There is no exact rule as to when the economics of melting silver coin make sense.
There have been several waves of selling over the years (1965/US, 1968/Canada, 73/74, 79/80, etc..) and different stuff went first, such as common 90%US and 80% Canadian, but not dollars. Silverware and everything flew in 79/80.
If there is a premium for junk silver, it will not get melted but promoted to investors.
There is a glut of 90% US Y2K bags that were sold in 1999 for $5000 and up, which you can currently buy under $4000.
Silver dollars (especially US, but also Canadian) are not likely to be melted but traded in bag form.
Other 80/90% junk might get thrown in the smelter when/if silver gets to $15, but it doesn't make sense at $5, when the smelter might charge 50 cents an ounce.
Also, remember back in 79/80 there was such a backlog at the refiners that 80/90% coinage was being bought at well BELOW spot (At $50 silver, a bag melts for $35K, and you would be lucky to get $25k for it)
My conclusion(s):
If silver coinage got to a 50%+ premium to spot I would swap it for silver bullion (objective: lock-in premium)
-OR-
if silver got over $15 I would swap coinage for bullion (objective: maintain liquidity)
At current prices and premiums, however, both you and Alan are doing the right thing picking up what you can near melt. |
