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What's Future Hold for 5-Ouncer?
June 16, 2011

Convenience is one of the attributes of successful bullion coins.

When the Krugerrand was invented by South Africa in the late 1960s to contain precisely one troy ounce of gold, it eventually swept all before it even though I am sure there were people who huffed that the English sovereign that contained .2355 troy ounces was just fine. It was a widely recognized coin around the world and had been used since the early 19th century.

But to calculate what the coin was worth each day in terms of its metallic value was not handy in the age before widely available cheap calculators. The beginning of free-market trading in gold in London in 1968 meant that gold for nonofficial transactions fluctuated in price daily. Ease of calculation then mattered to average people.

Even though the official price of an ounce of gold was maintained by the United States at $35 a troy ounce for three more years, the writing was on the wall.

In the last few months we have seen the introduction of the new American 5-ounce silver bullion coin.

Will it prove to be convenient and thus pass a major market test?

Even though we have calculators today, having to multiply the price of an ounce of silver by 5 might be more than many individuals will want to do.

Then there is the size and weight. It’s a big coin. Its actually far easier to heft and hold a 20-coin tube of one-ounce coins than four 5-ounce coins.

Put in a slab, the 5-ounce coin becomes 5.5 inches by 7.125 inches. That’s big.

Big doesn’t necessarily mean inconvenient, but it appears to me the same factor that makes people shy away from the half dollar or dollar coins in favor of the quarter might also be a factor in the bullion coin market.

That would mean the 5-ounce coin doesn’t have a bright future with the investors who dominate the bullion coin market.

What do you think?



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About the Author
David C. Harper has been a coin collector since 1963. He joined the Krause Publications editorial staff in 1978 and is currently editor of Numismatic News, Bank Note Reporter and World Coin News. He also edits two books annually, North American Coins & Prices and Coin Digest. He is the author of the Class of '63 column that runs each week in Numismatic News. His first bylined numismatic article appeared in the June 1971 issue of Coins Magazine and his various Krause Publications assignments included a stint as editor of the magazine 1980-1983. Harper received a bachelor of science degree from the University of Wisconsin-Oshkosh in 1977. He had a double major of journalism and economics.

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