Collectors who want to learn more about the coins they have and how to keep them at their best should look no further. Coin Clinic features a variety of in-depth articles to keep you educated and informed. The most recent Coin Clinic article can be found below or, to view previous articles, make a selection from the following menu.
What High Silver Prices Mean For Collectors
In recent months, silver prices have reached highs not seen in decades. So what does this mean for you, the collector or investor?
If you're a collector, expect to start paying more and more for coins that contain silver. A few years ago, when silver was around $5.00 an ounce, the silver value of a 90% silver Morgan dollar was around $4.00. Today, at $15.00 an ounce, that same coin has a silver value of nearly $12.00.
Of course, this price increase will primarily be confined to lower-grade, circulated coins. Typically, circulated coins have a lower premium because of their condition and subsequent lack of visual appeal (to some). Higher-grade coins have higher premiums, meaning dealers don't have to adjust their prices by much (if at all) when silver prices change. Therefore, although prices are going up, it is only by the silver value itself. There is very little movement in the premium.
To illustrate this better, we'll use the same Morgan dollar mentioned above. A well-circulated specimen might carry a premium of $5.00. This means that the coin will sell for $5.00 more than its intrinsic value (the value of the silver). At $4.00 an ounce, this coin would sell for $9.00. But at $15.00 an ounce, the coin will now sell for $17.00. The $5.00 premium didn't change, but the change in the value of silver has made the cost of collecting well-circulated Morgan dollars more expensive. If a coin dealer were to sell that Morgan dollar for $9.00 when silver was $15.00 an ounce, he'd actually be losing money because the silver in the coin was worth more than he sold it for.
If you're an investor, or you have already completed your collection of silver coins, then high silver prices are welcome. Higher silver prices mean coin values are higher and therefore, if you were to sell your collection, you would make a nice return. If you had bought 100 of the $9.00 Morgan dollars several years ago, you could probably sell them today for around $13.00 or $14.00. Continuing to use the example from above, you might ask why you wouldn't get $17.00, which is what you'd expect to pay for the coin today. The answer is simple--a coin dealer is a business and a business must make money. In order to cover costs and make a small profit to continue operating, the coin dealer must buy coins at a lower price than he sells them for.
For a list of silver coins and their silver values at the latest market price, please click here.
