# SilverGoldPill.com

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April 11th, 2020

To understand how to calculate the premium of your precious metals, we first have to understand several terms.

Spot: The current price for one troy ounce. This is referred to as the spot price.

Troy Ounce: 31.1 grams make a troy ounce.

Coins Weight: The weight of your particular coin in troy ounces, decimal form. For example, 1 troy ounce is 1.0, a half ounce coin is 0.5, and a quarter ounce is 0.25, etc.

Premium: The dollar amount you paid for your coin over the spot value of the coin, represented in a percentage.

## Here is the formula in an image: 1. Take the purchase price of the coin and divide it by the decimal number of weight in troy ounces
2. take the remainder from step 1 and subtract the current spot price of an ounce.
3. take the remainder from step 2 and divide it by the current spot price
4. convert the decimal number from step 3 to a percent.

An example using a half ounce gold coin priced at \$924.67 with a spot price of \$1697.40:

1. 924.67 divided by 0.5
2. 1849.34 subtract 1697.40
3. equals 0.0895
4. which is 8.95% premium over spot for a half ounce gold coin. Let's take the French 20 Franc Rooster, it has a gross weight of 6.45 grams; with a purity of 90%. It costed me \$338 USD.

First, let's calculate the gold content:

6.45 divided by 31.1 = 0.207 troy ounces

with a purity of 90%; 0.207 x 0.9 = 0.187 ounces of pure gold or 5.8 grams of pure gold.

Now let's continue with the above formula:

1. 338 divided by 0.187 = 1807.48
2. 1807.48 - 1697(spot) = 110
3. 110 divided by 1697(spot) = 0.064
4. which is 6.4% premium over spot for 5.8 grams of pure gold.

The above purchase was fair. Anything under 7.5% premium for retail gold is reasonable.