Bullion value refers to how much a solid form of something like gold or silver is worth based on its precious metal content. With coins in particular, it’s not uncommon for other base metals to be used. Even bullion in other forms isn’t entirely pure because of a need to enhance certain physical characteristics of the metal. The precious metals experts from First National Bullion, the silver and gold dealers Scottsdale collectors trust for high-quality service and industry knowledge, explain what you need to know about calculating bullion value and why it can be beneficial to know how to do this.
Convert Grams to Troy Ounces
Bullion typically has marks that give you some basic information about weight and purity. It’s common for the actual weight to be expressed in grams. However, bullion value is expressed in troy ounces, an older method for weighing precious metals dating back to the Middle Ages.
There are places in the world where the troy ounce is used to express weight for precious metals, but it’s common for pounds and grams to be used in the United States. Start by converting grams to troy ounces. A troy ounce is equal to 31.1035 grams. This means you divide the actual weight (in grams) of a bar or coin by this figure. You’ll then have the weight of your bullion in troy ounces.
Get the Purity Net Weight
Next, determine the pure amount of the precious metal in your bullion. Do this by multiplying the weight in troy ounces you calculated in the first step by the fineness percentage as a decimal. This varies based on the particular precious metal you’re working with. For sterling silver, the fineness is 925—meaning 92.5 percent silver and 7.5 percent other metals.
Find Out the Spot Price
Finally, get the bullion value by multiplying the number of troy ounces by the spot price of your particular precious metal. “Spot price” refers to the current market value, which is why this figure is always changing. There are many reliable online sources, such as Moneymetals.com, that can be used to check the most current spot price for your bullion.
Be a More Informed Bullion Buyer
Bullion value comes in handy when you’re making purchases, since it gives you a better idea of how to evaluate the asking price. You can then determine what kind of markup likely applies to a purchase you’re considering. There are other factors that go into determining prices for bullion, but it never hurts to be a more informed buyer. If you’re the one doing the selling, you’ll also know with greater certainty what a fair asking price is as you reach out to different buyers or entertain offers.
Understand Bullion vs. Numismatic Value
If one of the ways you like to buy bullion is to purchase older coins, knowing their bullion value helps you make a better comparison to their numismatic value. This refers to the price that’s anticipated based on factors such as rarity, condition, and demand. With silver coins made prior to the mid-1960s, numismatic value often exceeds bullion value. However, higher mintage coins that are well circulated may have a lower numismatic value than bullion value.
For information on any aspect of buying, selling, and owning precious metals, call on the experts at First National Bullion and Coin. When they’re looking for accurate information about the markets for precious metals such as gold and silver bullion, Scottsdale collectors trust our reputable dealers. We’re a boutique precious metals firm with experienced professionals, and we work hard to keep our investors informed with the most up-to-date market news. If you’re looking to add precious metals to your portfolio, call us today at (480) 546-5089.
The statements made in this blog are opinions, and past performance is not indicative of future returns. Precious metals, like all investments, carry risk. Precious metals and coins may appreciate, depreciate, or stay the same in cash value depending on a variety of factors. First National Bullion does not guarantee, and its website and employees make no representation, that any metals for sale will appreciate sufficiently to earn the customers a profit. The decision to buy, sell, or borrow precious metals and which precious metals to purchase, borrow, or sell are made at the customer’s sole discretion.