Silver Values

What’s The Deal With Penny Hoarders?

The latest metal craze does not seem to involve silver or gold, but the base metal – copper. In fact, some enterprising individuals are actually hoarding pennies. The copper in a “copper penny” is actually worth almost 2 1/2 cents. So you can see why the government does not use this more valuable metal to mint pennies any longer.

It may just seem frugal to save your pennies. These days, it may be good business too. All the precious metals bugs are watching the value of silver and gold. But have you kept up with the latest news about copper?

A Penny’s Worth Of Copper Equals Almost Two And A Half Cents!

Modern pennies are actually made out of zinc. You need to find pennies that were minted in1982 and earlier because those are the ones that are 95% copper. Some enterprising individuals have even purchased $500 penny sorting machines so they can go through giant bags of pennies to pull out the early, copper ones, and then return the mostly zinc ones to the bank. Otherwise, it could be quite boring and time consuming to sort through giant bags of pennies!

Right now, it is illegal to melt down pennies for their metal. So penny hoarders will just have to hoard. They believe that the laws will change, and the US may even do away with the 1 cent piece. At that time, they believe their fortune will be made.

See The ABC News Video About Penny Hoarding!

The original penny hoarders video from ABC news was here.

Is Gold Used For Anything Today?

With all of the hype about the recent gold bull market, it is interesting to take a step by and figure out some really good reasons for the market increase.  After all, I can barely pass a street corner without seeing a We Buy Gold sign or watch TV without seeing a similar advertisement! It is only natural to have some questions about the true value of gold, and also about the recent upswing in the value of this precious metal.

Jewelry

Seventy-five percent of gold is used for jewelry. Rings, watches, necklaces, etc. are made with some percentage of gold to make them shiny and valuable. While this may be culturally important to some people, most of us have to agree that we can live without gold. We do not need it to eat, care for our children, or fill up our tanks.

The Uses For The Other Twenty-Five Percent Of Gold

• Electronics industry (11%)
• Gold Investors  (14%)
• dental industry (1,5%)

Why Is Gold So Expensive?

What Is Gold Used For Today?

Well, I am not any sort of professional analyst, and I cannot claim any special psychic powers either.  Actually, when it comes to an “emotional” commodity like gold, the psychic powers may be the most useful. The best answer I can actually come up with is that people regard gold as “money”. It is considered a safe haven when other investments are so unpredictable.

It might be safe to say that one reason gold is so expensive because of fear.  However, you cannot ignore the cultural importance of the shiny stuff around the world. It is hard to say how long that will support the price of gold, or even drive it further up.

US investors are not the only ones interested in gold’s value. China and India are too very large and well populated countries that like it too!

Are There Secret Or Hidden Ways To Invest In Silver Cheaply?

Actually this tip is not much of a secret, or even that well hidden, though some silver bullion gurus use it as their pitch to get you to subscribe to their newsletter. Some of these ads will say something like, Buy Silver For $3.

This website does not hide it, but  promotes this idea on the front page with our free US Silver Value Calculator. So, let me describe it in detail.

The So-Called Secret Silver Buying Tip

• A lot of US silver coins made before 1964 were 90 percent silver. Some other coins are 40 percent silver. If these are circulated, some people refer to them as “junk” coins or junk silver. However, they are hardly junk, but just may not have a lot of numismatic value. They are still valuable for the silver they contain!
• If you are very lucky, you may even find some in circulation, though that is fairly uncommon. I have read about people who still go by the bank to pick up rolls of coins to search for them. Sometimes they get lucky. Some people even get them in change at a store. This is rarer still. While this may be an effective method of finding treasure, it is probably very time consuming for the amount of silver you can find.
• Buying junk silver, like bags of US silver dimes or quarters, is usually a very affordable and low premium way to start. You may even get lucky and find a coin in your bag that is worth more than melt. Again, most of these bags have been picked over, so that may be rare.
• Where can you buy old US silver coins? You may find them at flea markets, EBay, auctions, or even in coin stores.

Are There Other Top Secret And Hidden Ways To Buy Silver?

Hopefully, you get that this title is a little tongue in cheek by now. Anyway, I have scored some silver candlesticks at a yard sale. I picked them up for $3, and sold them for $30 each to a local coin dealer. Be careful though, because pewter can look like silver, and it is easy to get fooled. I figured for three bucks I could either have candlesticks or make a nice profit.

Is the price of gold and silver bullion any real reflect of their “worth”, or is it more of a symptom of larger problems?

Louis Gargour, chief investment officer at LNG Capital reported that 2 fears drove up the price of gold:

• Fear Of Inflation – Bullion tends to hold real value, regardless of the ups and downs of the value of the paper dollar in your pocket.
• Fear of Currency Fluctuations - This is not just the value of one particular currency, but the value of that currency against other currencies is hard to predict. Some investors may have invested in other currencies in the past, but they are getting hard to predict.

So it may be hard to figure out the value of the dollar bill in your pocket. It may be hard to predict the value of that dollar bill against the Euro or the Yen. But people purchase gold bullion, and silver too, in order to purchase a stable currency. So that means that gold has become a sort of secondary currency in its own right.

What Are We Scared Of?

Well, the unstable situation in the Middle East and the US debt crisis are a couple of things to start with. When people get nervous about financial situations or world stability, they still turn to bullion as a way to preserve asset value.

It may not be surprising that the rich are stocking up on gold. It may be more surprising that the average investor is starting to wonder about precious metals too!

However, I think we can draw one conclusion. Gold and silver have become more popular, and more expensive, because they are becoming a base currency, and not because they have suddenly developed more intrinsic worth. So that is a word of optimism and caution. Gold and silver will have the value that the market says they will have.

What’s Wrong With TV Ads About Buying Gold?

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This is a guest post from veteran gold broker, Michael Hart. You can contact Michael Hart with your questions about buying and selling gold, silver, and other precious metals. Contacting Mr. Hart puts you under no obligation, and consultations are free.
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The Usual Suspects

If you’ve been thinking about getting into gold or coins, the first thing you want to do is READ THIS!

Did You Do Your Due Diligence Before Investing In Precious Metals?

I’ll tell you who I am and what I’ve been through. I’ve done all your due diligence for you, there is no need to replicate what I will depict, unless you have a lot of time to throw away, or you are a masochist. I’ll answer all of your questions here, or you can contact me later, and I will give you all you need to render a wise business decision, all the facts, examples, and questions you haven’t thought of, but that you should ask.

This information is crucial to gold buyer, because no one wants to divulge this information. If they did you probably wouldn’t buy from them, and this is why the coin selling industry isn’t fond of me.

The Big Gold Sellers

So you’re headed in right direction, but you know nothing or very little about this arena. This market can be very rewarding or create a scenario for failure if you venture into it without some knowledge or at least a good consultant to assist you in your acquisitions. There are many good consultants out there from the Big Gold selling entities you may have seen on TV or Radio. We will refer to them as “the usual suspects” they have been in the business of selling gold and coins for many years.
The guy on the other end of the phone at a big gold seller will be happy to assist you, and they will inform you, but they do have a personal agenda to sell you coins/ bullion, and the purpose of this book is to alert you to the many nuances of gold or coin purchasing/ ownership, so you don’t get into a situation of being upside down in a counter productive investment vehicle, because you thought you were doing the right thing and you found out later that that in hindsight you were mistaken!

Gold is great  but where  can you accumulate it?  After carefully reviewing all the Internet sites, and talking to many representatives from large and small coin selling companies. One thing is congruent.  They want you to buy from them, they have  all  been in the business for many years,  they are the old established firms, we’ve  dealt with the coin/bullion buying  public for years.  They all have  testimonials. And  they  all will sell you coins and or bullion.

 Their  objective is to SELL you their gold products.   But they don’t necessarily put the  purchaser’s needs  first  and  that’s OK    we’re in a  capitalistic  society, and they are entitled to make  a profit, but maybe their  profit line is too extreme.

 I call  these sellers  the “ usual suspects”, for  a couple of  reasons.   They all  recommend the  same  product,  they all   wont  mention the spread or  load  as we will get into soon,  and they  all  are hesitant to mention  some  very salient  points like buyback,!  We will  also be  getting into  because   that’s  the most important  part of you gold  ownership!.  Not  just the   accumulating  but the liquidating  portion of the equation.  Which no one really wants to mention, but  I will, and that’s  another reason  why they aint  fond of me!

Before you dial that number you see posted on a FOX news advertisement, in an AARP magazine, or anywhere else, please take some time to become an informed consumer! Some people dabble in gold, but others invest tens of thousands of dollars. There is a right way and a wrong way to do this.

Contact Me About Buying or Selling Gold before you lose a big percentage of your hard earned savings.

How Can You Buy Silver Cheaply?

There is a lot of excitement in the bullion community about the high price of silver. You can check today’s silver value here. If you are holding onto the silver ounces you purchased for $5 – $6 a few years ago, you are probably gloating. If you cashed out at $12, you may not feel that happy.

But no trains have left the station yet! There are still ways to purchase cheap silver if you are willing to do a little work. We’re not saying you can find bargain prices at the coin store or from bullion sellers. We are saying you can look for other sources of silver bullion!

1. Make sure you know the current value of an ounce of silver. The only way to figure out if you are buying bargain silver bullion is to know how much it is worth!
2. Consider items that contain silver like jewelry, silverware, candle sticks, sterling dishware. You need to find markings on the items that tell you what the silver content is. Be wary of getting fooled by silver plating, or even by pewter that just looks like the more precious metal!
3. Where to look? Try thrift stores, garage sales, estate stales, etc. I have snapped up silver candlesticks at a yard sale for $3!
4. “Junk” silver refers to coins with silver content. They are usually not high graded coins, but are valuable because of the precious metals they contain. Any US dime, half dollars  or quarters that are dated before 1964, are 90% silver. Many people do not realize that half dollars from 1965 – 1969 are still 40% silver. Also note that “War Nickels” minted between 1942 and 1945 are 35% silver! Some people comb through rolls of coins from the bank to look for treasure. Again, you can use our silver coin calculator to figure out the current value of “junk silver”.
5. Learn more about scrap silver from electronics or photography.
6. If you’re not sure about a purchase, either have a smart phone or somebody at home who can check the internet for similar items and markings.

Got any other tips to treasure hunt for bargain prices silver? Comment here and let us know!

Join the forum discussion on this post - (1) Posts

One of the biggest questions that most people have, and which we are revisiting now in November of 2010, is why is gold climbing this high. Now pay attention. The inflation price of the 1980′s gold spike of about $850 would be over $2k. So that may make you think.

There are industrial uses for gold. The computer on your disk contains a little gold. But at current prices, many companies are looking for substitutes. Most experts do not believe that industrial uses for gold justifies the price increases lately. Of course, gold is also used in jewelry. But most of us do not think that gold jewelry is such an urgent need that it would account for a price increase either.

So we keep coming back to one argument. Gold has the value that the market determines. When investor confidence in other markets is low, gold tends to spike.

Why is Gold Worth so Much?

I have been asked this question a few times recently. Just now we are seeing gold that is topping $1200 an ounce, and of course the optimists are hoping for $1250, or even $1500! But we know that we cannot eat this shiny metal, it does not appear to cure cancer, and we certainly cannot burn it for heat. Is the value of gold a leftover from some more primitive times when it was valuable because it was shiny and scarce?

Well, keep in mind that paper money is only valuable because we all agree it is. I guess we could burn it for warmth, but it would take a lot of dollar bills to keep us warm this winter. Hey, it takes a lot of dollar bills to pay the utility company anyway.

Gold Demand

Gold does have some industrial applications, but most of the demand seems to come from jewelry. We Americans like gold jewelry, but most of us could live without it. But in the far east, gold jewelry is more ingrained in the culture, and that demand is huge. Even though we don’t really think we need gold, people from other cultures do not regard it the same way.

Gold is Rare

I read an article that said all of the gold ever found could fit into a 150 foot square. I cannot authenticate that particular statistic, but is does provide an interesting visual image. Imagine a square about the size of 3 average sized home lots on each side. Now imagine that square is coverd in gold. It seems like a lot, but not when you try to divvy it up between all of the people on earth!

Gold is Money

For 5,000 years, civilizations have considered gold as money. Our US currency is not backed by gold, but the federal government. And yet we still do have stocks of gold.

You have to learn to think about the price of gold like this. It isn’t that the price of gold really varies so much. What fluctuates is the value of the currency (i.e. the dollar).  Many people believe that gold holds its value.

This is a very general example, but consider a $20 gold coin. In 1880, when a $20 gold coin had that value, a worker might earn that much in 2 weeks. Now that same 1 ounce coin is still about 2 weeks wages at the value of $1,200. This example is not exact, and is easier to do with silver.

So What Makes Gold Valuable?

Just like paper money, gold has value because the market says it does. Beyond that, it is used in industry some, and it a traditional precious metal used for jewelry.

Silver vs Gold – Which Will Do Better?

Well, again, I do not have my crystal ball.

 But I did see some interesting speculation on Seeking Alpha. They bring up the old point that silver is gold’s poor relation, and because it is considered to draw more value as an industrial metal (rather than money), that silver was not expected to do as well during a recession like the one we have as I write this. Silver also tends to be very volatile, and everybody from saints to tin foil hat wearers believe that the silver price is much more manipulated than the gold price.

But…..

• Silver is cheap, and barriers to entry are lower for Joe Six Pack
• If the silver market is ever allowed to do its own thing, there is plenty of evidence that the value could shoot up.
• During the last few weeks, the percentage increase in silver value has increased 4 times more than gold.

So…?

Keep watching the market. Plenty of us believe that silver prices have plenty of upside. But always DYDD, and only purchase what you can afford to lose.

Gold Jewelry Purity Calculations

We have seen a lot of talk about finding inexpensive gold jewelry to sell as “scrap gold”. And of course, we have also heard from people who are intereseted in selling their scrap gold for cash, and want to use the spot gold price as some indication of the value of their jewelry. The K or Karat system may seem confusing, but it is actually fairly simple, so let us give you a quick explanation of the value of gold jewelry as expressed in the spot price of gold.

Now note that you may be unlikely to get an offer of spot price for your spot price since many buyers – refiners, pawn shops, coin shops, or jewelers, need some sort of spread in order to make a profit. But if you are interested in selling, I want you to understand that spot price so you can make a decision about how close an offer is to the true value. If you are buying jewelry for the bullion content, and are not familiar with gold value calculations, this should give you an indication on where you should start making offers too.

Multipliers for gold purity:
24K = .999 = pure
22K = .917
18K = .750
14K = .585
12K = .5
10K = .417

So a 24K gold bullion coins is considered very close to pure gold. An 18K gold necklace is considered 75% gold, or take 18/24 = .75. See how that works? It is easy to understand that 12K gold would be 50 percent gold when you understand that you are starting with 24K gold as a marker for pure gold.

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