Don't know if this thread is meant for this forum, but since CRH'g is mostly about silver, can someone explain the difference in terminology of: SPOT , vs MELT, when talking about the pricing & selling of silver coin? Comments please & thanks.
"Spot" is the market price of silver, per ounce, when delivered in standard "good delivery" bars (about 1000 troy ounces). Some will say that "melt" is what you'll get for silver coin with no additional numismatic value, incorporating any premium that 90% is getting or any discount for 35% or 40%. In practice, the two terms seem to be used interchangeably, at least around here.
I agree. Both terms are in reality different, but here they appear to mean today's cash market for bullion times the quantity of bullion in the coin.
I sent exactly 1 pound of sterling to a refinery (picture was taken). I expected about $295..I got $130. Why. I believe spot is what is listed on websites; and, melt price is the amount of actual sterling after melting it. Old silver (before 1978, I was told) the Karat was simply guessed and not verified as the actual karat quality. Therefore old sterling Karats are considered inferior as to how much precious metal was actual there until it was melted. (This is the same for gold, and other metals that require markings.)
I was going to weigh in on definitions, but I have nothing to add to what I said five years ago. I will say that sterling always "melts" at a discount, partly because that 7.5% that isn't silver can be lots of different things, making it harder to refine. But a refinery that pays less than half the value of the actual silver content may just be ripping you off.
The terms have become interchangeable but SPOT is the price of .999 silver where MELT is the price you will get for that silver. Melt is lower because coins are not .999, they are 90% or less. Then there is Sterling Silver which is .925.
Okay, I had to go off and do a quick survey. APMEX says: "Melt value simply refers to the spot price of the actual Precious Metal content of a given piece." Provident says: "For this reason, the coin melt value is calculated by the content of a precious metal multiplied by the spot price of said metal." NGC says: "This page shows the intrinsic metal values of U.S. Silver Coins, commonly referred to as their melt values." I looked a bit more, but didn't find anyone disagreeing with these definitions. Essentially: SPOT is the actual market price of a precious metal. MELT is the market price of the PM contained in a particular coin (or group of coins). Everybody who's buying and selling PMs wants to make money at it, so their sell price will be higher than their buy price. But both of those are based off melt value, with some adjustments for supply and demand. Right?
Sure. I kinda, mostly agree with Sakata from 5 years ago. Some what. If one sells directly to a refinery one will get the most $$. If one sells to a middle man to a refinery, one may lose more than half. Keep in mind they also have to verify the content related to their bulk refining costs.
Basically agree. Spot is the current cash market price for the commodity that day. "Melt value" can be used as the value of the pm in the item, (quantity of pure pm times spot price). I agree with you if people never use "melt value" to mean what a refinery would pay you. Like you said, everyone needs to make a profit, and it costs money both to refine metals, cast into commercially acceptable ingots, then ship to a buyer of said ingots to even ACHIEVE spot price. So, a refiner by definition needs to be quite a bit back of melt value in order to cover costs and still make a profit. This is why even refiners directly might only pay you 60% of melt for old sterling silver items because sterling is more expensive to refine. They may pay 80% for 90%, and 90% for .999 stuff, (just making up example numbers from previous history, no idea where the market is today). So, as long as everyone understands you will NEVER be able to sell for melt value to a refiner,, (unless its an item the refiner will resell as is, like a bag of morgans), I agree with your post. I recently had a disagreement on Reddit with a guy who informed me why all coins are "always" worth more than melt when selling back to a dealer. He said he has been doing this for two (whole) years, and its always been that way. I gave him periods where this is true, periods where its not true, and spent many paragraphs explaining the market to him. His reply? "All I can say is...its 2022". You can't fix stupid or teach people who refuse to learn. I guaranteed him sometime in the next 5 years that will no longer be true, and good luck in life. I like teaching, but a snarky youngster on reddit exceeded that desire.
