Why is sterling silver priced less than coin silver?

Why is sterling silver always priced less than coin silver in numismatic circles?

It took me quite a long time to "get this" in my tired old head so what about you'all?

Dealers and silver buyers always pay less (sometimes way less) for 92.5% silver than coin silver which is 90% - do you know why???

I will tell you why at the end of this week.

 

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I've noticed the same thing, but I don't know why, so I'm looking forward to the explanation.

 

Sterling Silver is made from Sterlings. Coin Silver is made from Coins. Sterlings are much easier to find and melt. Coins keep getting away. :goof:
Actually I never heard that before.

 

LOL I like that Carl, it would depend on the purity of the silver used I suppose, sterling is .925 what are the coins you have seen? then you have to take into account the coin itself, is it rare a special design etc.

 

No I'm talking about .925 verses .900

No I'm talking about .925 verses .900 silver.
Where we are in the south (and I assume everywhere) every dealer prices .925 lower than .900 every time - this always confused me so it took awhile for me to "get it" - now I know. That is the question.
Any given pile of .925 silver (not coin but sometimes that to) and .900 U.S. coin silver - the bid or offer wholesale and retail for the most part is always lower for the .925 than the .900.
Why???

 

I'm new and this is a guess -- but could it be because the coin can be resold to anyone as-is ... while the Sterling must be authenticated and processed, and is not as easily resold by a dealer?

 

I agree with Billincolo.

 

yup, agreed, a higher premium for the coins, as collectibles, and they are easier to re-sell to collectors.

 

Coins contain silver and copper, sterling is silver, copper and various other alloys. My guess it has to do with the refining process to get the other alloys out of the silver.

 

US Coin silver is manufactured and alloyed within very strict tolerances. Therefore in most applications it does not have to be refined. You can drop coin silver straight into the melting pot and add refined metals (which could be additional pure silver) to produce the alloy needed.

 

I would guess its down to ignorance on the part of a large proportion of buyers/sellers as well as the lower desirability of non-US coins in American in general. Even the price of 'junk' silver has certain numismatic value in addition to intrinsic....

 

PS. Who are these American dealers selling sterling for less than US$ 90%? I'd love to buy some stuff off them...

 

Maybe the supply of sterling silver is far greater than that of silver coins?

 

That's what I was thinking...:high5:

 

My swag

For the same reason that a known gold coin (Maple leaf, K-Rand, Eagle, etc) will trade higher than unknown gold bars. The coins are readily authenticated and the contents are known. An unknown gold bar is not easily authenticated & its contents could ruin your melt.

 

I acreeditied it to the fact that people in Tennesse are dumbe hill billies. Southern Gentelman like myself form Alabama would never do such as that. So it is not a "southern" thing. If you decided to head south for the football game this year pm me and we can have a beer at the houndstooth.


In all seriousness though I posted this same question in the bullion thread. A lot of times on e-bay you can buy sterling at a discount even at an adjusted price per gram ratio. I know a lot of people that will only buy .999 bullion because the "don't know what that 7.5% is"

 

okay, BHP:
What is your answer?

 

sterling silver discount

The reason for a discount to spot price for the silver contained in Sterling, and silver coins is due to several reasons:

1) Even though it is marked "925" or "ster" or "sterling" it doesn't not authenticate the purity. There are exceptions to this. Well known mints, jewelers, and silversmiths need to maintain a reputation, so that their products have a solid value. In these instances, buying Gorham silverware, Franklin Mint products, or the like, should carry a premium to buying a product simply marked "sterling" or "925" without a name associated with it.

2) continuing in this line of reasoning, the genericly marked products could very well NOT be sterling. I have evidence of this with a necklace that was only marked, "925" on it. It is actually a copper necklace with silver coating. I dipped it in acid to remove the coating and can post pictures of it if anyone is curious. So, there is also a risk involved in buying these products which needs to be accounted for in the price paid for them.

3) Unless it is a usable piece, the sterling silver is simply junk metal. And in order for it to be fully tradeable, it must either be a usable product, or refined to industry standards. In order to do this, value added processes must be performed, and these costs are built into the "sterling buy price." For example, you buy 10.81 troy ounces of sterling scrap and pay $160 for it. It then will need to be processed and refined to .999 fine silver. This may cost you 10% of the actual silver content value, plus a $25 assay fee. Your total cost for this would be $41, and you would end up with an assayed 10 troy ounce piece of .999 fine silver, worth spot silver (today that is $163.00) However, you have costs of $41, so your net asset value is only $122. i.e., you lost $38 on the deal. But if you bought that scrap sterling for $120, then you gained $2 on the deal.

4) coins are easily recognizable and records show that there has never been an instance of the Philadelphia mint producing a 90% coin out of purity tolerance. So, the purity of a US coin is virtually guaranteed. This makes coins fully tradeable on their weight. Incidentally, "coin silver" does not only mean silver from or in coins. "Coin Silver" is generally used to describe the alloy of 90% silver and 10% copper, and can be used to describe silverware of any type.

Because of these factors and differences, coins will always retain a higher trade value. But in an environment where refining costs are not involved, sterling silver of the same weight is obviously worth more when it comes to melt value.

 

For this question, are we to assume that you are comparing 1oz of 0.925 silver to 1oz of 0.900 silver?

Because if that is the case, then isn't the price determined by the ASW of the coin and not just the fineness of the silver?