Silver Meltdown

Bloomberg has a good article on the high spot price of silver and gold and the large quantities of decorative items that are being melted down due to the high intrinsic value.  As I write this post silver is trading at over $38.73 per ounce on the spot market.  As the Bloomberg article reports, the high price of the metal is contributing to a large loss of fine quality silver as the value of silver in many cases now is higher than the collector value.

I reported on this topic just a short while ago (click HERE to read a May, 2011 post on silver prices and melting), and then silver saw approximately a 25% downward adjustment, but the price has been slowly working its way back up from the earlier adjustment, and the melting of some great antique and vintage silver continues.

Bloomberg reports on the melting of silver

Antique jewelry is being thrown into furnaces as sellers forgo the uncertainty of auctions for a quick cash sale from metal dealers. Auction houses are having to pay more attention to melt prices as speculators watch for lots that can be snapped up below their scrap value.

Countless 18th- and 19th-century boxes, candlesticks and salvers have already been lost forever, with collectors saying that even more valuable Georgian and Victorian pieces are in danger. Gold has gained about 17 percent to records this year, with David Hightower of the Hightower Report saying prices may drop to $1,600 an ounce before resuming a climb to $1,730. While silver is down from its all-time high of $49.79 an ounce on April 25, it has doubled in the last year.

“Over the last 18 months, we’ve had more people asking the weight of lots,” said Jo Langston, Christie’s International’s head of portrait miniatures and gold boxes. “They’re looking to see if it’s more economical to buy a box rather than an ingot. We would never sell an item for less than its melt value, though.”

At the precious-metals dealer 375 Live Ltd. in the Hatton Garden district of London, plastic dustbins are filled with tankards, teapots and cutlery.

To read the full Bloomberg article, click HERE.