Melt Value

[Lemon Thrower]

the ability to melt is important because if it can't be melted then it has no value for other purposes.

during the 1980 run up, 90% silver was labeled junk becuase bullion is 99.9% pure and even sterling is 92.5. People sold it for a hefty discount to 'melt'.

since then, its come to trade at approximately melt because there is demand for it. there is still an implied discount, because bullion trades at a buck over melt and ASE's 2+ bucks over.

but 35% nickels and 40% silver are always less than melt. if what i've heard about the difficulty of refining them is true, esp. the nickels, than they actually may be overvalued relative to melt and a higher discount warranted.

[adagirl]

Hi, let me further elaborate. I am looking a PM's and base metals as a backup plan to the many strategies I have in place already some of which you mentioned. For example, land, farm, supplies, MRE's, and so on. Given that this site is more for coins and metals I didn't really pontificate on the survialist strategies I study and already have employed. I am at the point in my plan that I am now curious as to just liquid these precious metals and base metals are, especially when they are in alloy form. I have had some really great thoughts/answers to these questions.

To address another question of yours: It seems to me that silver refined from a 90% silver coin might be a more recognizable form of exchange than a 1960 quarter, where the Average Joe might think "you are only offering me a quarter for a hamburger." I just made that scenario up, but I am trying to get at the root of my question and the reason I posted this question. And in addition this, I am a rookie at PM's and base metals, so I just have a strong curiousity on all the talk of melt values---but many great folks have already tackled this question.

I am babysitting my 14 month old daughter, so I gotta run for now.

[adagirl]

the ability to melt is important because if it can't be melted then it has no value for other purposes.

during the 1980 run up, 90% silver was labeled junk becuase bullion is 99.9% pure and even sterling is 92.5. People sold it for a hefty discount to 'melt'.

since then, its come to trade at approximately melt because there is demand for it. there is still an implied discount, because bullion trades at a buck over melt and ASE's 2+ bucks over.

but 35% nickels and 40% silver are always less than melt. if what i've heard about the difficulty of refining them is true, esp. the nickels, than they actually may be overvalued relative to melt and a higher discount warranted.

Thank you! This is incredibly valuable intel for a rookie, and precisely the info I was trying to obtain. There is much credence given to the melt value, but does the melt value truly represent the value? You answered that for me in this example as it applies to 35% nickel and 40% silver. Another member indicated the war nickels are especially difficult to melt and seperate because they contain magnesium. So as a rookie, that tells me to stay away from hoarding thos particular coins as bullion. Thank you so much for your time and insights.

[Lemon Thrower]

here is some info, but its not complete.

tulving, a coin dealer, buys 40% at $1.10 under spot, and 90% at .59 under spot. so there is a bigger discount for 40%.

other dealers sometimes pubish buy prices.

there is a lot of demand for 40% right now. what worries me is when silver is $100, will the discounts still be as modest?

in the 70s - 80s, the discounts were huge.

there are no guarantees but if the metal is not easily separable there are risks.

I would say this is not a complete picture because you don’t know what is going to happen in the future.

About 2-3 years ago, there was a shortage of silver. Premiums for ASE’s were over $4 per coin. 90% was $2 over spot.

Things are fluid. When silver is $100, a lot of supply may come out of hiding. Premiums on some items are dropping now, so the high prices might be coaxing supply to come out.

[adagirl]

Lemon thrower: thanks for the information and taking the time to provide it. I feel like I am back in grad school rapidly learning new things at the speed of light. I appreciate the historical perspective as well. I'm going to check out Tulving now.

[Lemon Thrower]

there are a few folks here who do their own refining. Market Harmony and some others. The others may not have found the new board yet, not sure where they are. These are just my guesses from what i learned here.

if silver goes to say $100, people are going to be a lot more discriminating. A roll of 90% halves or quarters, $10 FV which sells for about $160 now will be worth about $800. People are going to sell it by the gram, not the face value. Not sure what happens with 90% and 40% relative to .999. Right now 90% is very liquid and a good deal compared to bullion which is usually +$1an ounce premium. 90% is liquid because its recognizable compared to generic silver rounds, even if they are stamped .999 and 1 troy ounce. Most bullion does not circulate, so in the future, it might be preferred due to consistent weight.

I do not think people will actually melt many coins because there is value in the act of coining and that has come to be recognized, unlike the late 70s.

I may be overly pessimistic about the lower percentage coins, i don't know. the more valuable silver gets, the more feasible it is to pay the cost to separate the silver from the other metal. but it is an uncertainly that is not applicable to the more pure forms of silver.

[highroller4321]

there are a few folks here who do their own refining. Market Harmony and some others. The others may not have found the new board yet, not sure where they are. These are just my guesses from what i learned here.

if silver goes to say $100, people are going to be a lot more discriminating. A roll of 90% halves or quarters, $10 FV which sells for about $160 now will be worth about $800. People are going to sell it by the gram, not the face value. Not sure what happens with 90% and 40% relative to .999. Right now 90% is very liquid and a good deal compared to bullion which is usually +$1an ounce premium. 90% is liquid because its recognizable compared to generic silver rounds, even if they are stamped .999 and 1 troy ounce. Most bullion does not circulate, so in the future, it might be preferred due to consistent weight.

I do not think people will actually melt many coins because there is value in the act of coining and that has come to be recognized, unlike the late 70s.

I may be overly pessimistic about the lower percentage coins, i don't know. the more valuable silver gets, the more feasible it is to pay the cost to separate the silver from the other metal. but it is an uncertainly that is not applicable to the more pure forms of silver.

I think at no matter the price for silver the lower % coins are going to always sell for a discount. Refiners are always going to have a problem with the mangenese in the war nickels and its always going to be more work for the 40% than the 90%. You may be able to get a little more silver for your money with 40% and 35% but when it comes time to selling I think you will get a little less money for your silver.

[didou]

there are a few folks here who do their own refining. Market Harmony and some others. The others may not have found the new board yet, not sure where they are. These are just my guesses from what i learned here.

if silver goes to say $100, people are going to be a lot more discriminating. A roll of 90% halves or quarters, $10 FV which sells for about $160 now will be worth about $800. People are going to sell it by the gram, not the face value. Not sure what happens with 90% and 40% relative to .999. Right now 90% is very liquid and a good deal compared to bullion which is usually +$1an ounce premium. 90% is liquid because its recognizable compared to generic silver rounds, even if they are stamped .999 and 1 troy ounce. Most bullion does not circulate, so in the future, it might be preferred due to consistent weight.

I do not think people will actually melt many coins because there is value in the act of coining and that has come to be recognized, unlike the late 70s.

I may be overly pessimistic about the lower percentage coins, i don't know. the more valuable silver gets, the more feasible it is to pay the cost to separate the silver from the other metal. but it is an uncertainly that is not applicable to the more pure forms of silver.

I think at no matter the price for silver the lower % coins are going to always sell for a discount. Refiners are always going to have a problem with the mangenese in the war nickels and its always going to be more work for the 40% than the 90%. You may be able to get a little more silver for your money with 40% and 35% but when it comes time to selling I think you will get a little less money for your silver.

Of course it's going to sell cheaper if the % is lower.

But i think what he was saying is :

Assuming that the cost of extracting silver out of war nickels is $10/ozt. (i have no idea what the real price is, but it doesn't matter for this example)

If the price of silver is $20/ozt, it cost 50% to recover your silver, no one will does this as it's not economically viable.

If the price of silver is $200/ozt, it cost 5% of the total value to recover your silver, making it more feasible to actually do it.

All this doesn't change a thing if you have 99.9%+ pure silver in your hand.

[Computer Jones]

Don't forget to factor in that lower Ag percentage coins allow for the possibility of making "change" for trades and barter situations that can augment the use of 90% dimes.
This might make them a bit more on the desirable side since they exist in a known Ag amount (prior to smeltification)!?!

PS- I like to acquire any Ag for less than melt at any time, if possible, the more the better!!!