What is melt value?
Melt value answers one question: if this item were melted down today, what would the metal be worth? Multiply the metal weight by the fineness and the current spot price, and you have it.
A one-ounce Gold Eagle, though 22-karat, contains a full troy ounce of gold, so its melt value is the spot price of gold. A pre-1965 U.S. silver dime contains about 0.0723 troy ounces of silver.
Why does melt value matter to a buyer?
It is the great equalizer. Every product, bullion coin, bar, 'exclusive' proof, inherited silverware, reduces to the same denominator. Whatever a salesperson says about rarity, melt value tells you what the metal itself is worth.
The gap between a quoted price and melt value is the total markup you're being asked to pay. On bullion that gap should be a modest premium; on heavily marketed products it can be 30% or more.
How does melt value show up in practice?
Before buying, calculate melt value yourself: weight times fineness times the spot price you can look up in ten seconds. If a dealer won't give you the weight and fineness needed to do that math, the price is the message.