First published in the Dec. 27, 2010, issue of Coin World
Gold and silver continued their assent Dec. 6, with gold hitting a record $1,432.50 and silver reaching a 30-year high of $30.73 during trading on Dec. 7.
Investors continue to be worried about the financial stability of Europe, the potential for a weak U.S. dollar, and the possibility that the Federal Reserve will expand its latest stimulus package to buy more U.S. bonds.These factors, combined with increased demand associated with the holidays, means there is a strong likelihood that bullion prices may keep increasing.
Higher silver prices directly impact collectors in that 90 percent silver bags of coins ($1,000 face value) are now trading for nearly $22,000.
A common Franklin half dollar is worth $11 now, solely for its melt value. A 40 percent silver Kennedy half dollar is worth $4.50.
Some issues have seen a surge in demand, such as certified Mint State 63 and MS-64 Morgan dollars, which are now trading for $39 and $57 each wholesale in sight-unseen markets, compared with the $34 and $44 level where they were trading in September.
The gains for MS-65 and MS-66 Morgan dollars have been less dramatic, with these issues trading at $125 and $205 wholesale.
However, none of these increases is proportional to the increase in the price of silver, which has moved up nearly 50 percent in the past three months.
Circulated Morgan dollars show nearly unstoppable demand, with dealers paying $24 for circulated 1921 Morgan dollars and $27 for Mint State examples.
For 1878 to 1904 issues, some dealers are paying $35 for a Mint State example and $36 for Mint State San Francisco Mint issues.
Even culls – the lowest of the low in terms of grade, generally ugly coins that can have major rim damage, scratches and heavy polishing – are trading at the $22 level.
The interest in the common issues has sparked increases in tougher dates too, because as the prices for common dates increase, tougher dates become cheaper by comparison.
Peace dollars haven't quite picked up the fire, with MS-63 examples bringing $32 and MS-64 examples seeing $38 wholesale.
