Morgans At Spot or Below, on eBay

The posting of web links doesn't interest me as anyone can find a web link to say anything. It's what people do who can't make a logical argument on their own to support a position.

With that said, the very link you posted also disproves your claim that "melt value varies by locale & business". It very specifically defines what it means.

 

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Nobody owns definitions. Common usage here is that melt value is calculated at the spot price with no deduction for refining. Others may differ but must realize that clarification will be needed to carry on a conversation. Intrinsic value for, say, silver would be something slightly above cost of production by my definition. The spot price is just the price, not the intrinsic value.

 

I can't think of a refiner or coin dealer out there that doesn't use the current spot price as a basis for pricing. Maybe they exist, but my advice is to stay away if you are selling and look for bargains if you are buying. (though you should know how to determine if it is real)

 

I'm 12 and what is this?
Note: not akshully 12...
http://knowyourmeme.com/memes/im-twelve-years-old-and-what-is-this

 

i was just mentioning how ive never seen morgan dollars go below their silver price and was surprised.
how is the intrinsic value different from its silver melt value?? it is the same thing. if you ask somebody what melt is on an item they will give you the actual cost of the items metal value, which equals its intrinsic value.... the same thing. sure there is bid and ask, but how does that change the melt value of a coin? that is just what some dealers are willing to pay and buy at

 

when buying coins for silver value i will lose 20 to 50 auctions per buy,but i personally would rather buy a coin that has real value.

 

yeah but this is the bullion section. ostensibly we're talking about inherent silver value of morgans. their extra value is because of their recognizability

 

I don't know why anyone would pay a premium for cull Morgans anyway. Here in Columbus, the price is 7% to 8% higher for a junk-silver Morgan, per adjusted Troy ounce, compared to four silver quarters, and as we have discussed before, why buy something it's hard to make change for??

I am taking into account the fact that one silver dollar contains 6.9% more silver than four quarters. Do I need to belabor the fact that down the line, if you buy something that costs one silver quarter, pay with a silver dollar, and receive three silver quarters in change, that you're getting cheated big-time??

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A year ago, I made contact with a dozen silver sellers on the local CraigsList, and finally selected one who's honest and reasonable, and I'm still buying from him. No postage, no sales tax, man comes directly to my bank, often I can select the coins I want (therefore, no slicks) if I spend over $300. Anyone who lives in a major metro area, should forget about trying to buy silver on eBay. Be patient, you'll find a seller like mine.

 

I find it useful to think of silver in three dimensions.
- The market price for whatever you are buying
- The spot price / melt value
- The intrinsic value which is something slightly above the cost of production

This breakdown avoids the error of thinking that price=value, and avoids the error of thinking that the current spot price = value. Market price and spot price are exactly that -- current market prices. Intrinsic value is something different to me, and is the amount which PMs are unlikely to go and stay because it becomes economically unfeasible to produce them. But everyone can define it anyway they want.

 

"Melt" is what a refiner (melter) pays; it's confused & misleading to conflate that with the Spot Price, common parlance (corruption) notwithstanding. Back to the example above: when POS is $33., Dealer's Bid "20-25 on junk" looks like a true Melt-rate (17%-20% Under Spot) for junk. http://www.cointalk.com/t216851/#post1586281 My LCS/bullionist cites something similar, and his rep is impeccable.

I can only guess that very few Morgans bought "at melt" (whatever the dealer's BID: NOT the refiner's) actually get melted. Morgans "extra value is because of their recognizability" as FryDaddyJr notes. So too the active trade proves marginal numismatic value for the coin persists, whereas true junk/scrap now GETS melted. Rising POS (@ $60 ozt, say) might radically change this situation in the near future, however. In recent years, refiners often paid/pay (BID) -15% > -20% below Spot. Of course, in any supply/demand situation, this is subject-to-change: Seller may get closer to Spot in certain circumstances. See for example, this 10% Under Spot offer:
http://www.midwestrefineries.com/

Ask a local refiner for his rate. I haven't seen a price-record for refiners' Melt, but like Dealer premiums, that's a real market valuation or intrinsic price for your Silver. A middleman will give you his price, accordingly.
As always, shop around for the highest Bid, etc.

Real "melt" is germane/relevant only to dealers melting; the term obviously confuses retail trade, so it should be avoided. If whatever is NOT to be destroyed, but getting flipped for more instead, industrial Melt is essentially moot (if not distracting) to the selling public. The price (Bid/Ask) is whatever a buyer & seller agree to ; likewise (theoretically) market price aggregates all sales of whatever. eBay is very useful to see/approximate market price, admitting the Seller is also paying ~13% in fees to eBay/PayPal. If s/he could get more at the local refiner, why wouldn't s/he? Answer: s/he cannot. Even loser auctions are almost always over Melt. This particular retail market is efficient, but I'm not denying CL can be much better price-wise for both parties. (We cannot see that, however, to judge.)

 

Well-said...

M&M's melt; coins flip.

 

I agree. The way I think about it, coinage is one of the best and highest uses for silver, so there is no need to take a haircut on melt value when valuing silver coins. In fact, a case could be made that all coin silver should sell for a slight premium due to the guaranteed weight and purity.

 

I'd say this is a fallacy. At best you get an eBay price. Nothing more, nothing less. If you don't use eBay, and a lot of people don't, then it's meaningless.

Market prices are always local to where the item is being sold. This is why the spot price is used globally as a basis for setting said market.

 

I don't know if market price is a single number. Ebay attracts a different set of customers, involves shipping cost, makes it easier to buy, and doesn't permit a person to handle the merchandise prior to sale. Coin shops make it easier to examine merchandise, build relationships, and obtain advice. It would be strange if the two sales venues had identical pricing.

 

I like circulated and AU Morgans that I can get close to spot. I don't do the expensive ones. I figure eventually enough will have been melted down that they'll get less abundant, and they'll all have premiums on a long enough timeline.

 

not in our lifetimes.

 

AU is an excellent grade to collect, but I never see them close to spot.

 

"I figure eventually enough will have been melted down that they'll get less abundant"
"not in our lifetimes."

I'd guess the vast majority (>90%?) of junk/cull Morgans still flip. But I'm curious to hear other's opinion: what ballpark %age of cull Morgan have been melted, since Ag went from $14. > $32.?
If it's few until now, (going forward) at what price range does the melting really start? $45.-60. circa 2018?

Presume it will be industrial demand, rather than 'investment Silver' whereas, today's scrap Gold is probably 'investment Gold.' That's how I read the Weekend FT article on Turkey's exploding Gold trade w/ Iran.
http://www.ft.com/intl/cms/s/0/e1b320ba-3b16-11e2-b111-00144feabdc0.html#axzz2ENedORzh