.S. and Canadian silver coins. Again, they are Silver Investing Simplified and Silver Investing Guide.

Thanks for reading. Keep the faith.

Silver Investing - Smart Phone Apps for Silver Coins

If you find yourself in a position to buy or sell silver coins (flea markets, private buyers/sellers, etc.) but are unsure of what they are worth at the moment, just take out your smart phone and find out. Here are a few smart phone apps that could save the day.

The first is called RRBI Silver Coins and is compatible with iPhone, iPod touch, and iPad. Requires iOS 3.0 or later. It's free and can be found at iTunes. Check it out here. The second is an Android app that essentially does the same and is also free. It can be found here. Hope you find this useful.

I just posted an entry on my Gold Investing Blog where I discussed gold and silver prices on September 11, 2001. Silver was at $4.18 and gold at $271.00. At the time of this post, spot silver is at $41.16 which is the strongest showing by far of other assets. You can see the article titled "Market Performance Since 9/11" here. It covers a number of asset classes and is interesting.

Silver eagle totals for August came in at 3,679,500. That is 3,679,500 ounces of silver used in support of that program but the U.S. Mint actually used quite a bit more in support of other programs - namely: 1) the 5-ounce 'America the Beautiful' coin series which used 175,065 ounces of silver in August and 1,902,000 ounces year-to-date; and 2) the proof U.S. Silver Eagle program which had sales of 133,460 in August and a year-to-date total of 726,921. So far in September 651,000 silver eagles have been produced with a year-to-date total of 29,602,000. Now that's a lot of silver. I hope they can keep it up.

I came across an interesting YouTube video titled "How are Silver Coins Minted?". Produced by Endeavour Silver Corp. (a mid-cap silver mining company headquartered in Vancouver B.C.), you will see the process from the melting of raw silver to the production of silver blanks (planchets) to the stamping out of silver rounds. The video runs just over six minutes and you can see it here.

My posts to this blog have been sporadic and will remain so for a little while longer. Once I get my scheduled surgery out of the way on 9/15, I hope to do better. Thanks for reading.

Silver Investing - Silver Price Holding Steady While Gold Flying High

I don't understand how the spot silver price can be stuck in such a narrow range while gold is charging full speed ahead - making new high after new high. Silver prices in the last 30 days ranged from a high of $42.27 to a low of $34. 77. But in the last week, silver has stayed in the $37 to $39 range while gold has charged ahead with record setting highs. Something is going on behind the scenes which is not meant to be disclosed to or understood by those who follow the price of silver.

On the positive side this represents a terrific buying opportunity if you believe silver is going to meet and exceed the $50 per ounce mark. If you are one to wander over to eBay and check on silver auctions with the intent to bid, I have some tips for you. I first posted these tips on my gold blog but will repeat them here only tailored to silver.

Tips On Buying Silver On eBay

Reuters recently published a blog entry titled "How Americans buy gold and precious metals on eBay". In this short entry it was revealed eBay’s gold bullion sales have jumped more than 60% from 2007 through 2010 with “almost half of the silver and gold buyers in the first quarter of 2011 never purchased these items on eBay before.” You can find the article here.

I have tracked activity on eBay for both gold and silver auctions for some time and even included some "ending soon" auctions on both my Gold Investing and Silver Investing web site pages. Only one fact surprised me in that they stated "There are two silver buyers for every gold buyer because silver is so much cheaper." I would have guessed a 5 to 1 ratio or even higher of silver to gold.

I have purchased silver on eBay in the past but never gold. There are two warnings I would give anyone before bidding on an eBay gold or silver auction:

1. It is important to watch the premiums you will be paying before bidding on a coin or lot. The Reuters blog entry mentions a 21% premium over spot silver for a Silver American Eagle. I would shop around for other silver coins or bars to invest in with lower premiums since the popular Silver Eagle will command among the highest premiums of any silver bullion coin. To be a smart shopper, you absolutely should know the spot silver price before bidding.

2. The blog entry also mentions the potential purchase price of a coin from a "top-rated seller". There are many, many auctions initiated by sellers that are NOT top-rated sellers. So how do you increase your odds of making a safe bid with a reputable seller? Here is what I would look for...

In the upper right-hand corner of each auction page is the seller's basic statistics area that identifies the seller's eBay name (if they are a top-rated seller, it will display that too), the number of transactions (with feedback) and the positive feedback percentage. To see what I'm talking about, go to Peace Silver Dollar, scroll down to the eBay auctions and click on any auction. If Top-rated seller is not displayed, I would look for several hundred transactions with 100% positive feedback. I would also try to deal only with sellers in my own country. Just keep in mind that only you can decide if bidding on an item is right for you. I take no responsibility for whatever gold purchases you successfully bid on.

For your information, I don't use eBay much for silver purchases. My personal preference is to use: 1) a smaller, local dealer for small purchases; 2) a large, reputable regional or nationwide dealer for larger and/or riskier purchases; and 3) eBay auctions if a good deal or "odd" coin pops up that I want -- in that order.

Thanks for reading. I hope you found this information useful.

Silver Investing - What Your Silver Coins Are Really Worth

People that have silver coins in their possession are naturally curious as to what they are worth. The purpose of this post is to give you a general idea of what your silver coins are worth if you were to bring them in to a coin dealer (or jewelry store accepting gold/silver). I am not recommending you sell your coins - that day will come but, in my humble opinion, that day is a ways off.

Let's start with the Morgan (1878-1904, 1921) and Peace (1921-1935) Silver Dollars. With spot silver at $39.27 and these silver dollars considered to contain .7650 in circulated condition, their "spot" value is $30.04. The price range you can expect to get will vary from approximately $24 to $29 depending on condition. These are for common date circulated coins. There are a number of exceptions and if you aren't sure if your coins are common date, see your coin dealer and/or visit my silver sites at Silver Investing Guide or Silver Investing Simplified.

Next, let's look at half dollars - the 1964 Kennedys, the Franklins (1948-1963) and the Walking Libertys (1916-1947). Again, with spot silver at $39.27 these silver half-dollars are considered to contain .3575 in circulated condition with their "spot" value being $14.04. The price you can expect to get will average about $12.55 for common date circulated coins. Here again there are exceptions, especially with the Walkers that have key dates and mint marks. More information can be found at Walking Liberty Half-Dollar.

For silver quarters, I'll cover the Washington (1932-1964) Quarters only. If you have Barber Quarters (1892-1916), you should consult with a trusted coin dealer since condition and a few key dates/mint marks can result in a tidy sum. With spot silver at $39.27 and these quarters containing .1788 in circulated condition, their "spot" value is $7.02. The price you can expect to get will average $6.25. Maybe a little more if in great condition. Key dates/mint marks worth much more are the 1932D and 1932S quarters.

Last are the silver dimes - the Roosevelt (1946-1964) and Mercury (1916-1945) Dimes. With spot silver at $39.27 and these silver dimes containing .0715 in circulated condition, their "spot" value is $2.80. The price you can expect to get will average $2.50 for common date circulated coins. There are some key dates/mint marks with the Mercury Dimes with the 1916D being the "super dime". See Mercury Dime for more details.

For Canadian Silver Coins, a general price guide is about 20 times the face value of 80% silver coins and 10 times face value of 50% silver coins. You can find more details at Silver Canadian Coins.

If you take your silver coins in and aren't quoted similar prices to those above, try another dealer. If you are an eBay Seller, it is possible you can get more for your silver coins as some outrageous prices are being bid for some of these silver coins.

One last item before I close is an interesting article I came across titled "11 Mentality Shifts of Silver Investors". I don't necessarily agree with all the details but it is an interesting read. You can find it here.

Thanks for reading.

Silver Investing - Recognizing U.S. Silver Coins

For the last few years, I have been carrying an 1881 Morgan Silver Dollar with other change in my pocket. This is not something I would recommend others do as the silver content of this coin gets a little less all the time. But I really like the Morgan dollar and will probably continue to carry it until it will be difficult to tell if the image of Lady Liberty is a man or a woman. When coins become this faded in detail, they reach the status of what some of us in the business called "pond skimmers".

What is interesting about this is the reaction I get when getting change out for a purchase. Clerks spot this coin which usually results in comments like "what is that" or "my Dad (or Grandpa, Grandma, etc.) has one of those" but they have no idea what it is or its value. If I were to tell them the value of this Morgan dollar is about $26.75 (with spot silver at $35), they would think I am putting them on.

Not knowing which coins have value can be costly. Not long ago my wife was in our local bank when a couple came in with two coffee cans of quarters. They found them when renovating an old house and wondered if the bank would exchange them for cash! I would bet a bunch that these were pre-1965 quarters worth about $6.25 apiece ($35 spot) and the bank was only too happy to give them a $1.00 Federal Reserve Note for every four quarters they turned in.

So here is a general refresher on common U.S. silver coins:

U.S. Nickels - only nickels between 1942-1945 contained a small amount of silver (.0563 troy ounces). There is no silver in other nickels.

U.S.Dimes - pre-1965 dimes contain .0715 troy ounces of silver and include the Roosevelt Dime (1946-1964), the Mercury/Winged Liberty Head Dime (1916-1945) and the Barber/Liberty Head Dime (1892-1916). It takes about 14 silver dimes to equal one ounce of silver.

U.S. Quarters - pre-1965 quarters contain .1788 troy ounces of silver and include the Washington Quarter (1932-1964), the Standing Liberty Quarter (1916-1930) and the Barber/Liberty Head Quarter (1892-1916).

U.S. Half-Dollars - pre-1965 half dollars contain .3575 troy ounces of silver and include the 1964 Kennedy Half-Dollar, the Franklin Half-Dollar (1948-1963), the Walking Liberty Half-Dollar (1916-1947) and the Barber/Liberty Head Half Dollar (1892-1915).

Kennedy Half-Dollars (1965-1970) - these coins are 40% silver and contain .1475 troy ounces of silver.

U.S. Silver Dollars - these include the Peace Silver Dollar (1921-1935) and the Morgan Silver Dollar (1878-1921). Their silver content is .7650 troy ounces of silver.


The silver content specified above is for circulated coins. Uncirculated coins have a slightly higher silver content since they have no wear associated with them.

Based on increased traffic to my silver sites Silver Investing Simplified and Silver Investing Guide, it appears more and more people are getting "educated" on the value of silver coins but still far from the majority. You are wise to be learning more about silver coins and, hopefully, investing in them.

Thanks for reading.

Silver Investing - Problems Getting Physical?

One of the resources I use to purchase silver is a person who operates out of his home and attends regional coin shows to do most of his dealing. This about as small-time as you can get for a coin dealer but he is honest, quotes me fair prices and I trust him.

Knowing he was going to another show last weekend, I contacted him a few days before and expressed an interest in picking up a roll or two of 90% silver half-dollars. I prefer Walking Liberty Half-Dollars but the Ben Franklins or even 1964 Kennedy Half-Dollars would be acceptable. He has not contacted me since which probably means he was unable to get even one roll (20 coins) of half-dollars in any of my three choices.

This is not too surprising and has happened to me before. Supplies of physical silver coins are tight and it seems buyers outnumber sellers by a wide margin. I know I am not interested in parting with any of my silver at this time with silver holding great promise to head back to the $50.00 per ounce price and beyond.

If I had been able to get at least one roll of any of the above half-dollars, what would be a fair price? The silver content of each circulated silver coin is .3575 troy ounces times 20 equals a little over seven ounces of silver. With spot silver at around $35 per ounce and taking the premium into account, I might have ended up paying around $275-280 per roll. But alas, it was not to be.

When you are buying 90% silver coins like this, it is important to know the silver content to help determine how fair the asking price is. It takes approximately 14 dimes or six quarters or three half-dollars to equal one troy ounce of silver. Knowing this plus the current spot price of silver will allow you to do a quick calculation of the premium being tacked on to the seller's asking price (and the fairness of the offer). Knowledge is power.

A final note: for those of you who have had trouble viewing my article on Morgan CC Silver Dollars, the problem has been resolved. Clicking on the link (above) will take you to the corrected page.

Thanks for reading.

Silver Investing - May 2011 Totals For Silver Eagles

The May total for Silver Eagles stands at 3,653,500, second only (in 2011) to January's 6,422,000! Year-to-date, 18,901,500 Silver Eagles have been produced and snapped up by a growing number of investors.

Talk of physical silver shortages continues to circulate but the spot silver price doesn't want to rise accordingly. Shouldn't the price get back on a rising track with such high demand and tightening availability? Not while the paper silver traders keep getting "in the way". To get a better understanding of this silver market, I recommend you read Silver Action a Reminder of the Risks of the Paper Market.

In the last few weeks, Richard Russell has come out strongly in favor of silver and his belief in a resumption of rising prices. The first appeared on May 10th and can be read at Expect Huge Rebound in Silver. The second was posted on May 30th and can be read at Subscribers Should Buy Silver Once Again. When Richard Russell speaks, I listen.

In my research of the last few weeks, I listed several potential stories for this post but decided to drop most of them in favor of this one that really caught my interest. It is titled "A 1980 copy of Playboy Predicts the Future for Silver". It explains the Hunt Brothers actions in the silver market at that time and offers some parallels to today's actions. You can see it here.

Thanks for reading.