Investing In The Melt Value Of Pennies

As a metallurgist, I especially appreciate Sap's reply, reminding us that just because a coin contains a certain amount of metal, it is not necessarily worth the value of that metal. Essentially, copper cents are like copper ore. We mine them by collecting them, but to turn them into copper metal, we have to extract the copper out of them.

This concept applies to the metal value of all coins, including silver (actually 90% silver, 10% copper) and gold (again, 90% gold and 10% copper). That is one reason that you can't necessarily expect to recoup the so-called melt value of junk silver or pre-1933 gold.

There are some mitigating factors, though. For example, it's pretty easy to turn 90% silver into sterling silver (92.5% silver, 7.5% copper) just by adding a bit of pure silver.

Likewise, gold is almost always used in an alloyed state (14 karat gold is actually 58% gold, with the remainder typically copper and silver). So you can add copper and silver to a 90% gold coin to create 14K gold. No need to refine the gold first.

On the other hand, copper is typically used in a much higher purity state, and with different alloying elements, than cent coins. So the cost of refining must be included in the metal valuation for cents.

Check out above. I believe Sap did mention it in BOLD.

My bad.

Yes, I did. I underlined it, too.


Slightly cooler, yes. Coinage bronze - which, being a copper-zinc alloy is technically a brass rather than a bronze - melts at a slightly lower temperature than pure copper: 1070 deg C, rather than 1100 deg C. It's got to be a nice reducing flame, though, because copper readily oxidizes at those temperatures.

However, it should be pointed out that (a) melting your copper coins into a big ugly ball of brass will not be free; it will cost you fuel, electricity or whatever, which will eat into your profits, and (b) honest, law-abiding scrap metal merchants are particularly wary of people coming into their shop with melted slabs of an alloy that just happens to match coinage alloy. They will probably ask you awkward questions about where the metal came from and may well refuse to accept it if they suspect you've illegally melted coins.

Ok then put the money where?

Stocks? No...those can go to zero or become penny stocks ironically.

Cash in the bank? No...that would have the same effect you just described?

PM's? Maybe...but they can fluctuate all over the place and you could lose alot more than 10%.

Collectible coins? Maybe...but with any collectible you have to match a buyer and a seller. That's not always easy to do and often times an item can go unsold for years or end up being sold for a loss.




Apparently you do not understand the concept of intrinsic value. If inflation hits, and the metal values go up like they have in the past, the value of the cents goes up with it. Although the market is limited for these, there are still people that buy them. Heck, one of the guys working at my LCS wants to buy my hoard of copper cents and yes at a premium.

Oh, I understand intrinsic value well enough; it's why I collect/invest in Precious metals, which, by the way, copper is not.

I think you may be lacking a basic understanding of investing though. The number one lesson to learn, I believe, is: the past is not indicative of the future. So for instance, your statement above indicating a correlation between inflation and metal prices doesn't necessarily hold true for the future. Also, your comment about where else to put the funds, you mention not putting the money into stocks because they could "go to zero". Well, I am sorry to tell you, if you have such an aversion to risk that you won't invest in the stock market, you definitely should not be invested in commodities like precious metals, they are an even more risky asset class, in my opinion.

Anyways, I don't want to start a pissing match.

Oh, and can I have the number for the guy at your LCS?

There are, approximately, 1.43x10^21 zinc atoms in a cent. That's about as many stars as there are in 1/10th of the entire visible universe. Plucking one atom out every second, it would take about 45 trillion years. Leaving an electron microscope powered up for that long would leave quite a hefty power bill.