Buying Sterling Silver to Melt into Bullion
Believe it or not, buying sterling silver to melt into bullion is actually a thriving culture. With silver over $30 an ounce, it’s not a shock that people are out at thrift stores and estate sales looking for silver to scrap.
So whats the deal with Sterling silver?
Sterling silver is commonly 92.5% pure silver, and as such is marked with a “925” symbol on the piece. There are other purity silvers and it is common for them to be stamped with their purity, but there are some things to be warned about (covered later).
So how does this exactly work?
It’s actually fairly simple, and it should be considered how long coin minting has been in action.
Step #1 – Find a bunch of silver
Yard Sales, estate sales, thrift stores, or pawnshops. Anywhere you can find it a good price. Check the spot price via google finance or yahoo finance. Be sure to discount it for it’s purity (92.5% for example) and for your time. If you are paying 80% spot, it might not be worth your time unless you can get it in GIANT quantities. You are better offer looking for high margin but more infrequent transactions.
eBay sells a ton of scrap silver, but it’s rarely cheap enough to act on in my opinion. You maybe able to sneak a few deals out of it though.
Step #2 – Melt it down in a crucible with a torch or kiln furnace (Disclaimer: Never do either process ever. I am not advocating this processing, nor am I an expert in this field. Consult a professional and never attempt yourself.)
Step #3 – Refine it with needed agents (borax is commonly used, again if you are serious about trying this, consult a professional.)
Step #4 – Poor it into a mold (typically graphite or stainsteel)
Step #5 – Polish it and sell/store it.
Yup it’s that blunt of a process. Now of course you can stamp your silver and even buy custom molds to add to the fun
What should I be warned about when Buying Sterling Silver to Melt into Bullion?
- Markers marks for item #. You might see x869 and think it’s 86.9% pure, but it might be piece number 869.
- Cement filled pieces. Yes that’s right, that 2lb candlestick is not solid silver! A cement polymer is often used to fill sterling silver.
- Actually refining silver is a process that is probably best left to the experts, although that doesn’t stop a lot of people from trying.
But you know what? I don’t think all of this is worth the time.
The biggest reason why I don’t think it is worth the time, is that scrap silver sells for about 85% spot value on eBay. No crucibles, no molds, no energy costs, no borax, no misc tools. You just take your scrap sterling silver and presto, 85% spot. Ultimately I view this as a craft/hobby. If you enjoy making homemade bullion, then maybe it would be worth it. I am just doubtful that there is an actual financial net gain.
Final note, I think that because of silver prices.. quality sterling silver silverware is going to be more and more rare. I think you might get a better return just keeping full sets than melting them down. Hold on to that set, you will always have the option to melt it down later.
Like this post? Subscribe to my RSS feed and get loads more!