How to Calculate Value of Gold or Silver in a Coin
If you are looking for a calculator to determine how much the silver content of your coins is worth, click here.
With the recent anniversary of September 11th, I like many others found myself reliving in my mind where I was on that day. The old anger quickly bubbling back to the surface as I thought about the horror of that day and all those people whose lives were cut short.
So you can probably imagine the uncomfortable feeling I got when the ad came on for National Collector’s Mint’s new "2001-2006 World Trade Center Gold and Silver Clad Commemorative" medallion. This medallion has the WTC buildings that can pop up from the medallion and . . . I’m sure that they didn’t think about this . . . the buildings also can be knocked down. But, regardless of how distasteful I find this medallion to be (that’s a whole topic in itself), it got me to wondering about a part of their advertising.
According to their advertising, the medallion is clad in “24 KT gold” and ".999 Pure Silver!" The advertising leads one to believe that the gold and silver make this item more desirable. So how much is the gold and silver in the medallion worth? Or for that matter, how much is the gold and silver in any of our coins worth?
So I thought I would do a write-up to help everyone understand just how to determine the answers to these questions. There are two things that you need to determine this: weight and fineness.
If you just want to know how much gold and silver are in the National Collector's Mint medallion, jump to the subheading near the end of the article on page 2. If you really want to know how to calculate the value yourself, read on.
Fineness: What is a Karat?
Let’s start with fineness. Fineness is the measurement of the purity of the metal. One method of describing the fineness of gold is the karat (kt). This is the measurement of the proportion of gold in an alloy equal to 1/24 part of pure gold. For example, 12kt gold is 12/24 part of pure gold or 50% pure gold, 22kt gold is 11/12 part of pure gold or 91.7% pure gold, and 24kt is 100% pure gold (as in the new gold Buffalo bullion coin).
But fineness can also be stated as parts per thousand or 1/1000. For example, you can see $20 double eagles in the 2007 Redbook listed as ".900 fine" which is equal to 90% pure gold. In the case of territorial or private gold, you will sometimes see "887 thous." or "900 thous." on the coin itself.
So, to bring the two methods together, 22kt gold is the same as being .917 fine or 91.7% pure gold. This is step one to determining the value.
Weight in Ounces: Troy vs Avoirdupois
Step 2 is to determine the weight of the metal in the coin. This is a little trickier to understand. There are two different methods of weights used depending on whether it’s a precious metal or a base metal. Precious metals (i.e. gold, silver, platinum) use Troy Weights where base metals (i.e. copper, nickel, etc) use Avoirdupois Weights, abbreviated avdp. Nickel can be a little trickier because in the early days of the mint, it was considered a precious metal and used the Troy system. Today nickel is considered a base metal and uses the Avoirdupois system.
A Grain is a Grain No Matter How You Slice It
The most important thing to keep in mind is that regardless of which method of weights is being used, the one measurement that is equal in both systems is the grain, abbreviated gr. (i.e. 1 troy grain = 1 avdp. grain) When looking at the daily spot prices of metals, you will find the precious metals quoted in troy ounces and the base metals per avdp. pound. So what you need to know is how many grains make up each of those units.
For troy weights, 1 pound (lb) = 12 ounces (oz) = 240 pennyweight (dwt) = 5760 grains (gr)
For avdp weights, 1 pound (lb) = 16 ounces (oz) = 256 drams (dr) = 7000 grains (gr)