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 Replies: 14 / Views: 2,122 |
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Valued Member
United States
206 Posts |
I've been thinking a lot about the price of silver and it's effect on our great hobby. I've come to the conclusion that it is not good.
There are many 'experts' who think the price of silver could hit $100 an ounce or more over the next 18 months or so. This is great for those of us who have old bullion rounds hanging around, or 1 oz bars collecting dust in the backs of our safes.
But what about all of the coins?
Think of all the lower grade silver coins that will be thrown into the melting pot if silver goes that high. Mercs, Barbers, Morgans, Walkers... I personally see these as far more valuable than the silver they contain just because of the history behind them.
If you want to throw all your 64' halves into the melting pot, then that is fine.
But what are we going to do when silver prices simply out pace the numismatic value some of these coins have? I worry about a day where my young nephew (just now getting into the idea of collecting coins) can't walk into a local coin shop and pick up a few non-key, worn out walkers for his Dansco (not Whitman!) album...
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Pillar of the Community
United States
4989 Posts |
I think it is a misconception that coins sold for silver value get melted.
In reality, 100% (or 99.9%) are bought as a silver investment and are simply horded. Since the U.S. government has for all intents guaranteed the weight and silver content of each coin, it would be wholly pointless and unprofitable for any buyer to melt them into bars.
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Moderator
 United States
188213 Posts |
I agree with fenton. Until there is a shortage of silver available for industrial applications, most coins will remain as coins for the convenience.
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Pillar of the Community
United States
759 Posts |
I agree it's not good, but for different reasons. Precious metals price rises will price many out of the hobby or prevent them from entering. At $100 an ounce, a complete set of Franklins is pushing $1300 melt. Plus, at some point, people are going to lose big too in metals. It's the nature of markets. When that happens, I think most coins will take a hit as well. I see demographics, the mint, and other things working against the hobby, or at least rising prices, in the long term too.
BTW, I've seen 10 Walkers go straight from a seller's hand into the melting pot at a local flea market, so some do get melted, but as fenton said, I think most get hoarded/traded.
As a public service though, I promise to let everybody know when I decide to buy silver for investment purposes. That pretty much signals the market high usually.
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Bedrock of the Community
United States
12437 Posts |
That was a serious concern in 1979-1980 and many collector-grade coins were melted but not so much so now with the advent of face value bags being easily tradable commodities. Heck, even the US Mint has melted over 1 BILLION coins in its history.
You are correct that silver value is outpacing the numismatic value for more common coins. I get silver for close to melt whenever I can at my shop's bid board auctions. Lately, the price of silver has gone up so much that I am now also able to get the Barber denominations for very close to melt which was almost impossible two or three years ago.
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Moderator
United States
188213 Posts |
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Pillar of the Community
United States
2589 Posts |
since prices are so high I've been buying silver commems and barbers instead of junk kennedys walkers and the like. the prices are getting to the point where even common date seated liberties can sometimes be had at under melt
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Pillar of the Community
Canada
3692 Posts |
I think that by then minimum wage everywhere will be $75 an hour. :P
But, I partly agree with the OP in that it's more expensive now to buy small silver coins. Your coins will be worth more, however, who can afford to buy them? Kings, I suppose...
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Valued Member
United States
188 Posts |
It is an individual decision but; I think the time is coming when you will have to decide to buy a couple pieces of silver or a key date.
It is just a matter of your budget and what set you are working towards.
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Valued Member
United States
310 Posts |
I don't know. The last coin show I was at I was looking for circulated roosies to finish off my set. I had a dealer tell me straight up, he just throws them in the silver melt pot. They are being melted. sure they have a guaranteed weight/composition when they leave the mint, but after some wear, that weight gets off, and such. I have some fear that the lower grades will disappear. Even mint state mercs don't have much of a premium if any. I've seen em melted.
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Pillar of the Community
Canada
598 Posts |
Quote:
In reality, 100% (or 99.9%) are bought as a silver investment and are simply horded. Since the U.S. government has for all intents guaranteed the weight and silver content of each coin, it would be wholly pointless and unprofitable for any buyer to melt them into bars.
fenton I am unaware of the actual provable percentage, but I totally agree... I think of each silver coin as a silver round, that also has the benefit of being worth face value if the price of silver plummets. Now, of course, if the price were to plummet to face or less, the economy would probably be in a shambles  . I'm not a doomsdayer, but if such were to happen, these types of coins may be the only acceptable government currency. As for culls... holed, bent, smashed, worn smooth and abused... off to a refiner? Sure. Oddly, I am also of the opinion that some holed coins made into jewelry, were actually saved from the proverbial melting pot. Even though their face value may have been exceeded by their melt value, they survived as a treasured piece of jewelry... then I bought them... at spot  . Great pieces at an affordable price.  |
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Pillar of the Community
Australia
852 Posts |
I've read many posts on different websites about gold and silver coins being melted down. This applies especially to coins from foreign countries and even more-so if the legends are in foreign languages. The melter's haven't a clue as to the rarity of some of these coins. They don't even know their purity until they melt them.
The coins that I could buy for $5 in 2003 are now over 30 (crowns etc), makes the hobby expensive for anyone starting out.
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Valued Member
United States
104 Posts |
In just the few months I've been collecting, dollars have gone up . I bought my first few for 24-26 bucks. I saw common dates on ebay today go for 30 and 36! Bummer for me. I think I'll just go buy silver eagle for investments, and look for coins other places, like fairs, garage sales, flea markets, etc. except, of course for my Peace dollars. |
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Bedrock of the Community
Australia
21786 Posts |
I agree that high bullion prices are bad for numismatics. The high bullion value just adds unnecessary upwards price pressure. Sure, I like to see the value of my collection increase, but that is just a bonus. The bullion value has never been my motivation.
I am not a bullion collector, and I am not even a numismatic investor. I have 30 or so gold coins and perhaps 2000 silver coins, and maybe 1000 copper / bronze coins. I just prefer studying and collecting coins for their numismatic interest.
I was buying sovereigns in the mid '60s for $15 each and I remember buying a nice denarius of Antoninus Pius in EF for $4.50. So what? I wasn't thinking of a profit then. At that time, Seabys was valuing Roman coins in shillings, not hundreds of dollars.
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Bedrock of the Community
United States
17884 Posts |
Quote:
I think it is a misconception that coins sold for silver value get melted.
In reality, 100% (or 99.9%) are bought as a silver investment and are simply horded. Since the U.S. government has for all intents guaranteed the weight and silver content of each coin, it would be wholly pointless and unprofitable for any buyer to melt them into bars. The refiners are always in need of scrap for their operations because they have customers that need the refined product and there is nothing that says they can't buy those "investment" bags of 90% just like anyone else. |
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Replies: 14 / Views: 2,122 |
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Posted 03/18/2011 2:59 pm
