Cheapest silver troy ounce ever

As discussed I got this, but not for the 4,10 € I was hoping, but still the other person didn’t go too high and the end price was 6,10 €.

It’s 26 grams so the ounce price is 7,80 €. That’s what it was in 2004. So I am still pretty skeptical if this is really silver and gold plated. Or how did this slip by everyone else.

It is not ferrous but could still be nickel. But to gold plate nickel? When silver is still relatively cheap? It doesn’t sound plausible but of waste of gold.

Seems suspicious

I don’t know why this seems suspicious, or does the person selling this not understand how markets work. Because the price of silver has come down for the past half a year, and then the person suddenly decides that it is time to sell. Only to realize that within the next six months we are likely to see prices rise again. But hey, maybe he bought it for $2 an ounce 15 years ago and is making huge gains.

That’s 1 kg or 2.2 lbs of coins but I am not going to buy that much because I don’t want to put all my wealth into just one asset. There are other assets and instruments in existence as well.

Detecting counterfeit coins

I slowly began to realize that buying the cheapest silver (right on the spot price) could have some problems such as higher likelyhood of buying counterfeit.

So I emailed the local coin dealer and asked them what methods do they use to make sure they are selling the real deal; obviously they haven’t answered yet; it is Christmas time, so I ended youtubing (yes, that is a thing) about the topic and found out that strong magnets can be used to detect counterfeits.

But the videos also showed that for example copper has almost exactly the same magnetic behavior as silver, so simple neodymium test alone could not be used, but weight and volume should also be checked.

But that is a lot of work and the coun dealer obviously wouldn’t be doing that or they would go out of business very fast.

So what else could they be doing?

I believe they use electronic devices to reference the coin’s magnetic properties against mint reference data. Because if you build a device that can accurately measure magnetism and how a coin changes the magnetism within the test apparatus, then it becomes impossible to replicate that magnetic field with anything but the real metal.

I probably won’t be building one but instead leave it to dealer if they give me this sort of answer. They obviously must do something along these lines. Acid or other chemical tests aren’t possible on valuable coins and there aren’t many other feasible methods to accurately distinquish fake coins from real coins.



Buying silver

For a long time I have looked into silver but because it isn’t tax free to sell it in Finland, the margins are huge.

Spot price is about $16 for Troy ounce, but cheapest Troy ounce worth of silver bullion sells for 26€ so the margin is over 60%! That’s a bad deal and very hard to justify the purchase. Unless you see the price of silver being hugely undervalued.

But I found pre-1965 United States dimes (.900 silver) selling for $16 an ounce of silver, so I made an offer to buy that lot for $15.50 an ounce. And because silver market isn’t very liquid, especially for “junk silver” like dimes, the person might just accept the offer. The loss for him against the current spot still wouldn’t be more than few percentages. (I should have offered him less :))

I would prefer gold because it is more liquid but gold ties a lot of wealth in it, which in itself produces very little value. Although, the price of gold, in my view, is relatively cheap right now, and I used to make big profits sitting on it for 18 months. But silver I use just to have some of my wealth in some non-liquid form for saving purposes. As it is very easy to spend cash money but spending silver is quite a bit trickier, and one will come up with other solutions before trying to sell something that is so difficult to liquidate.