Recently several people have talked to me about whether or not to invest in gold or silver as a hedge against inflation. . I know that some feel that precious metals will not retain their value in the future. So I am not going to give you advise about investments, but I will tell you a bit about gold and silver that you may find helpful.
Gold versus silver. I know people that have gold coins and they can be a good investment. However, in a trade situation after a major disruption to the economy, gold may retain a high value and it may be a problem to make an even trade. If all you have is a one-ounce gold coin, it will be hard to buy a loaf of bread or some fresh vegetables. You will have no way to make change. If you intend to purchase gold coins, buy denominations of 1/10, ¼ and ½ ounce coins.
Me, I prefer junk silver. To help you with your purchases or trades, I have included the following information:
Junk silver generally refers to pre-1965 circulated silver dimes, quarters, and half-dollars that are comprised of 90% silver and 10% copper. Major coin dealers generally sell these in $1,000 bags. The $1,000 reflects the face value of the coins (i.e., the legal tender value of the coins). People refer to the face value because, regardless of the denomination of the coins, $1,000 bags all contain the same amount of silver which is generally 715 troy ounces (the gross weight of these bags are approximately 800 troy ounces or 54.85 pounds). These bags are also available in $500 and $250 bags.
Many small coin dealers will sell you silver coins in small amounts. Check in your neighborhood and you will find a dealer who will sell you silver coins for cash and ask no names.
Forty percent silver bags consist of only circulated Kennedy clad half-dollars minted between 1965 and 1970, are available. Slightly lighter than 90% bags, these $1,000 face value bags contain approximately 295 troy ounces of pure silver.
- 1878-1921 Morgan Dollars and 1921-1935 Peace Dollars are 90% silver and contain .7735 troy oz of silver.
- One dollar of silver dimes, quarters or half-dollars contain 72% of a troy ounce of silver.
- A dime dated 1964 or before has 7.2% ounce pure silver.
- A quarter dated 1964 or before has 18% ounce pure silver.
- A half dollar dated 1964 or before has 36% ounce pure silver.
- A $1 dollar coin dated 1935 or before has 77% ounce pure silver.
- A war nickel dated 1942 to 1945 has 5.62% ounce pure silver.
- A Kennedy half dollar dated 1965 to 1970 has 14.79% ounce pure silver.
A troy ounce is larger than a normal ounce that is used in cooking.
Precious metals such as gold and silver are normally sold by the troy ounce. An ounce of gold is more than the typical ounce found at the grocery store. There are two systems for measuring weight. The one for precious metals is called the troy ounce.
The other is used for commodities such as sugar, grains, and typical grocery items. It is called the avoirdupois ounce. Every time you step on the scale at home or weigh food found in the grocery, you use the avoirdupois weight system. There are 16 avoirdupois ounces in a pound.
Avoirdupois weights – An Avoirdupois pound is equal to about 453.6 grams, or 14.583 troy ounces. One avoirdupois ounce = 437.5 grains, or 28.35 grams. One avoirdupois pound equals 16 (avoirdupois) ounces or 453.59 grams. That is the equivalent to 14.58 “troy” ounces.
When you purchase a 1-ounce silver or gold coin, you are receiving a “troy” ounce. If you put that same 1 troy oz. coin on a grocery store scale, you will find that it weighs about 10% more than the food ounce you are familiar with. It will weigh about 1.1 avoirdupois ounces. Consequently, a grocery store pound that weighs 16 avoirdupois ounces (or 453.59 grams) will contain about 14.58 troy ounces.
I hope this helps you to understand a little more about dealing in precious metals.