Coin Collectors Melting Coins For Precious Metal Value

As you may be aware, the prices for both gold and silver have skyrocketed over the past few years, reaching record high levels. Coin dealers, jewelry stores, and pawn shops are all doing brisk business in buying gold and silver coins from collectors looking to cash in. Many of the gold and silver coins they take in are melted down for their precious metal content.

One advantage to melting down old coins that the pure bullion is much easier to sell than trying to sell the coins themselves to a narrower market of coin collectors. In many cases, the precious metal value of the coin surpasses its value to coin collectors. This is particularly true in cases where the coin is in poor physical condition, making its collectible value low. However, the metal content of the coin is still worth something.

As a result of soaring precious metal markets, the metal in U.S. nickels and pennies is now worth more than the coin's face value. A cent, comprised mainly of zinc, has a scrap metal value of around 1.1 cent, while a nickel (75% copper and 25% nickel) is worth almost 7 cents. As of 2006, it is now illegal to melt down pennies and nickels for their metal content. However, it remains legal to melt other coins containing gold or silver.

Which coins contain precious metals? In the United States, gold coins were in standard circulation until 1933, when other metals replaced gold. Silver coins were produced through 1964, and are still commonly found in pocket change and cash registers across the nation. It is legal to melt down these silver dollars, half dollars, quarters, and dimes for their precious metal content. There are also a number of foreign coins that contain gold, silver, or other precious metals.

The melt value of older coins – in particular, those containing gold or silver – is frequently many times the face value of the coin. For example, a 1942-1945 nickel has a silver value approaching $2. The 1971-1976 Eisenhower Dollar (40% silver) is worth more than $10 in silver content, despite its face value of $1. Meanwhile, a 1849-1854 Liberty Gold Dollar has a face value of $1.00, but a gold value of $80 or higher. If you are interested in investing in coins for their precious metal content, it's best to focus on those containing high percentages of gold or silver, but which are relatively common and therefore don't command a premium when sold to coin collectors.

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As a coin collector, your collection's value may benefit from the melting of precious metal coins even if you don't partake in the practice. This mass melting of U.S. coinage is said to increase the value of the remaining coins. The melting of thousands of coins increases the scarcity of those remaining, driving up their value.

Collecting Gold and Precious Metal Coins

Are you a coin collector who hopes to someday profit from your collection? If so, consider investing in coins that contain precious metals, such as solid gold coins, also known as bullion. It is now easier than ever to trade in precious metals. With the markets for gold and other precious metals approaching all-time highs, thousands of coin collectors have already cashed in their precious metal coins. Many investors expect the markets to continue climbing, making now an excellent time to invest in gold coins.

There are many ways to purchase precious metals for investment. Some gold coins are better investments than others. For example, gold bullion coins or bars are 24k, 99.99% gold. If your main purpose is buying gold as an investment, buy generic gold bullion bars and ingots, which have a guaranteed metal content. The market for modern bullion has flourished since 1974, when Americans were once again permitted to invest in gold bullion.

Generally speaking, the price of such bullion bars and rounds is dictated by the spot price of the metal. Unlike other coins, the price is not determined by rarity, grade, or other collectible factors. Bullion bars enjoy great liquidity, which makes them attractive to investors whose eventual goal is selling their precious metal investment at a profit.

If you prefer collecting beautiful coins that also have the long-term investment potential of gold,
Collector coins do not always have the same high percentage of gold content as gold bullion; if you plan to invest in these for the metal content, pay attention to the percentage they contain. Opt for numismatic coins such as the popular American Eagles, Gold Buffalo, or Canadian Maple Leafs. These have a standard precious metal content, and benefit from increased collectability because each minting of a particular coin is done in a fixed supply. The precious metals in them will always be worth bullion value, but the fact that the bullion is stored in a coin that is popular among coin collectors will increase its value. These coins will only grow rarer and more sought-after over time, though much of their value will still be based on the spot price of the metal contained in the coin. To invest in either gold coins or bullion, it is critical to pay attention to the spot price of the metal.

Finally, there are numismatic coins minted prior to 1933 that contain precious metals. These were not minted for collectors, but rather as everyday currency. While many of them do contain a high level of precious metal, they are valued primarily for their numismatic value, rather than the value of the metal contained in the coin. In such cases, the value is significantly affected by the condition or grade of the coin, and it is particularly important to pay attention to the quality of the coin's appearance. When buying or selling such coins, expect the price to be above – and in many cases, substantially above –  the spot price for the previous metal it contains.