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Money flows into Morgan silver dollars

This article was originally printed in Numismatic News

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The past month the coin market has been dominated by precious metals, especially silver with a near parabolic rise to just under $50 followed by a 30 percent correction. Much of this was speculation as the silver to gold ratio went from 40 to 1 down to 30 to 1. I suspect before this bull goes to slaughter we will again see this type of action.

The coin market is a smaller market. It is far less manipulated by speculators and wild rumors. Ironically, because it is smaller it is indicative of real value because it requires a lot of work to manipulate and big speculators are not interested in markets where they can’t invest multi-millions at a time.

2012 U.S. Coin Digest

2012 U.S. Coin Digest

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The greatest action has been in both Morgan and Peace dollars and the leader has been ironically the more common 1921 Morgan dollar. One West Coast buyer purportedly has been trying to assemble one million coins. Now not to say the other Morgan dollars were lagging, but the 1921 is almost on par with the less common earlier dates. Peace dollars have participated very strongly as well achieving prices nearly equal to their older sisters again somewhat contrary to actual relative scarcity. Mint State dollars of both series have soared after many years of near stagnant prices. MS-62 and MS-63 dollars have virtually doubled in value and the MS-64 and MS-65 coins have added better than 60 percent to their price tags.

The real value today lies in those issues where a premium of 10-40 percent once existed and now they are at or near par with the more common issues. There is also extremely good value to be had in better date issues where they were once double or triple common-date Mint State issues and now may be as little as a 30-50 percent premium.

One could also apply this same rationale to many of the Mint State U.S. gold type coins, where one can find $20 Saint-Gaudens graded MS-62 at near 10 percent over bullion value. The real trick in this area of the market is to find the mintmarked or earlier dates at just a little more premium. These items will often represent a scarcity of 50 or 100 to 1 over the most common issues.

Indian Head $10 gold issues are good values as date and as type coins. When gold was one-third today’s price the Indian Head eagle was at a $100 premium to the Liberty Head variety and today that premium is much less in grades up to MS-62. It doesn’t take a rocket scientist to see extreme value here.

 

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