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Consequence of the recent flood of returning $20 gold pieces? Mass meltings.
Weiss
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In a thread on the Precious Metals forum about the potential profit to be made from buying scrap metals and selling them to refiners, there were a few accounts of $20 libs being dumped into the crucible. The implication is that it is currently happening in very large numbers.
It's not like that hasn't ever happened before. And we've all seen 90% silver pouring into crucibles over the last several metals surges (I believe peak 90% is imminent if it hasn't already happened).
But the idea of $20 gold pieces--at least those that aren't culls--being melted makes me sad.
Thoughts?
Image courtesy of @Jinx86 : 
We are like children who look at print and see a serpent in the last letter but one, and a sword in the last.
--Severian the Lame
--Severian the Lame
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I agree... I hate to see gold coins melted...I do understand that people are free to capitalize on their possessions in any manner they choose. That being said, I would think a quick transfer for cash would be preferable. JMO...Cheers, RickO
Agree. It makes no sense to me to melt non-cull double eagles. They have a known amount of gold, they are backed by the U S Government, and they are a well recognized form of gold. I'd rather have several double eagles than a bar of gold that's easily counterfeited.
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
And yet it's illegal to melt pennies.
Whoever is careless with the truth in small matters cannot be trusted with important matters.
I believe / hope decent examples will be saved and slabbed. With slabbed generic MS63 $20 pieces close to melt these are being pursued by gold collectors and investors. I bought some $20 PCGS MS63 Libs at recent show for $1440 each from large bullion dealer. Nice Coins. I was elated, in looking over the bourse it was the one deal I wanted buy at the show. Fun coins to bulk up on.
I too would rather have coins than bars.
In my world famous treatise on 90% silver, I hypothesize that even though 90% boasts a known purity, weight, ratio, and refiner, it's not the purity, weight, ratio, and refinery de jour.
Those of us in the trenches (including me) tend to think of "the market" as a loose network of brick & mortar shops, a few established websites (Apmex, Gainsville, etc), eBay, our own BST forum, coin shows, and a few reference sites like Kitco. It's what we encounter daily or weekly.
But the truth is that you could pool every ounce of gold from the above on any given week, and it would probably not even begin to equal the amount of gold that is traded every minute on the world's commodities markets.
And those markets wouldn't know a $20 double eagle from a 20 Mark or 20 Franc coin. They trade in kilos, or more likely LBMA "Good Delivery Bars"--massive 400 troy ounce .999 or .9999 pure gold bars that are bought and sold sight-unseen in both paper and physical form from Beijing to Dubai to London.
It's my belief that ultimately, the industry lives and dies by LBMA good delivery bars and that is what is leading the current trend in melting. The gold jewelry, bullion coins, or government issued coins from the US and around the world can't rely on small batch meltings of uneven weight and purity from local or regional smelters. Kay Jewelers, the US Mint, and the cell phone industry can't rely on mom and pop smelters for their materials. As with bullion traders, they want and need known purity, weights, and perhaps most importantly: Reliable supply chains. That comes in the form of these massive 400 ounce juggernauts. So where do PCGS MS62 Saint Gaudens @ 33.431 grams and 90% gold, 10% copper fit into the equation?
They don't.
--Severian the Lame
In the end it is just bullion.
Yes, but it's not pure. For a lot of uses, you want it pure. Even for hoarding, taking the coin out of it, would you rather have 90% or 100%? In the end, the value has to trace back to potential use.
Is it possible to make it illegal to melt down double eagles?
Collector
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You can make anything illegal. But, why? In some sense, they are being used for what they were intended: intrinsic value.
The bigger problem is you are robbing people of money if you restrict the use of the coins. There is insufficient demand for the supply available. If you make it illegal to recover the intrinsic value of the coins, you might well see these selling for below melt.
Not because of any numismatic issue. The production of cents loses money for the Mint. The Mint has no interest in replacing the $20s.
I don't disagree with what you have written above, but did you see a recent article about the huge quantities of counterfeit LBMA good delivery bars that are currently in the system. The bars are gold, they test good and are nearly undetectable. They were first noticed because of duplicate serial numbers. The bars are believed to have originated in China (Who would have guessed that) and were not meant to cheat on the gold content but as a means to smuggle them to Hong Kong and then enter them into the banking/trading system because it is illegal for individuals in China to export gold.
This has worked for some time, I believe it said that it has been going on for more than a couple years and J.P. Morgan alone may have hundreds of counterfeit bars in their inventory.
This has upset the system to the point that one broker said they were only accepting delivery on new bars from trusted sources, being the large Swiss refiners and they were melting and re-pouring everything else.
Why would one mix purities like that? Wouldn't that complicate the refinement?
"It's like God, Family, Country, except Sticker, Plastic, Coin."
Mass meltings is murder.
Part of the answer is stop selling your $20 gold pieces and they won’t end up in the refinery.
We saw this in the previous run up towards $1900.
Everything, everything gets sold and dealers don’t want to hold it too long and off to the refinery it goes.
If you melted everything graded below what I have, would mine go up in value?
Just thinking
My Saint Set
When the metals go wild, it's hard to describe what gets melted.
In 79-80..... I nearly cried at what I hammered into packable form to send to the refiners.
But.... I could find no buyers for ..items.. anywhere on the teletype.
Can’t melt this, baby:
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I only agree with melting damaged or cleaned gold coins.
My YouTube Channel
Melt anything but the $20 liberties. Well, maybe the ugly, face all dinged up ones can be sacrificed.
When gold hit $800-$850 back in 1980,
$20 gold (both types) were melted under
AU condition.....or sold for melt, if you were lucky.
Not really. They way they refine down to 0.9999 may require a little more effort if you start more debased, but they go from 70% to 99% pretty easily. Getting to 99.99 is going to be the hard part no matter where you start.
It can't hurt.
Honestly, I know it is sacrilege to say, but: they ain't rare, they ain't historically significant, it is no great loss to the world.
Here's a link for anyone interested: https://www.reuters.com/article/us-gold-swiss-fakes-exclusive/exclusive-fake-branded-bars-slip-dirty-gold-into-world-markets-idUSKCN1VI0DD
If someone sold me a "fake" Credit Suisse bar that is 1 oz and 24 k gold, I'm not sure I care. These days, the X-ray gun makes assay easy and as long as it is good gold, you could easily sell it for melt.
The belief is that the gold is from "dirty" sources and by counterfeiting the stamp its hiding the origins of where it originated from. I'm pretty sure banks don't want to get caught up in something like this as they are required to follow AML rules, "know your customer" rules and OFAC rules.
A link to the original thread if anyone is interested
https://forums.collectors.com/discussion/1025078/if-one-wanted-to-start-sending-material-to-the-refiner#latest
A refiner is offering me more for a cleaned $20 double eagle than what I offered it for on the BST for the last few days, so off to the melting pot it goes. Kinda hurts, but money talks.
Most modern gold commemorative $5 issues and almost all $10 first spouse issues would benefit from a major population reduction from melting.
Many holders of these MS/PR coins in less than 70 grade would sell examples now for close to melt.
Before someone jumps up to say why? I will say it often comes down to volume................if you had say 20-50 of these various issues most dealers will send then to smelter rather than tie them up in inventory hoping to squeeze out a few more dollars of numismatic value.
Interesting article. Thanks for the link.
Smitten with DBLCs.
although there may be Gold still in the ground to be dug and refined, that can be a costly undertaking. throughout recorded History there has always been a finite amount of physical Gold in comparison to the demand for it, so it either has to come out of the ground or be recycled from existing above ground Gold. it is perplexing that so many members either don't understand or don't want to accept that right now the market to "BUY" Gold is soft and dealers holding those Gold coins can't wait out the market, they need to be converted to cash.
the only (un)reasonable way for interested members to stop the Gold coins from going to the melting pot is to make stronger offers for them than the refiners. the reasonable alternative is to try to understand and accept the market dynamics until they change.
What about silver? I don't like hearing how millions of Morgans were melted either.
I had this Melt conversation with my LCS owner. He said he was getting 99% of melt from the refiner (must ship a lot to get 99%). I asked why and he told me he couldn't keep low grade common dates for to long or he would lose money. I bought a MS-61 Liberty $20 last week for $1480. It came out to $8 over melt. I couldn't say no so I bought it.
MIKE B.