I've been interested in purchasing 90% junk silver on ebay (dated pre-1965) based on advice since I like to collect war coins and invest in silver. How has this worked out for people on this forum? The cheapest I saw on ebay were $24.95 for 1/2 ounce and that sounds high for the current silver price-given it's 90% silver.
$25 for a half-ounce is ridiculous. Those lots are invariably avoirdupois ounces, which is a bit more than 9/10 of a troy ounce, the unit in which silver prices are quoted. And since US silver coins are 90% silver, it means that you end up getting around .4 ounces of silver. At current prices, that's about $16.50 worth. You can get coins right around actual melt value on eBay. If you're patient, you can do much better than that. When 90% silver was still going for 34-35x face, I landed several small lots or single items at 20-25x face, including shipping.
That's what I thought, too. I'm glad I asked you guys first. Unfortunately, that's the cheapest I saw for junk silver on ebay. I'll run into the local coin shop this Friday and see what they have in stock.
If you click on the tab "classifieds" in the blue menu bar above, you will see a respected member of the forum selling 90% @ melt. The ad is a little dated, but being a shop, they probably have a continuing flow. Jim
Thank you desertgem. After reading your recommendation, I saw that posting and a few others. Once I accumulate enough dough, I'll purchase some coins. "At melt"...does that mean the current price of silver? I see that term thrown around a lot.
"At melt" means spot price X .900 X weight of the (pre-1965) silver coins (which officially is .7752 ounce/dollar face value, or conversely, $1.29 face value = 1 ounce of silver). However, there are sometimes variations in that formula. The way I would figure it is like this: (Face value / $1.29) X spot price So, if I had $12.90 face value in pre-1965 US silver coins, it would be 10 ounces net silver. Multiply that by the spot price to get the melt price. According to Kitco, it would be approximately $411 as of this writing (10 ounces X $41.10 spot price)
Just remember, there can be variations in that formula. I have seen some people calculate the silver weight as low as .715 ounce/dollar to account for loss of silver due to wear (especially if you are selling).
It might be easier to buy based on weight. But US junk silver is usually bought and sold in the US based on the face value.
If you are going to buy small amounts, I would hold off until you can get to a local coin show. It's very common to find small ziplock bags of junk silver coins for sell for decent prices. Before you go, do some calculations against current pricing to get an idea of how many times face value you should pay. Dimes, Quarters and 1/2s are all proportional so you will have the same basic multiplier for each. Mixed bags will cost a little less than the sorted ones. Don't forget to look for cleaned and/or very common Morgans, though I have noticed that lately bowls of these are not as common at the shows. Otherwise if you are going to deal in weight, it's best to deal in grams (so know this conversion). The absolute best pricing you will get for junk silver, is to buy an entire bag, 1000 oz, but this does mean dropping a considerable amount of money. Anything less than this and you are paying someone to split the bag and repackage it.
To find reasonably current "melt value", you can use http://www.coinflation.com/. It lists the current value of the silver in each major silver coin type. You'll see that, as fatima said, dimes, quarters and halves all have the same multiplier, but the multiplier for dollars is somewhat higher. In other words, you'd get the same silver value out of ten silver dimes, four silver quarters, or two silver halves -- but slightly more out of one silver dollar. Coinflation also lists values for "war nickels", which are 35% silver, as well as 40% silver halves and dollars. These reported values are higher than the coins' actual market value, though, because refiners pay lower prices for them (reflecting higher refining costs). Heavily worn coins do lose weight, and thus silver content. This is more pronounced with smaller coins; heavily worn dimes can lose more than 10% of their weight, while halves tend to lose less. There are other threads here addressing wear and weight loss. As Collector1966 said, though, coins are usually traded based on face value regardless of wear.
There are many benefits to having access to a local coin shop. One of the biggest is the fact that most dealers will let you "cherry pick" (or pick which coins you want out of a large bag of junk silver). This allows you to pick the coins in the best condition, resulting obviously in more silver for the same price. Another advantage is that most dealers will allow you to buy any quantity that you want. At my local dealer I can buy a single dime at a time.
One other place to find them are Antique malls/shops. Check the value at coinflation, then go visit the malls. Alot of the vendors do not raise their prices so if they put them in there 6 mos ago you may find yourself some good deals. About 3 weeks ago I picked up $21 face for 440, got home and last week sold it for 32X face
That's right, I forgot about the difference in weight between the Morgan/Peace dollars and the equivalent face value in lower-denomination silver coins-- 26.73 X .9 grams versus 25 X .9 grams.
