Silver Values

Well, the beginning of the Year brought a mad rally in the PM market, just like in many other commodities. Now we are experiencing a pullback which can be pretty agonizing, but silver and gold are finding support well above anything we dreamed of a year ago.

I am reading some PM newbies who bought silver at $20 or gold at $1k who are really worried about their investment. Of course, most of us have been playing this game a long time, and we have added to stacks when silver was $6 and gold was $600, so we can average the price over that long term move, and losing a little here and there is no reason to panic when looking at long term gains.

I am still bulllish, and even added to my stack a bit this week-end. However, I am not quite ready to plunge back in with both feet at these levels. I could either be very relieved next week or I could be kicking myself. Nobody has a crystal ball.

Please add your thoughts to the forum!

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The Uses Of Silver

Many people who buy silver as traders or investers spend a lot of time thinking about the price of an ounce of silver. They only think about demand as it relates to that price of silver. They do not spend a lot of time thinking about why silver is in demand though.

Silver Jewelry

Of course, almost everybody realizes that silver is a precious metal that is used in jewelry. Silver jewelry is usually less expensive then gold jewelry because silver costs much less then gold. But silver jewelry still has status, and is not considered constume jewelry. And of course, silverware, is made from silver.

From High Tech to Dental Fillings

Dentists use silver in fillings, and silver is also used in photography. Some electrical and electronic products use silver for its superior conductivity, even when tarnished. Silver is also used to make solder solutions, electrical contacts, and high capacity batteries. Specialized mirrors which require superior reflectivity use silver as a backing, though normal mirrors use aluminum. Silver (upon some suitable support) is probably the only catalyst available today to convert ethylene to ethylene oxide (later hydrolyzed to ethylene glycol, used for making polyesters)—a very important industrial reaction.

Silver Money

Of course, silver has been used as money for thousands of years. Until 1964 many US coins were 90% silver, though today silver is only used in special commemerative or collector’s coins here.

Medicinal Uses Of Silver

And silver has had medical uses for thousands of years too. Hippocrates, the father of modern medicine, wrote of the healing properties of silver. And silver does have a toxic effect on some bacteria, algae, fungi, and viruses. In fact, silver was used successfully in WWI to treat infections before the invention of antibiotics.

Silver has medicinal uses, even today. Today, wound dressings containing silver are well established for clinical wound care and have recently been introduced in consumer products such as sticking plasters.

Silver is Not Just Shiny Stuff!

So silver does have industrial uses, and it actually does get used up in some processes. Many investors compare this to gold which is usually not consumed. In fact, some experts suspect that the majority of gold that has even been mined is still in use today. Well, that is if you consider sitting in a bank vault somewhere to be in use.

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Avoid Buying Fake Coins on EBay

First let me tell you that I buy on EBay all the time! I think it is one of the most convenient ways to look for good deals on silver and gold. I have purchased gold and silver coins, rounds, and bars. However, along with an increased bullion price, the incidents of fake bullion coins that are being reported has increased. What has also come out, is that some of the fake bullion was made so cleverly that the seller is not even aware that they are seling a fake.

#1 Tip To Avoid Getting Scammed on EBay — Use a Trusted Seller with lots of good feedback, and prefer sellers in your own country!

At the risk of being politically incorrect, I would say to avoid bullion sellers in Asia or Eastern Europe. These seems to be the root of many fake bullion coins, though of course, many legitimate Asian and Eastern European bullion dealers are out there. The problem is, when you do have a problem, it may be very hard to get your money back.

On the other hand, if you deal with a US or Canadian seller who has a clear return policy, they are much more likely to care about their business reputation, and they will want to keep their buyers happy, even if it means eating a loss on a returned coin. Look for sellers with high feedback ratings, and those who have been in business for awhile. Look for feedback near 100%. Every seller who has been in business for awhile, will risk getting a negative feedback or two. Even sellers who really go the extra mile, will have a buyer who would rather apply negative feedback then communicate. So if you find a seller with 100′s of positive feedback ratings, but one or two negative ratings, I would look into the reasons for the negative feedback.

Use the EBAY GUIDE TO FAKE COINS AND BULLION. EBay community members are probably your best source of information, and they have published many guides on signs to look for. Of course, one big sign, is a “BUY IT NOW” price that is too good to be true. If you think you have found a bargain from a stupid seller, you have very likely stumbled onto a fake precious metals scam!

Again, I have hundreds of satisfactory transactions on EBay, and I will continue to buy US silver coins, and other precious bullion in the form of coins, rounds or bars. But I will take the time to check out the seller’s previous transactions and educate myself on the many silver and gold scams out there!

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Can You Still Find US Silver Coins In Circulation?

It seems like the subject of searching bank rolls for silver coins comes up in every coin or silver related forum I frequent these days. While some people claim that, after so many years, the search is fruitless, others claim to make a nice haul. The deal is, people go to their local bank (or banks) and ask for rolls of half dollars. I’m not sure why half dollar rolls are more fruitful then rolls of dimes or quarters, but maybe it is because half dollars were minted from silver for a longer time. While most coins were no longer made out of silver after 1964, half dollars were minted from 40% silver from 1965 – 1970.

Now I have seen the comment made that the larger coin distributor (think Brinks) sort the coin rolls by date, and probably do their own culling of sillver money. A company like Brinks would tend to deliver to larger banks, probably in larger cities. However, people in rural areas or small towns where distribution is less automated, tend to be the ones who report a good haul when searching half dollar rolls for silver coins.

 One person, from a small town, did report searching about $2,000 worth of half dollar rolls and finding $1,000 in 90% and 40% silver halves! And of course, you can always take the clad halves back to the bank or spend them for purchases. I have seen other reports of less impressive hauls, and then of course, many people reported that they spent hours looking through hundreds of dollars worth of coins and finding no silver.

However, if you have some time on your hand, and a local bank with half dollar rolls, you could spend some time hunting. You may have to unroll and roll a lot of coins, before you find any silver, but when you do, I’ll bet it will feel like you struck gold silver!

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Is Nickel Ever Silver?

It may seem odd to think of a common nickel as being made out of silver. Most of us think that the face value of a 5 cent nickel would be too low to ever be made from a precious metal. Besides, the common name of a 5 cent piece implies the base metal that is is minted from.

However during WWII, the war effort needed the base metal more then they needed the precious one! So WWII nickels are made from .35 silver, as well as 56% copper, and 9% manganese! An easy way to identify them is to notice the large mint mark over the dome on the reverse.

Silver Melt Value of WWII Silver Nickels

Don’t get me wrong. I think that collectables like WWII silver nickels are interesting pieces of history, and I don’t just see every coin as a source of bullion. And if others didn’t think like me, we would probably not have any of these nickels left because they actually are a source of silver in US coins.

If you have $1 in WWII silver nickles, or 20 nickels, then the silver content is about 1.12 troy ounces. Note that is more then the silver value in a dollar’s worth of 90% silver, which would only be .715 troy ounces! At today’s price of about $17.30 an ounce, 20 silver WWII US 5 cent pieces would be worth about $19.47! So if you find some, please do not stick them in a gumball machine. Go here to estimate the silver bullion value of WWII nickels at the current price.

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Why Buy Precious Metals

In order to understand if precious metals like gold, silver, platinum, and palladium are good investments for you, you need to understand the reasons people buy them. For instance, if you want to grab a stack of silver in order to make a quick buck, you are more likely to get an ulcer then any profit. You can read the experts, become an expert charter, due your due diligence, and find that the past does not always predict the future. Nobody has a crystal ball.

And if you are considering a play in the precious metals (PM) market, first make sure you have other bases covered. In other words, just like any risky investment, do not sink the whole farm on a hot tip. Have that emergency fund in the back so you can pay your rent or mortgage, keep your utilities turned on, and put burgers and beans on the table for your children.

PM Investors Need Patience and Funds They Can Afford To Risk

In general, most conservative investors who have made a good profit with PMs were patient people who really use this type of investment as a way to preserve their wealth during inflationary times, rather then a source of speculative income. An ounce of silver may have cost $5 a few years ago, and costs $17 today. But if you look at the actual buying power of that dollar value of an ounce of silver, you may find that it is similar because of inflation. It may look like a huge 5 year increase, but the price of a gallon of gas at your local pump has also increased quite a bit.

Some people do make a lot of money by speculating, but many people lose money. The thing to keep in mind is that you really don’t lose money until you sell your silver or gold stash, and it is best to purchase with funds you can afford to do without for awhile.

And of course, it sounds obvious to say that you should buy low and sell high. However, this simple logic seems to go against human nature. We all tend to get caught up in the hype of a rising market and back away from a sinking one. So many investors tried to cash in on the optimistic bull market so they bought silver for over $20 an ounce a few weeks ago. Now, silver seems stuck around $17 an ounce and many are complaining that they lost thousands of dollars. I hope that these people can hold onto their PM because I do believe that the curve will swing back up again eventually. Note that I am not a qualified investment advisor, and I do say, “eventually”.

Now that silver seems stuck around $17, those same optimistic investors of a few weeks ago have lost their nerve. But how much better would it be to buy now (or to have bought 5 years ago at $5/ounce), and then wait for another upswing. Can the price of silver drop more? Sure it can. That’s why it is called a risky investment. That is why you should enter a market like this with money you can afford to play with, and of course, DYODD (Do Your Own Due Diligence).

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Just What is The Value Of Silver Coins?

Well most of your pocket change is pretty much worth whatever value is marked on it. A dime is just a dime. However, dimes minted in the US on or before 1964 were 90% silver. The same is true, of course, for quarters, half dollars, and of course, silver dollar coins! It was all minted to conform to a specific amount of silver per each dollar of face value. Every dollar in face value of US silver coins contains .715 of an ounce of silver.

If you are lucky enough to find a 1964 quarter in your pocket change, please do not drop it into the soda machine! As I write this post, silver is worth $17.31 an ounce. So each $1 worth of 90% silver coins is:

  .715 * $17.31 = $12.37

Divide that by 4, since you have a quarter, and your quarter’s silver bullion value is about $3! So right now, 90% silver US coins are worth about 12 times their face value. One dollar in silver coins is worth twelve dollars.

Now half dollars made from 1965 to 1970 still kept some silver. They were 40% until even that was phased out.  I remember when my dad would go through his pocket change to find 90% silver coins, and that was years after they are started minting those coins from base metals. It was a profitable and fun hobby. But these days, after over 40 years, pocket change has been searched for so long, it is pretty hard to find any silver coins. I have actually heard of people pulling a silver half out of a bank roll though, so it might be worth a scan.

What is important today about US silver coins is the fact that they still make a fairly affordable way to buy precious metals. You can look on online auctions like EBay, flea markets, antique stores, or coin shops and find US silver coins, which is sometimes called “junk silver.” Don’t be fooled by the word, junk, because it contains silver, which is a precious metal. They call it that because the coins are not in an uncirculated condition, and so they usually aren’t coveted by collectors for their nuministic value. But that is good news for you, because you will be accumulating silver without paying a premium for a collectable!

If you are shopping for silver, or see a good deal on EBay for a pile of 90% silver or 40% silver, we’d like to help you quickly estimate the value. Use our handy US silver coin value calculator. You can enter the dollar amount of the coins, the current silver price per ounce, and get a good estimate of the silver bullion value. You may expect to pay slightly more then the bullion value, but you may also find some great deals for less then the silver melt value. It is particularly important to be able to estimate the silver value quickly in a fast paced auction environment like EBay. The calculator works on 40% silver too.

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