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 Replies: 12 / Views: 1,549 |
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Pillar of the Community
United States
751 Posts |
Well, silver is on the move again and that's going to raise the prices for all our silver coinage...or is it?
At $14.59, a dime melts for $1.05, a quarter for $2.64, and a half for $5.28. The premium for common date low-circ (let's say AG-VG) coinage over melt has all but disappeared. In fact, it's not uncommon to see transactions for F-VF quarters, Walkers, and Franklins to be at melt.
Let's say silver rises another two bucks. At $16.59 per troy oz., silver coinage melts at 12x face, so a dime melts for $1.20, a quarter for $3, and a half for $6!
Are shoppers going to re-adjust their thinking and pay this much for common coins? Or will they pay a few cents more (if necessary) and restrict their buying to EF-AU specimens? If this happens, what will happen to all the VG Franklins you might want to move when demand has completely "melted down"?
One possibility is that they'll go into $1000 face bags and trade at melt +/- 5% among investors. That way, they'll still be around if demand for the coins ever exceeds demand for their precious metal content alone.
Another possibility is that they'll follow many of their kind to the smelter where they'll be lost to the hobby forever.
A third possibility is that consumers will re-adjust their thinking and begin spending $6, $7, or $8 for common low-circ Walkers and Franklins. Thereby saving these coins for the hobby and posterity.
If silver continues to rise, what will you do? How will your purchasing decisions change? Will you look to trim your holdings of these coins? Or will you buy investor lots, hoping to cherry pick the occasional semi-key or nicer example and save the rest as an investment in "hard currency"?
Or will you willingly turn your collection into silver bars?
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Pillar of the Community
United States
4867 Posts |
Silver is definately on the increase right now. But I think melting of coins have been banned for now?
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Pillar of the Community
 United States
751 Posts |
No, just base metal coins--cents (melt 88% above face) and nickels (melt 56% above face).
Edited by texasmick
02/24/2007 11:15 am
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Pillar of the Community
United States
651 Posts |
Great topic texasmick!
The pesimistic view would probably lean towards new collectors with small budgets trying to fill albums or type sets finding themselves looking at small $$ spreads between grades. This may move low grade collector habits towards VF/XF coins for pre-40, XF/AU for pre-50, & AU/BU coins for pre-64. Meanwhile, the AG to F coins are probably headed to that old silver mine in the sky.
I know common date merc dimes from the 40s can still be had for $3 to $4 in BU and if an AG or G grade is going for more than a $1 then justification to move up to an XF or AU is highly likely.
The question then becomes one of supply and demand. This may put pressure on the remaining supplies of common date coins in XF or higher conditions if there is a large collector base already existing at the lower grade end of the hobby. This will influence demand which will drive up prices and return a balance to the price spread between G to XF.
If there are not enough collectors at the low end to influence higher graded coins then the smelting factor will come into play. If this does come to pass, I truly hope only common date coins get melted as I'd hate to see any tough date coin meet its end in a smelter.
Through all of this if silver continues to rise then my buying habits shouldn't change. My opinion is that the largest impact on silver coins will probably be with 20th Century issues and luckily I'm done collecting 20th century coins and I'm working on 19th century issues.
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Bedrock of the Community
United States
20753 Posts |
I notice so many people now say you can't melt coins because that is illigal. Please note. So is murder, robbery, rape, theft, arson, counterfeiting, etc., etc., etc.
If you live in the right place and know the right people you can get anything melted down from a penny to a car. There are jewlers that melt down just about anything where a profit is to be made. Regardless of the price of Silver, Gold, Platinum, etc. the amount of money that metal will bring is almost always larger in the form of a ring, necklass, bracelet, watch and on and on and on. There are people that actually take the gold from dead peoples teeth for selling so what ever makes anyone think that coins will not be melted down just because there is a law against that. They could pass a thousand laws against something and it still gets done if there is a profit to be made.
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Pillar of the Community
United States
834 Posts |
You can still melt silver, only the cent and nickel you can't and that is wrong, it's your money you should be able to do with it what you wont.
Bruce.
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Valued Member
United States
455 Posts |
Has anyone read what's driving the demand for silver? How high did it go back in the 70s when the Hunts were manipulating the market?
I won't change my collecting habits due to the rising prices. I've got around $200 in "junk silver," mostly well worn dimes and quarters, I don't see myself selling it.
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Pillar of the Community
United States
882 Posts |
This is a really good point. I have lots of worn silver coins but I think they will always stay in the collection. Need something to weigh that safe down. Oh yeah, I got the wheat pennys for that. Melting AG-G coins into bars isn't really a bad idea...
Ty
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Pillar of the Community
United States
2269 Posts |
I personally could not bring myself to taking coins to a smelter. No matter how worn a coin is, there is always going to be someone who will enjoy it. I am a firm believer, in saving coins for tomorrow's generation. What is junk for me, could become part of someone's collection.
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Pillar of the Community
United States
834 Posts |
The Hunt brothers got it up to almost $50.00 those were the days my friend.
Bruce.
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Rest in Peace
United States
3730 Posts |
In a way I'm surprised the price of silver is rising.
Photography is leaving the film era (where silver is needed), and entering the digital era.
I agree with Spider. I could never turn my coins in for melting. The only exception would be if the date was unreadable.
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Pillar of the Community
United States
2365 Posts |
Careful Gary...even an unreadable date still may have value to a collector..i.e., 3 legged Buffalo!
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Pillar of the Community
United States
2600 Posts |
Well, for me it is simple. At $8 an ounce my silver stays in the safe. But, now it is just common sense. I can take my craaaaaa, well you know, and generate a good or great coin and that is a no brainer. Lets see, hmmmmmmmm, a hand full of 1960s dimes or a semi key Morgan. Come on guys. Being a purest is dignifying but this stuff is of no more value than a Jefferson nickel except for the silver. If we get rid of the avg at best junk, the decent coins will start to have worth. AT some point collecting to be collecting is not the answer. Jim  |
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Replies: 12 / Views: 1,549 |
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Posted 02/23/2007 12:05 pm
