Metal "too cool to melt" premium?
Baley
Posts: 22,660 ✭✭✭✭✭
Seeing all the excitement over the cruder forms of gold and silver as "old pours" and in coin form whether newly-issued perfect NCLT coins or discovered bags of Canadian $5s and $10s,
It occurs to ask, at what point does the "collectibility" of a PM item mean it will practically never again be melted and reshaped in another form or used in industry, and therefore stop being driven primarily by metal spot price (though the metal puts a floor under it) and value primarily be driven by collector demand?
The point being, if it's a collectible, it stops being a commodity available for "value added" practical technological use and is relegated as just something for one person to admire while it's being stored.
Something that throws off no income nor generates any value multiplier to anyone, except for an intangible, purely mental "pride (or security) of ownership" value the owner and a delayed capital change (gain or loss) for the owner upon eventual resale to a different accumulator and storer (or his heirs for those who say, "never sell")
My person practical reason for asking is, should I buy a few ounces of gold, or take the extended family on a vacation? Which memories will be better on my deathbed, the memories of a 10 day Caribbean cruise for 10 people, or the memories of owning another half a dozen double eagles? Assume I have to do one or the other, and the option of "buy the gold and take 2 cruises later" is not available, because 2 of the people won't be around much later, and 4 of them won't be kids much longer.
It occurs to ask, at what point does the "collectibility" of a PM item mean it will practically never again be melted and reshaped in another form or used in industry, and therefore stop being driven primarily by metal spot price (though the metal puts a floor under it) and value primarily be driven by collector demand?
The point being, if it's a collectible, it stops being a commodity available for "value added" practical technological use and is relegated as just something for one person to admire while it's being stored.
Something that throws off no income nor generates any value multiplier to anyone, except for an intangible, purely mental "pride (or security) of ownership" value the owner and a delayed capital change (gain or loss) for the owner upon eventual resale to a different accumulator and storer (or his heirs for those who say, "never sell")
My person practical reason for asking is, should I buy a few ounces of gold, or take the extended family on a vacation? Which memories will be better on my deathbed, the memories of a 10 day Caribbean cruise for 10 people, or the memories of owning another half a dozen double eagles? Assume I have to do one or the other, and the option of "buy the gold and take 2 cruises later" is not available, because 2 of the people won't be around much later, and 4 of them won't be kids much longer.
Liberty: Parent of Science & Industry
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Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
Joking aside, I vote for the cruise and family time.
Nothing is more valuable!
I think on your death bed taking the cruise with family would be remembered/appreciated well before how much gold did one accumulate.
You may or may not be able to buy more gold later but from the sounds of it you will never have the opportunity to do this cruise again with the people you mention.
JMHO.
Best!
it's the first paragraphs I was more interested in, e.g. if it will never again get melted because it's "too cool" and carries premium to melt, doesn't it cease functioning as gold, and might as well be silver, copper, or paint and canvas, currency paper, carved ivory, whatever other substance with "value"?
Liberty: Parent of Science & Industry
<< <i>It occurs to ask, at what point does the "collectibility" of a PM item mean it will practically never again be melted and reshaped in another form or used in industry, and therefore stop being driven primarily by metal spot price (though the metal puts a floor under it) and value primarily be driven by collector demand? >>
Very hard to say. Hard to specifically narrow this thought down. It could be as simple as 2 people wanting the same PM item, 1 paying moon money for it, then sticking it in the back of the safe never to be sold by him, even though it may be relatively common.
I have heard about key and better date Morgans/Peace $'s and Walker Halves being sent to the smelter. I guess it all depends on who ends up with them (i.e. Heirs) and where they take them to sell (i.e. Cash4Gold). Nothing is safe from the smelter if it's in ignorant hands.
Enjoy the cruise.
Too many positive BST transactions with too many members to list.
For fun...find some spot PMs while in port
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
It occurs to ask, at what point does the "collectibility" of a PM item mean it will practically never again be melted and reshaped in another form or used in industry, and therefore stop being driven primarily by metal spot price (though the metal puts a floor under it) and value primarily be driven by collector demand?
I like this question. I don't have an answer, because I think it changes. And because it changes, I think the above-ground potential supply (for industry / fabrication / etc.)changes as well.
In ?? late March / early April of 2011 as silver started (or was in) it's somewhat parabolic moment, I purchased a roll of pristine 1947-S Roosies for something like 15% over melt. I do not, and did not consider them part of my "stack" of metal, but the price they went for was coming in line with their metal price. They hold a place in my collection, although they don't fit anywhere really. Should silver reach 100. anytime soon (say within the next 12 months), would there be any collector premium left? Probably not. If silver steadily climbed with it's regular dips and peaks and volatility, and then reached 100. ten years from now? There would probably be a premium re-attached as the market for collectability readjusted to historical PM prices. But maybe no one would want Gem Roosies either, so that's no given.
I think the same is true for many "collectable" PM coins. Certain gold issues trade for roughly the same as they did when gold was 2/3rds of it's current price. The collectable premium eroded, in my opinion, do to the "quick" rise in prices. The market there has not yet adjusted. Should gold hold and advance over the next two years or so, I would suspect many gold issues will regain some, or maybe all of the premiums they used to have. Maybe not, but I think it's more probable the percentage premiums will increase for many as the historical PM prices support new baseline melt values.
BTW ... glad I saw your questions ... good way to start my day
“We are only their care-takers,” he posed, “if we take good care of them, then centuries from now they may still be here … ”
Todd - BHNC #242
<< <i>
>>It occurs to ask, at what point does the "collectibility" of a PM item mean it will practically never again be melted and reshaped in another form or used in industry, and therefore stop being driven primarily by metal spot price (though the metal puts a floor under it) and value primarily be driven by collector demand?<<
I like this question. I don't have an answer, because I think it changes. And because it changes, I think the above-ground potential supply (for industry / fabrication / etc.)changes as well.
In ?? late March / early April of 2011 as silver started (or was in) it's somewhat parabolic moment, I purchased a roll of pristine 1947-S Roosies for something like 15% over melt. I do not, and did not consider them part of my "stack" of metal, but the price they went for was coming in line with their metal price. They hold a place in my collection, although they don't fit anywhere really. Should silver reach 100. anytime soon (say within the next 12 months), would there be any collector premium left? Probably not. If silver steadily climbed with it's regular dips and peaks and volatility, and then reached 100. ten years from now? There would probably be a premium re-attached as the market for collectability readjusted to historical PM prices. But maybe no one would want Gem Roosies either, so that's no given.
I think the same is true for many "collectable" PM coins. Certain gold issues trade for roughly the same as they did when gold was 2/3rds of it's current price. The collectable premium eroded, in my opinion, do to the "quick" rise in prices. The market there has not yet adjusted. Should gold hold and advance over the next two years or so, I would suspect many gold issues will regain some, or maybe all of the premiums they used to have. Maybe not, but I think it's more probable the percentage premiums will increase for many as the historical PM prices support new baseline melt values.
BTW ... glad I saw your questions ... good way to start my day
Hey POL, thanks for the comment, that is the kind of insightful analysis that makes for interesting reading and thinking.. what got me started is the posts in other threads about the industrial demand for silver, and then the idea that collectible stuff with premium (old pour bars, proof NCLT in PF 70 TPG holders, maybe your roll of BU 47S dimes) might as well not be made of PMs for the purposes of availability for industrial use, because of the premium. I do wonder at what price level if any they are worth more for manufacturing, but also wonder, if they were melted, would they just instead be issued as new coins with higher premiums?
Because there seems to be no shortage of people who want to buy this year's mint output for quite a bit more than melt, even at higher PM prices.
Liberty: Parent of Science & Industry
David: [while playing pool] I guess there's limits to what money can buy.
John: Not many.
Diana: Well some things aren't for sale.
John: Such as?
Diana: Well you can't buy people.
John: That's naive, Diana. I buy people every day.
Diana: In business, maybe, but you can't buy people not when real emotions are involved.
John: So you're saying you can't buy love? That's a bit of a cliché don't you think?
Diana: It's absolutely true.
John: Is it? What do you think?
David: I agree with Diana.
John: You do? Well let's test the cliché. Suppose... I were to offer you one million dollars for one night with your wife.
David: I'd assume you're kidding.
John: Let's pretend I'm not. What would you say?
Groucho Marx