An ounce of advantage

Back in the 1970s, the Krugerrand grabbed the attention of gold buyers by claiming it was the best way to own gold.

Buyers leaped at the chance to buy a coin that was a convenient one troy ounce in gold weight. Whatever the headline price of gold is, that’s the metallic value of the coin, because market prices are quoted in troy ounces.

This convenience was and still is critical to the success of bullion coins.

That’s why the size it was copied by other major world mints, such as the Royal Canadian Mint, U.S. Mint and Austrian Mint. They all created their own one-ounce bullion coins.

For many years, my firm has provided gold and silver value charts to list the value of the metal content of various coins that are not even troy weights at various prices of bullion.

This isn’t quite as handy as buying one-ounce coins, but it is not bad.

The importance of convenience recently was emphasized in my own mind when a middle-aged fellow approached me at the Numismatists of Wisconsin show held in May in Iola.

He wanted to load his computer with value information for standard U.S. silver coins struck before 1965.

I told him the easiest way was to figure that $1 face value in these dimes, quarters or half dollars equaled a silver content of 0.715 troy ounces (coins are a tad heavier when coming off the press, but for many years coin dealers have used this figure to account for the average wear on the coins).

You take this number and multiply it by the day’s silver price.

For example, silver as I write this is $18.87 per ounce. Multiply that figure by .715 and you get $13.49 in silver value for $1 face value of these coins.

Well, what would it be for the half dollar, he asked?

I said it would be half the amount.

He looked blank.

Well, what would it be for the dime?

I replied it would be a tenth of the amount.

He looked blank.

Well, what’s the quarter?

I said it would be a quarter of the amount.

He looked blank.

He had a pad of paper and a pen in his hand and he had started writing as the conversation commenced, but he just could not pick up on the math.

One-ounce coins?

You’d better believe they have the advantage in the market.