What really happens to all the junk coin silver and gold?

llafoe · February 21, 2011 9:24AM

I remember in the late 70s/early 80s, the coin collecting community was concerned that ALL the junk coin silver and gold was being melted and that there would be NO lower grade (MS-62 and lower) common date coins ever again in the hobby. Well, that obviously wasn't true then - is it true now? What really happens to all the junk coin silver and gold? Are they really melting the silver and gold? Is there a demand and/or need for silver and gold; or is it being used as a hedge against the economy and only being held by speculators and Revelation theorists (or Mayan theorists) and none of it is actually being melted?

SUMORADA · February 21, 2011 9:50AM

I don't know.

But I would like too!

Russ · February 21, 2011 10:08AM

It just goes round and round from seller to buyer to seller to buyer, etc. Then when it crashes, the last one in the barrel sits on it for 25 years hoping it will come back.

Russ, NCNE

Coinosaurus · February 21, 2011 10:12AM

I have to believe the coin stores aren't sending EVERYTHING to the refiners.

Surely a good portion of it gets traded to investors/speculators rather than "end users?"

Barndog · February 21, 2011 10:17AM

a good portion is going to the refiner, but even running 24/7 they don't have the capacity to handle it all

mrdq · February 21, 2011 10:18AM

I watched 20,000 face go to melt last october-ish. 1,000 of it was mine. From one dealer in one city in one week. I think a LOT OF IT is getting melted to be honest.

Good news is remember there was MILLIONS struck.

GrumpyEd · February 21, 2011 10:19AM

I think a lot of it gets bagged and saved as an investment. Each time they melt it some is lost so why melt it without a good reason.

Maybe it's assumed melted because it was sold "at melt" but I doubt that most is truly melted.

shorecoll · February 21, 2011 10:19AM

I think this time is different, although the PM forum goes into more detail than this one. More people are demanding .999 fine stuff, ASEs, bars, etc. so more stuff must be being melted. I doubt anyone knows exactly what. I think 2010 and thus far into 2011, tremendous quantities of ASEs and similar products are being sold.

TwoSides2aCoin · February 21, 2011 10:25AM

A lot of it ends up on eBay with a "reserve price". Thankfully , silver keeps going up.

keets · February 21, 2011 10:42AM

my experience says that stuff having no real Numismatic value moves "up the chain" towards the refinery and really does get melted. the wholesaler my old boss used is near Buffalo and there's a refinery in upstate New York that he used for Cents prior to the melting ban. he also had mentioned another refinery in south-central Ohio and everyone knows who SilverTowne is.

BU common date Modern Dimes, Quarters and Half-Dollars make up the bulk of what Russ referred to as going "round and round" since a fair number of collectors/speculators like having physical Silver. it has a slight premium with AU/circs moving "up the chain" if there's no demand. older stuff like Mercury Dimes, Walkers and SLQ's also carry a modest premium in circulated grades so those are always easy to sell. better date stuff for all the above has a bigger premium that dealers can reference on the GreySheet. common date circ Morgan and Peace Dollars are wanted by collectors/speculators in any grade. when you get back in time to Barbers there is enough Numismatic value that only the really, really worn coins end up dissappearing. my boss always had "face" bags of Barbers in G/VG that we'd take to shows and occassionally sell.

i can't recall ever sending any junk Gold coins "up the chain" because they were always in demand and had a premium past melt.

pontiacinf · February 21, 2011 10:44AM

<< <i>my experience says that stuff having no real Numismatic value moves "up the chain" towards the refinery and really does get melted. the wholesaler my old boss used is near Buffalo and there's a refinery in upstate New York that he used for Cents prior to the melting ban. he also had mentioned another refinery in south-central Ohio and everyone knows who SilverTowne is.

BU common date Modern Dimes, Quarters and Half-Dollars make up the bulk of what Russ referred to as going "round and round" since a fair number of collectors/speculators like having physical Silver. it has a slight premium with AU/circs moving "up the chain" if there's no demand. older stuff like Mercury Dimes, Walkers and SLQ's also carry a modest premium in circulated grades so those are always easy to sell. better date stuff for all the above has a bigger premium that dealers can reference on the GreySheet. common date circ Morgan and Peace Dollars are wanted by collectors/speculators in any grade. when you get back in time to Barbers there is enough Numismatic value that only the really, really worn coins end up dissappearing. my boss always had "face" bags of Barbers in G/VG that we'd take to shows and occassionally sell.

i can't recall ever sending any junk Gold coins "up the chain" because they were always in demand and had a premium past melt. >>

Al always gets right to the point, short and sweet, and honest as all heck.

(ill call the contractor to widen the doors, your head is getting kind of big there)

RedneckHB · February 21, 2011 10:50AM

<< <i>I watched 20,000 face go to melt last october-ish. 1,000 of it was mine. From one dealer in one city in one week. I think a LOT OF IT is getting melted to be honest.

Good news is remember there was MILLIONS struck. >>

$300 million face value in 1964 Washington quarters alone.

cladking · February 21, 2011 10:52AM

There's just so much coin that it can't disappear overnight. In '79 the refineries weren't
even going full out until June or so if memory serves and then they were done by the fol-
lowing June. There wasn't enough time to melt much more than about 10% of mintage.

The refineries now have been running a couple years but they seem to be going pretty
slowly. Maybe if they ramp up to peak production they could mop up most of the available
junk in six or seven years but the mintages were used and these can come out of the
woodwork for decades.

There will be some surprises though if this keeps up. Collector coins can actually be more
likely to be destroyed in some cases since collectors tend to be more savvy; maybe too
savvy.

roadrunner · February 22, 2011 12:12AM

<< <i>It just goes round and round from seller to buyer to seller to buyer, etc. Then when it crashes, the last one in the barrel sits on it for 25 years hoping it will come back.

Russ, NCNE >>

Yup, just like stocks did from 1929-1954, 1966-1982 and now 2000-2XXX.

roadrunner

What really happens to all the junk coin silver and gold?

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