Does the Yad for reading Torah has the status of tashmish mitzvah or tashmish kedusha? Background to the question: Our shul has a BIG yad in extremely bad shape. Impossible to fix anymore. It is sterling silver. Can the shul give it as a gift to the gentleman who has done all sorts of Torah accoutrements (yad, crown, breastplate) fixings for us for free in the past ten years? Gentleman is not Jewish, would probably melt the silver.
The Aruch Hashulchan (154:5) (as cited here) writes that technically a yad would not have been considered a tashmish kedusha if that had been its sole function. However, the custom is (and was) to also hang it from the Torah as a decoration. Therefore, it is considered a tashmish kedusha with all the attendant restrictions, such as requiring "sheimos geniza" as well as a prohibition banning it's use for a less sacred function. Since I assume this was also the case with the silver Yad you describe, it seems pretty clear the Aruch Hashulchan would prohibit your suggestion. But, as usual, AYLOR.
והעצים או עצם שעושים כמין יד, להראות להקורא מקום הקריאה של חובת היום – אין בהם אף קדושת בית הכנסת, שאינן לא לנוי ולא למלבוש רק לסימן בעלמא. ולכן אין עושים מהכלונסאות שתולים בהם הפרוכת היד הלזו, שאין מורידין אותם מקדושתן, וה"יד" מקרי ירידה נגדם. ונראה דזהו אם אין תולין היד על הספר תורה. אבל אצלינו שתולין אותה על הספר תורה לנוי, יש לומר דהיא נקראת "תשמיש קדושה" וגדולה מקדושת הכלונסאות.
Wooden sticks or bone that is fashioned as pointers to indicate to the reader the place of the obligated reading of the day does not have even the sanctity of a synagogue since they are neither intended as an ornament or dressing, just as an indicator. Therefore, one may not fashion this "Yad" from the poles that held up the parochet, for it is forbidden to demote them from their sanctity, and the "Yad" is considered a demotion relative to them. But this appears to only be the case if the "Yad" is not hung for the Torah scroll. However, in our communities where we hang it on the Torah scorll as an ornament, one could say that it is considered a tashmish kedusha, and even a greater sanctity than the (parochet-supporting) poles.
This article, 1st paragraph says:
Tashmishei kedushah are objects which serve a holy object (such as a Sefer Torah), They contain a holy object or cover it and are in immediate contact with it. The law of tashmishei kedushah applies even to objects which are used more to protect than to show respect for a holy object (e.g. the ark in which a Sefer Torah and other sacred writings are placed, even if they are printed rather than handwritten by a scribe. According to most poskim, sacred texts that are printed have a sanctity comparable to the handwritten text.). Ornaments that are placed upon a Sefer Torah are also considered tashmishei kedushah even though they do not actually touch the Sefer Torah itself.
I have bolded the 2 sentences that I consider most relevant to your question. The yad both serves the usage of reading the Torah and is an ornament. Based on this definition, the next paragraph in that article states:
Tashmishei kedushah that are worn out and unsuitable for further use must be put aside in a safe place. It is forbidden to use them for any other purpose and it is forbidden to burn them. The prohibition to burn them is implied in the verse "Do not do so to Hashem, our G-d.” In contrast, tashmishei mitzvah do not have kedushah after the mitzvah has been done.
Thus, in short, no, you can't have the Gentile melt it down.
The rulings regarding Tashmishei Mitzvah & Kedusha as well as a list are mentioned in Talmud Megilah 26b. The yad is not listed, there, as it was a much later invention.