What is Junk Silver and Why You Should Buy Some
Some of you may not have heard of so-called Junk Silver but believe me; it is not junk!
“Junk” silver usually refers to US silver coins minted before 1965; dimes, quarters, half dollars, and silver dollars before 1965 were made of 90% silver. Copper was added for strength and longevity.
Precious metals are measured in ounces but not based on the 16-ounce per pound system. By custom, metal weights are presented in troy ounces. One troy ounce (oz troy) equals precisely 31.1034768 grams. The US coinage act of 1828 adopted the troy ounce as the official weight standard by which coins would be weighed.
“Junk Silver” is not sold in terms of ounces of silver but rather by the face value of the coins sold. For example, if you bought a dollar's worth of coins (face value), say 5 dimes and two quarters, you have a face value of $1. The total weight of a dollar's worth of coins (face value) is 25 grams. So in a half dollar, you would have 12.5 grams and 6.25 grams in a quarter, and 2.5 grams in a dime. 25 grams (total weight) X 0.90 = 22.5 grams. In terms of troy ounces, 22.5 grams is the equivalent of 0.7234 troy ounces.
However, it is typical that coin dealers have adopted a weight of 0.715 troy ounces for a 1 dollar face value instead of 0.723 oz troy because wear on the coins shrinks the weight due to circulation. Therefore it is customary and accepted to assume that a $1000 face-value bag of coins will contain 715 ounces troy.
How to Calculate the Amount of Silver in a Bag of “Junk” Silver
For example, if you decided to purchase a $50 face value of dimes, you would purchase 500 dimes and approximate the silver content at 71.5% of the total weight in ounces of troy. Recalling from above that $1 in face value is 0.715 ounces of silver, we can multiply the face value of the bag in question times 0.715. In our case 50 X 0.715 = 35.75 ounces of silver. Next, we need the current price of silver, including the premium being charged.
If we are just looking for a ballpark value for the price of the $50 bag, we can start with the spot price of silver at the time in question. As of this writing, the spot price of silver stands at $18.60 per oz troy. Therefore $35.75 x $18.60 = $664.95. But – “Junk” Silver has its own always-changing premium, which follows the premium of 99% fine silver but can be higher or lower.
For this example, I found the premium from one of my go-to silver sellers based on a $1000 face-value bag. They are currently charging $23,330 for a $1000 face-value bag of coins. That is $23.33 per face value dollar. For $50, that would be $1166.50 or 74% higher than the spot price.
So it is essential to use the chart to estimate your costs when purchasing “junk” silver.
Why Buy Junk Silver
“Junk” silver is one of the safest and most valuable forms of silver. It is immediately recognized as US-accepted coins, and the denominations are understood by everyone. Since junk silver coins are far more valuable than paper money in the same denominations above a dollar, they are valuable even when carrying around a small handful of coins. So they are convenient, change can be made, and they hold their buying power.
During a time of steep inflation, paper money will devalue by the hour; these coins will retain purchasing power and increase value in dollars, offsetting the inflation.
Junk coins are not as susceptible to theft as large one-ounce coins and can be mistaken as another valueless coin created after 1964.
Where To Buy Junk Silver
Billions of coins were created using silver before 1965, but they are not seen much anymore in transactions because banks and other receivers of coins as payments filter through the coins seeking the silver coins. Further, many individuals know the value of silver coins and pull them out of their spending money to save and collect the coins.
Further, “junk” silver is more straightforward to hide and store than the larger coins.
But these coins find their way to bullion retailers and local coin shops as people bring them in to exchange for paper money. So you can find these coins at bullion dealers on the Internet or, better yet, visit your local coin shop to get to know the owner and staff, ask about their supply, and even get on their notification system. Get notified when the new inventory of “junk” has arrived.
With the above knowledge, you don't have to be intimidated by prices or what “junk” coins are all about. Just walk in with a target face value in mind, and calculate an expected price by searching for “junk” silver prices online before you go in. You can then do the calculation as above, and you will know what price to expect.
Buy “junk” silver regularly. I highly recommend it!