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How Many Gold Coins Are Melted?

 
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Author Previous TopicReplies: 14 / Views: 516Next Topic  
Valued Member

Italy
299 Posts
 Posted 05/17/2022  5:37 pm Show Profile   Bookmark this topic Add Roma2021 to your friends list Get a Link to this Message
Hello,

A gold dealer where I usually buy bullion grade coins from had this sovereign recently. I passed because the price was too far above spot. The coin went to the refinery.

I asked this question on another thread about Morgans and Peace dollars and the conclusion was that NONE of those are melted... So ... I will ask about gold here... How many gold coins with some numismatic interest do you think are melted?

Curious...

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United States
521 Posts
 Posted 05/17/2022  6:46 pm  Show Profile   Bookmark this reply Add halfamind to your friends list Get a Link to this Reply
Well, on the point of Morgan dollars, more than 270 million were melted due to the passage of the 1918 Pittman Act.
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 Posted 05/17/2022  8:11 pm  Show Profile   Bookmark this reply Add Earle42 to your friends list Get a Link to this Reply
Too many. A few years ago a huge hoard of Canadian gold coins from the teens were found and I was horrified to hear a LOT of them were melted.
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 Posted 05/17/2022  8:12 pm  Show Profile   Bookmark this reply Add thq to your friends list Get a Link to this Reply
If ever a coin deserved to get melted....



It looks like a ground find that got hit with a shovel. I got it for a little over melt. At this point there are less than 100 1859-S half eagles in existence. 99% of them did get melted at some point. This happened long before there was any numismatic interest. Low grade gold coins were never collected because of their high intrinsic value. Rarity didn't start to pique collector interest until the mintage was under 10,000.
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Edited by thq
05/17/2022 8:22 pm
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Australia
19691 Posts
 Posted 05/18/2022  12:52 am  Show Profile   Bookmark this reply Add sel_69l to your friends list Get a Link to this Reply
All governments around the World that have bullion reserves of Sovereigns have long since melted the poorer condition coins. Swiss banks led the way in this regard, but so did the Bank of England.
Thus, with a gold coin such as a sovereign, it it difficult to find them in lower grades below VF (British grading).
Along with bars, Sovereigns were used for bullion storage by governments and banks.

Not so with Half sovereigns.
In Australia, British Half Sovereigns were a circulating coin from about 1835 until about 1855. As such, British Half Sovereigns dated 1835-1855 should be considered as just a much part of early Australian coin Heritage as the proclamation coinage of Governor Gidley King. Coins of this date range in Australia are commonly found in lower grades. Same applies for Australian minted Half Sovereigns dated 1855 to about 1900, because they saw extensive circulation and not used for bullion reserve. After 1900, they were gradually replaced with silver coin banknotes

The Half Sovereign was withdrawn from circulation in Australia in 1914. Thus, it is much harder to find both British and Australian minted Half sovereigns in top grades, compared to Sovereigns, except for later dates 1900-1915.

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United States
94 Posts
 Posted 05/18/2022  01:15 am  Show Profile   Bookmark this reply Add glenmorenee to your friends list Get a Link to this Reply
A YouTuber pointed out that in some states that have a sales tax on gold and silver, there is a lot of melting of generic type gold coins. This is because no one is willing to pay spot plus a premium and in the case of Ohio, another 7% in sales tax. So the dealer sends stuff to be melted all the time.
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 Posted 05/18/2022  01:56 am  Show Profile   Check westcoin's eBay Listings Bookmark this reply Add westcoin to your friends list Get a Link to this Reply
You can see the numbers in Secretary of the Treasury Annual Report, this page is from 1891, I would imagine other countries have reports that are published similar to the USA.



This book is available to see for free at the Newman Numismatic Portal. They have other years as well, I just grabbed this one as an example.
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 Posted 05/18/2022  02:19 am  Show Profile   Check westcoin's eBay Listings Bookmark this reply Add westcoin to your friends list Get a Link to this Reply
One more double page showing "uncurrent" mutilated coins turned in and melted:
Annual Report of the Director of the Mint for the Fiscal Year Ended June 30, 1917



It is a fact for many years coin dealers often were called on to come and pick out numismatically desirable coins from the mint's melting pot before they were actually melted. Many rarities (especially pioneer gold, medalions, and proof coins were spared this way).
"Buy the Book Before You Buy the Coin" - Aaron R. Feldman - "And read it" - Me 2013!
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Edited by westcoin
05/18/2022 02:22 am
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Australia
14367 Posts
 Posted 05/18/2022  03:43 am  Show Profile   Bookmark this reply Add Sap to your friends list Get a Link to this Reply
Almost no American gold coins are melted now, because everybody dealing with gold knows that pre-1933 US gold coins are always worth considerably above melt value. But this is only because (a) so many were officially and unofficially melted down in the past, and (b) there are more collectors of US gold coins than there are collectors of, say, sovereigns. Low supply, with high demand, creates a numismatic premium that's worth a considerable fraction, or even a multiple, of the bullion value. Here in Australia lately, you'll rarely find a US gold coin sell for less than 150% of bullion value, no matter what condition it's in.

By comparison, relatively few sovereigns were melted, and very few people are searching for specific dates of sovereigns, or trying to complete a "date set". So supply is still high, while demand is low. Thus, they have a much smaller numismatic premium, and thus are much more likely to wind up in a melting pot.

As a general rule, the melters themselves know little and care less about the potential numismatic value of the things they destroy. To them, gold is gold - it's fungible, and therefore all equally furnaceable. So the coin collectors of tomrrow are relying on the people today who sell gold coins to scrappers, to fish out the "good coins" and sell them to other collectors, not the scrappers.

Quote:
You can see the numbers in Secretary of the Treasury Annual Report, this page is from 1891, I would imagine other countries have reports that are published similar to the USA.

We do, generally, and most especially for gold coins. The main problem with using these reports to judge survival rates, as noted in several earlier discussion threads on survival rates and as can be seen in the image that westcoin posted: while intricately detailed records of the total counts of each denomination officially destroyed are kept by the Mint, there is no breakdown of which dates were melted. Nor, of course, are there any records at all of unoffical (private) melting, nor the melt rates of coins exported out of the country - other countries mints might keep records of "foreign coins melted", but probably won't record even a breakdown of country of origin and denomination, let alone a date. To foreign mints, US coins were just scrap bullion, fungible pieces of gold, good for nothing but melting and turning into real coins.
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Valued Member
Italy
299 Posts
 Posted 05/18/2022  3:19 pm  Show Profile   Bookmark this reply Add Roma2021 to your friends list Get a Link to this Reply
Thank you all for your replies.

As an American living in Italy I have a few observations.

1) there are a lot of u.s. coin collectors here. I am pleased by this because it means I can find Morgans, Peace dollars etc. They are also comparatively easy to sell and carry a premium over say a 19th century french 5 franc.

2) sovereigns are the default bullion for fractional gold. Krugs for full ounce, but sovereigns are traded with no real premium.

3) coins are polished!!! I have posted a few examples on other threads, but they LOVE to polish coins here.

New Member
Canada
26 Posts
 Posted 05/18/2022  3:38 pm  Show Profile   Bookmark this reply Add Beaver22 to your friends list Get a Link to this Reply
At least millions were melted, if not billions. Very unfortunate.
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 Posted 05/18/2022  3:50 pm  Show Profile   Bookmark this reply Add NumisEd to your friends list Get a Link to this Reply
Sovereigns (and 20 Franc coins) are good for stacking fractional bullion.
Valued Member
Italy
299 Posts
 Posted 05/18/2022  4:17 pm  Show Profile   Bookmark this reply Add Roma2021 to your friends list Get a Link to this Reply
@numis, some of the sources I watch/read report lower prices from U.S. LCSs and dealers on foreign gold. If you have sold, has this been your experience?
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 Posted 05/18/2022  4:29 pm  Show Profile   Check Collects82's eBay Listings Bookmark this reply Add Collects82 to your friends list Get a Link to this Reply

Quote:
You can see the numbers in Secretary of the Treasury Annual Report, this page is from 1891, I would imagine other countries have reports that are published similar to the USA.


I am fascinated that they kept accounting all the way through to print for eight 20cent and 2 3cent
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Edited by Collects82
05/18/2022 4:29 pm
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United States
2509 Posts
 Posted 05/22/2022  5:56 pm  Show Profile   Bookmark this reply Add Arkie to your friends list Get a Link to this Reply
Definitely foreign gold costs less from US LCS and bullion dealers.

I have been hearing of an increase in Mexican gold premia in the US, but do not know for certain. It was once a consistent source of gold near melt.
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