Again–When the supply exceeds demand, silver coins will be melted. That happened when silver spiked to over $40/ounce. It happened in late 1979 and early(January) 1980-. And again in 2011. Silver coins were melted en masse .I was there both times and participating. I doubt that you were.
I have no doubt some coins were melted. But the economics make it clear it doesnt make any sense to melt them, in fact it makes good sense not to.
And, so let us say silver spiked to $100 oz. Why then would it make sense to melt them, since they have more value intact?
If the demand for silver ingots exceeded the supply, then it would. This tends to happen when silver prices are high, I gather.
If silver spiked to $100/ounce, there would be 50 sellers of silver coins in our store and perhaps one buyer. There needs to be an ultimate buyer for those coins and there isn’t when the market spikes that high. Well, the ultimate buyer is a refinery. The coins are melted down into .999 fine silver bars, and sold to the various commodity exchanges around the world(the COMEX in the US). Then people who think silver will keep going up can buy contracts on commodity exchanges.
Seconded by someone else who was there.
And at least in my case, that one buyer wanted 100 ounce bars rather than rolls and bags of coins. So all the stuff that is a harder sell (Roosevelts, Washingtons, 64 Kennedys, most Franklins and Walkers) goes out to Silvertowne to be melted and I get a few large bars from them. Plus, having been through this before, I may not want to risk being caught sitting on a hoard of coins that aren’t selling (or are slower sells even when the demand is there) when the price falls out. My best bet is again making the call to Silvertowne. Give me a check or some form of silver I can move.
And in case you (the dear reader) are thinking some place like Silvertowne is just going to sit on them, think again. They know the market is going to drop just as I do and because of the larger volume they have, their risk is even greater. So it hits the furnace and gets turned into what they can sell. That’s just the way it is.
I just think it’s sad to see any coins melted down. Unless they’re culls, of course.
The essence of my point was that coins are not melted in small quantities.
I said something like this, “Buyers will sometimes try to get a seller to lower their price by telling them it is expensive to melt down the few coins they are trying to sell”.
This is indeed my opinion. But it is also a fact. I know it’s a fact because it has happened to me.
My point is that coins are rarely melted down unless there are a large enough quantity to make it worthwhile.
It just doesn’t make any sense to me for someone to take the time and trouble to melt six coins and extract the silver.
I guessed that if someone is melting coins, it is not worth doing unless they have about 100 or more coins. That is just my guess. But the fact is that it rarely makes sense to melt coins unless there are a sufficient number so that the cost is of the melting and extracting is spread out over a larger number of coins.
Sam is in the business and I am not. His opinions definitely seem to me to be more accurate than mine. No argument there.
But I wasn’t talking about “when” the coins are melted in terms of supply and demand.
I was just trying to warn sellers of a trick that some buyers will try to use to convince them to agree to lower the price. I know that happens because it has happened to me.
I have no argument with Sam in terms of coins being melted wrt to supply and demand.
I’m just saying that it doesn’t make financial sense to melt a handful of coins at a time.