Dear Mr. Berko: I’m interested in an advertisement by the U.S. Mint offering silver Krugerrands for $79.95. This is the first silver Krugerrand ever minted by the South African Mint for the U.S. Mint. Because it’s the first, do you think this will have value for collectors? And could you explain to me why a troy ounce of silver weighs more than a regular ounce of silver? — CP, Joilet, Ill.
Dear CP: As you said, a troy ounce, which is a unit of measure for weighing precious metals, is heavier than an avoirdupois ounce. But a troy pound is lighter than an avoirdupois pound. Confusing? Troy weight has been used for hundreds of years, named after Troyes, France, which is about 100 miles southeast of Paris. Troyes is a town of 60,000 people, with narrow cobblestone streets, colorful half-timbered homes and magnificent Gothic churches and cathedrals with striking stained-glass windows. Here’s how it buries.
Troy weight and avoirdupois weight have the same base unit, the grain. A troy ounce is 480 grains, or 31.1 grams, compared with the avoirdupois ounce, which is 437 grains, or 28.35 grams. The difference isn’t much, but things change when measuring large quantities of precious metals. That’s because there are only 12 troy ounces to a troy pound, whereas there are 16 avoirdupois ounces to an avoirdupois pound. Therefore, the troy pound is 5,760 grains, and the avoirdupois pound is 7,000 grains. That’s how an avoirdupois pound is heavier than a troy pound but a troy ounce is heavier than an avoirdupois ounce. And I thought calculus was tough!
Now, the U.S. Mint has nothing to do with the misleading advertisement you sent me from your paper. Frankly, some of our newspapers should do a better job of editing and policing the too-clever adverts that so easily fool the reader about costs and claims. Be mindful that truth requires facts but honesty requires full disclosure.
The ad you saw was from GovMint.com, which has no relation to our federal government. It will sell these 2017 silver Krugerrands to you all day at their regular price of $99.95, not including the $12 cost for shipping and handling. Now it has a special deal — the one you saw. The coins are now $79.95 each, plus $12 shipping and handling. But if you buy 20 of these Rands, GovMint.com will give them to you for $49.95 each. That’s a savings of $1,000 from the usual offer. Well then, zip-a-dee-doo-dah.
If you zip around Google after searching for “South African silver Krugerrands,” you’ll find that JM Bullion, Apmex and other dealers will sell those Rands to you for $47.49, plus shipping and handling, all day and all night, Marianne. Meanwhile, dealers purchase them from the South African Mint for about $27 plus two books of green stamps.
GovMint.com, by the way, is home-ported in Burnsville, Minnesota. And the price of silver, 55 cents a gram, should tell you that the silver content value of the Krugerrand, at 31.1 grams, is $17.10.
This Krugerrand, a beautiful coin, was issued last year to mark the 50th anniversary of the Rand, which was first issued in 1967. It’s a neat coin to own, but you’d never sell this coin for the $90-plus it would cost you. For you to break even, silver would have to trade at $82 an ounce, and I doubt that will happen in this century. And if you were to decide to sell this coin to a dealer, I suspect he’d give you its silver value minus its melting cost. The official original number was 500,000 silver Rands, but the South African Mint soon pushed the mintage up to 1 million. For collectors, there’s zero value to this coin unless it’s one of the 15,000 first-strike coins that were minted last year.
Please address your financial questions to Malcolm Berko, P.O. Box 8303, Largo, FL 33775, or email him at email@example.com. To find out more about Malcolm Berko and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com.
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