Silver coin melting

[David]

I just thought I would let you know an interesting conversation I had with my local coin dealer. A few days ago I had seen two sliver proof two pound coins they were in their coin capsules but did not have the case or the certificate at the time I did not have the cash to buy them but when I went back yesterday they were gone the dealer said "They might have been sold or melted down thats why we do not have many silver coins in stock at the moment because of the price of silver we melt them down to sell the silver." I thought this rather interesting because if dealers are melting silver coins I think that some time in the future Those of us who have collections of silver coins could end up with rare coins because most silver proofs have a quit low mintage to start with. It could also play havoc with mintage figures in coin books because over a period of time no one will know how many coins are circulating. I had already know that older pre-decimal silver coins were melted but I never thought that people would melt modern proof coins.

[Peckris]

I just thought I would let you know an interesting conversation I had with my local coin dealer. A few days ago I had seen two sliver proof two pound coins they were in their coin capsules but did not have the case or the certificate at the time I did not have the cash to buy them but when I went back yesterday they were gone the dealer said "They might have been sold or melted down thats why we do not have many silver coins in stock at the moment because of the price of silver we melt them down to sell the silver." I thought this rather interesting because if dealers are melting silver coins I think that some time in the future Those of us who have collections of silver coins could end up with rare coins because most silver proofs have a quit low mintage to start with. It could also play havoc with mintage figures in coin books because over a period of time no one will know how many coins are circulating. I had already know that older pre-decimal silver coins were melted but I never thought that people would melt modern proof coins.

This is very surprising news. Low-grade predecimal silver has been melted down for decades now, but as you say, modern proofs ought to be out of that. For one thing, the issue price is fixed not on silver value, but on quality and limited mintage (built-in scarcity). To make a profit on melting, a dealer would have to buy in at less than the silver value, which itself would be a mere fraction of the issue price, and a severe loss to the seller.

Mind you, I CAN see that 1972 and 1977 proof crowns might be worth more than their issue price now, and they have never really risen in value very much as so many were minted, but that argument ought not apply to anything after the mid-80s.

If it proves anything, it's that the secondary market in decimal commemoratives - always a nightmare for sellers who had paid the full issue price - must now be at rock bottom if silver values are higher than market value. (Where 'market value' = secondary prices realised, rather than values quoted in Spink which are based on issue price.)

[azda]

Certainly good news. Lets hope they get on with all those copper discs from fleabay to

[VickySilver]

And not to divert the OP, but I am a bit nervous at the metals market obliterating the collecting market in general. We have seen in the American series the recent platinum commems lose ALL of their numismatic/collector value in homage to the rise of platinum (admittedly not as great as the silver and gold metoric rises) - an example is the satin finish 2008 W 1/2 oz. $50 coin with mintage of about 2250. This was considered a possible future star but is now available for essentially bullion.

So, and this is only one example, we are perhaps seeing the destruction of modern & even precious metal bits. Where will new collectors come from? Will they be content with older issues or essentially copper-nickel cra-? Also, many potential pounds or dollars destined for the collector market may be getting sucked up and into the bullion juggernaut. And when or if bullion crashes, then where will these collectors/numismatists turn?

[scott]

i got a scrap 1882 halfcrown. it was listed wrong on ebay and got it for a pinch a fair few months ago (a few quid i think) those were fairly low mintage, so who knows.

[1949threepence]

And not to divert the OP, but I am a bit nervous at the metals market obliterating the collecting market in general. We have seen in the American series the recent platinum commems lose ALL of their numismatic/collector value in homage to the rise of platinum (admittedly not as great as the silver and gold metoric rises) - an example is the satin finish 2008 W 1/2 oz. $50 coin with mintage of about 2250. This was considered a possible future star but is now available for essentially bullion.

So, and this is only one example, we are perhaps seeing the destruction of modern & even precious metal bits. Where will new collectors come from? Will they be content with older issues or essentially copper-nickel cra-? Also, many potential pounds or dollars destined for the collector market may be getting sucked up and into the bullion juggernaut. And when or if bullion crashes, then where will these collectors/numismatists turn?

When the price of gold crashes, as it inevitably will in time and with significant economic recovery, forming a collection of sovereigns is high on my list of priorities. It's a waiting game.

Edited April 23, 2011 by 1949threepence

[Red Riley]

I think it's all rather sad. Customers have bought pre-1920 silver off me in as high a grade as GVF with a view to melting. When the bubble finally bursts, numismatics will be the poorer as young and starter collectors will have less affordable coins available with which to start their collection.

Perhaps it is partly my fault as I should perhaps have raised my prices at the lower end of the scale to avoid this possibility, but in the short term it is once again the less well off collector who suffers.

[Peckris]

When the price of gold crashes, as it inevitably will in time and with significant economic recovery, forming a collection of sovereigns is high on my list of priorities. It's a waiting game.

I am still kicking myself that in the late 90s, when sovs were worth less than £50 BV, WHY oh why didn't I start a type collection ?

I think it's all rather sad. Customers have bought pre-1920 silver off me in as high a grade as GVF with a view to melting. When the bubble finally bursts, numismatics will be the poorer as young and starter collectors will have less affordable coins available with which to start their collection.

Perhaps it is partly my fault as I should perhaps have raised my prices at the lower end of the scale to avoid this possibility, but in the short term it is once again the less well off collector who suffers.

I would not worry too much Derek. There must still be countless 'accumulations' from the 60s yet to appear in auction lists, with all their pre-47 low-grade silver. And I'm sure it will be a cold day in hell before supplies of pre-20 silver dries up. A lot of people just don't have their finger on the pulse of precious metal market movements.

[1949threepence]

When the price of gold crashes, as it inevitably will in time and with significant economic recovery, forming a collection of sovereigns is high on my list of priorities. It's a waiting game.

I am still kicking myself that in the late 90s, when sovs were worth less than £50 BV, WHY oh why didn't I start a type collection ?

I seem to remember them being offered at a low price via adverts in the papers around 1997 to 1999. Forget who was selling them, but the ads were full page size. You could get more or less any date you wanted.

I think it's all rather sad. Customers have bought pre-1920 silver off me in as high a grade as GVF with a view to melting. When the bubble finally bursts, numismatics will be the poorer as young and starter collectors will have less affordable coins available with which to start their collection.

Perhaps it is partly my fault as I should perhaps have raised my prices at the lower end of the scale to avoid this possibility, but in the short term it is once again the less well off collector who suffers.

I would not worry too much Derek. There must still be countless 'accumulations' from the 60s yet to appear in auction lists, with all their pre-47 low-grade silver. And I'm sure it will be a cold day in hell before supplies of pre-20 silver dries up. A lot of people just don't have their finger on the pulse of precious metal market movements.

It'll be interesting to see how it all pans out in the end.

[Colin G.]

I wouldn't be surprised if a lot of it doesn't reach the melting pot anyway, it has just become the latest short term investment, it is probably getting shipped all around the world as it is re-sold waiting for the bottom to drop out of the precious metal market!!