Tuesday, October 24, 2006

I'm Still Saving U.S. Nickel Coins

Back on April 6, 2006 I wrote that I was saving all of the U.S. nickels I acquire in change because the melt value of nickels was about 4.24936 cents, or 84.98% of the 5-cent face value ofthe U.S. nickel coin. Almost all U.S. nickel coins made between 1938 and 2006 contain 75% copper and 25% nickel (the exception was during 1942-1945 when almost all nickels contained silver and manganese instead of nickel). At the time of my previous post, nickel was trading at $7.7564 per pound and copper was trading at $2.6112 per pound.

It's a good thing that I've been saving nickels because the value of nickel and copper has soared since April. One pound of nickel is now worth $15.4909, nearly twice what it was a mere 6 months ago. Copper has risen a slightly less impressive 31%, with one pound of copper now trading for $3.4302 per pound. The melt value of U.S. nickel coins is now about 7.10471 cents, or 142.09% of its 5 cent face value. The melt value of U.S. nickel coins has therefore risen about 67% since April.

If the value of copper and nickel remains strong, it's only a matter of time until everyone starts hoarding U.S. nickel coins, just like the U.S. population did in the 1960 when quarters used to be made of silver and the price of silver rose so much that the value of the silver in quarters exceeded the 25-cent face value of the quarters. Accordingly, I continue to recommend that people saved their nickels.

FYI, numismatic news has a great article about hording coins.


Lazy Man and Money said...

I read that a penny was worth more melted-down than it's currency value. Is that still true? If so, should we hold onto our pennies as well?

Jim said...

Yes, save all of your pennies from the years 1981 and earlier. I wrote a post about that here:

If you go to www.coinflation.com you can see what the melt values are for various U.S. coins in circulation.

Patrick said...

Gresham's law in action! A link to "What Has Government Done to Our Money?" is appropriate here. :)

Anonymous said...

How many nickels weigh one pound?
Are you aware of any companies buying nickels to melt down for the metal value? Thanks.

Jim said...

Anonymous (12/29/2006), the U.S. Mint recently banned the melting of nickel coins, as I discussed in this post:

According to this website, http://www.coinfacts.com/nickels/jefferson_nickels/jefferson_nickels.html, nickel coins weigh 5 grams. There are about 454 grams in a pound. So there are just under 91 nickels in one pound.