Are bullion traders really sending generic US gold to the melting pot?

[shirohniichan]

After reading this article about generic US gold coin premiums shrinking to zero , I am still not convinced lots of double eagles, eagles, etc are hitting the melting pot right now.

 

Even if currently there is no premium on, for example, a 1904 double eagle in EF, does that mean that it and similar coins are being melted? Wouldn't the potential return of a premium to generic US gold coins hold bullion traders to consigning them to oblivion?

 

I'd think generic bullion bars and scrap gold would be first to be melted should an industrial or artistic need for gold arise.

[BillJones]

I can see melting the common modern commemorative gold coins. That has been going on for a very long time, even before the current huge increases in the price gold bullion.

 

Melting the "old" gold coins seems silly to me, but many bullion dealers are not numismatists. Currently these coins have no numismatic value because the price of gold bullion is so high, but that could change, and I think that there is good chance that it will. Gold will either fall in price, or the U.S. dollar will be zapped by inflation which might make the current gold prices not look that high. Of course if the more people flee the dollar, gold will only increase in price.

 

Either way, if I had a big cash for low grade old U.S. gold coins, I would not melt them. But I'm coin collector (actually I hope a numismatist in most people's opinion), and for that reason I wouldn't melt them.

[FishyOne]

I hope classic U.S. gold is not being melted, but I'm sure some is.

 

Thinking about all the cleaned, polished, damaged pieces out there? Yeah, some are being melted.

[mkman123]

I believe some of these places that have signs saying they buy gold may be sending old gold coins to be melted. All they care abt is profit

[BillJones]

One more comment for would be melters.

 

The sales tax laws in many states give U.S. coins a leg up on bullion. Here in Florida there is no sales tax on U.S. coins. For bullion one must buy a minimum amount to avoid the tax. Similar laws that give coins an advantage exist in other states.

[shirohniichan]

I hope classic U.S. gold is not being melted, but I'm sure some is.

 

Thinking about all the cleaned, polished, damaged pieces out there? Yeah, some are being melted.

 

I'd think that damaged pieces could be used for jewelry purposes, but there probably isn't a huge demand for Coronet Head eagle, half-eagle, and quarter-eagle pendants (even though my grandmother used to have a 1907 quarter-eagle pendant)..

[coinman_23885]

If common date gold is melted, then I wonder if demand will ever exceed the supply causing the prices to increase significantly above their precious metal content.

[BillJones]

If common date gold is melted, then I wonder if demand will ever exceed the supply causing the prices to increase significantly above their precious metal content.

 

It has done that many times in the past. So-called "widget gold" has had periods where it sold for many times its melt value when it was MS-64 and most especially MS-65. The circulated pieces have always been "quiet" for the most part because the Mint State pieces were always around.

 

Years ago I traded a common date Liberty $5 gold in MS-64 and not that much cash for a 1794 half dime in AU-50. Today the half dime is WAY ahead of the "widget" $5 gold coin in MS-64.

[shorecoll]

There are literally tens or hundreds of thousands (maybe millions) of common date US gold coins in Europe. Several dealers have made good money picking through them for better grades but the bulk of the low-rent ones are still there. It would actually help collectors if that stuff got melted (and maybe it already has been).

[coinman_23885]

If common date gold is melted, then I wonder if demand will ever exceed the supply causing the prices to increase significantly above their precious metal content.

 

Years ago I traded a common date Liberty $5 gold in MS-64 and not that much cash for a 1794 half dime in AU-50. Today the half dime is WAY ahead of the "widget" $5 gold coin in MS-64.

 

I hope this happens again!

[PerryHall]

There are literally tens or hundreds of thousands (maybe millions) of common date US gold coins in Europe. Several dealers have made good money picking through them for better grades but the bulk of the low-rent ones are still there. It would actually help collectors if that stuff got melted (and maybe it already has been).

 

Could you please explain how the destruction of these coins helps collectors?

[coinman_23885]

There are literally tens or hundreds of thousands (maybe millions) of common date US gold coins in Europe. Several dealers have made good money picking through them for better grades but the bulk of the low-rent ones are still there. It would actually help collectors if that stuff got melted (and maybe it already has been).

 

Could you please explain how the destruction of these coins helps collectors?

 

I am assuming (without stating an opinion either way on the matter) he is meaning that it is good news for coin collectors who may have hoards of generic gold lying around. The coins can be converted to cash to buy other things; however, at that point (where rarity/scarcity is created by melting), you would think a collector would want to hold onto the coins.