When it comes to measuring investments for gold bars, coins, one of the topics that usually comes into play is the melt value. Yes, melt value is not the only way you can measure the value of gold investment, but needless to say, it is an important metric any investor must understand.
If you are a new investor, there are a lot of terms you need to understand to be able to get a good grasp of what you can expect from this type of investment. Melt value whether it is for gold bullion or coin can greatly impact your investment, hence, you have to know this before you finally invest your hard earned money to precious metals.
This article will discuss more about melt value and what to expect from it.
The term used is a bit obvious, as this means the value of the metal, gold, silver, etc., after it was melted.
When the gold is melted, the market value changes. For instance, in gold coins, once it is melted, you cannot count the rareness of the coin, its condition and also, its provenance. Same as with the pieces of jewelry, once it is melted, you cannot count on its value the beauty and the artistry of a ring, necklace, etc.
All the aspects mentioned above will all be gone once the gold or any precious metal so to speak is melted.
How To Determine Gold’s Value
Once the gold is melted, the next thing you need to know is how to determine its value now that the gold has changed its appearance and becomes melted. You can actually measure the value of the melted gold by knowing the amount of gold in it, and also, the gold’s current value in the market,
Say for instance, a one-ounce gold coin contains 25% gold, meaning, once it is melted, you will get one fourth of one-ounce gold from it.
The value of gold per ounce from the year 2021 was at $1800, so if you will compute, the value of the coin after being melted was $450.
Face Value and Numismatic Value Compared To Melt Value
There are many reasons why most people tend to keep their gold coin instead of melting them, and some of which are the following:
Limited Coin Production Run
If the coin exists only in a very small number because they were minted at a limited time, then expect that its value is higher and more so if it is uncirculated, making its condition pristine. Coins depreciate its value depending on its condition, the more pristine the condition of the coin, the more expensive it gets.
Gold Coins That Have Errors While Minting
Coins that were minted wrongfully, may it be because of its thickness, stamp, features etc., have higher value compared to those that were minted perfectly.
Coins That Are Part Of The History
A coin that showcases a nation’s history will come at a higher value compared to its real gold value when melted.
Sometimes, it is the face value of the coin that is higher than its gold content, so make sure this is considered when deciding.