Silver’s bull market lifts Morgan dollar prices higher

By Steve Roach - http://www.steveroachonline.com
First published in the May 9, 2011, issue of Coin World - http://www.coinworld.com/

Morgan dollars have been one of the coin market's main beneficiaries of the renewed interest in silver, as the prices for common examples have soared in the last year.

This week silver continues its rapid ascent toward its 1980 high of just over $50 an ounce, topping $43 an ounce on April 19, although more people are asking how long silver's bull run can last.

Dealers are seeking quantities of these coins for purchase, in grades from cull to Mint State 67, to fill orders. While common dates have become more expensive, many Morgan dollars that once traded at premiums are now, relatively, more affordable.

As of April 19, major market makers were paying $97 for 1878 to 1904 dated MS-64 examples certified by either Professional Coin Grading Service or Numismatic Guaranty Corp, $202 for MS-65 coins, $365 for MS-66 examples and $645 for MS-67 pieces provided they were untoned, or nearly so.

Just one month earlier when silver was at the $35 level, these Morgan dollars were trading at $77, $156, $252 and $585 respectively.

Contrast this to a year ago when silver was around $18 an ounce and the same coins were trading at $37, $47, $125, $220 and $650 respectively.

Speculators, market observers and curious collectors are all wondering if the rapid rise in prices for the lower grades of Mint State generic dollars is sustainable.

A silver lining is that the premiums for many issues once considered "better" have simply evaporated.

At the MS-64 level, 1882, 1883 and 1888-O Morgan dollars, which once traded for $20 premiums, now trade at around the same price as a common example like the 1881-S dollar.

The 1903 Morgan dollar once enjoyed a $40 premium in MS-64 over common coins and that premium has been reduced sharply to just a few dollars.

In MS-65 the premiums for other issues evaporate including the 1883-O dollar, which lost its $50 premium and now trades as a generic coin.

The 1898 Morgan dollar, which once traded at a $75 premium, now trades at just a $10 premium over a generic coin. In terms of relative rarity, PCGS and NGC have certified just 4,251 examples of the 1898 dollar in MS-65 in contrast to more than 90,000 MS-65 1881-S dollars. Yet, with some looking, a collector can now purchase both for around the same price.

While these coins have not gotten any rarer or more common, the demand for certified generic dollars has presented some buying opportunities for savvy collectors to buy scarcer issues for the same price as a common example.

Down the grade scale, some tougher Morgan dollars look like fantastic values.

With common Very Good Morgan dollars trading at $34, prices for issues like the 1894-O and the 1894-S dollars have not changed much in the past year and now can be purchased for less than $10 more than the most common example.

Steve Roach is a Dallas, Texas, based rare coin appraiser and fine art advisor who writes the world's most widely read rare coin market analysis each week in the pages of Coin World.  He is also a lawyer and helps create estate plans for collections. Visit him online at http://www.steveroachonline.com, join him on LinkedIn at http://www.linkedin.com/in/stevenroach or follow him on twitter @roachdotsteve

What $41/ounce silver means for collectors

By Steve Roach - http://www.steveroachonline.com
First published in the May 2, 2011, issue of Coin World - http://www.coinworld.com/

With silver now hovering at $41 an ounce as of April 14, many segments of the market are affected. These include obvious bullion-sensitive issues, such as Morgan and Peace dollars, American Eagle silver bullion coins and common 90 percent silver pre-1965 U.S. coins.

However, silver's ascent impacts other collecting areas.

Many Proof sets have experienced substantial gains in the last month including Prestige Proof sets that include a 90 percent silver commemorative dollar, Proof sets from 1959 to 1964, as well as the 1992 and later Silver Proof sets, and State Quarter Silver Proof sets. The prices of all of these have gone up substantially with silver's rise, many trading for little more than their silver value.

With silver at $41 an ounce, 90 percent silver coins trade at 30 times face value, meaning that a 90 percent silver half dollar is valued at around $15 for its silver alone.

This bullion premium nearly eliminates any collector premium that 1892 and 1893 World's Columbian Exposition as well as Booker T. Washington Memorial half dollars of 1946 to 1951 and Washington Carver commemorative half dollars of 1951 to 1954 have enjoyed.

Many modern commemorative dollars are now trading for melt value, as are examples of the 1982 George Washington 250th Anniversary of Birth commemorative half dollar.

The 1959 to 1964 Uncirculated Mint sets, containing $1.70 face value in silver coins, are worth $51 for their silver content alone.

One wonders how many original sets are now destined to go to the melting pot and how many will be left after the market for silver cools down.

It goes without saying that collector opportunities are plentiful, as dealers right now don't have time to sort out many silver coins to search for better dates.

Dealers who are buying and selling bullion coins have to move fast, as profit margins are low and the risk for a market correction looms.

Simply put, most dealers don't have time to carefully sort what comes in because they are in such a rush to get the coins out of the store to cash in on profits.

With people continuing to open up grandpa's piggy bank and take advantage of the 31-year-high price for silver, who knows what may turn up with some careful looking.

Steve Roach is a Dallas, Texas, based rare coin appraiser and fine art advisor who writes the world's most widely read rare coin market analysis each week in the pages of Coin World.  He is also a lawyer and helps create estate plans for collections. Visit him online at http://www.steveroachonline.com, join him on LinkedIn at http://www.linkedin.com/in/stevenroach or follow him on twitter @roachdotsteve

Gold hits another record while silver expands on its 31-year high!

By Steve Roach - http://www.steveroachonline.com
First published in the April 25, 2011, issue of Coin World - http://www.coinworld.com/

Mainstream news attention related to the rise in precious metal prices contributed to drive the public to a very robust Baltimore Whitman Coin and Collectibles Expo, held March 31 to April 3. Reports were nearly universally positive, with dealers using the words "stunning" and "terrific" to describe the convention.

Baltimore was characterized in one report as "the perfect venue for a coin show," and Whitman was roundly praised for putting on a smoothly-run show that was well-attended by a public ready to buy and sell.

The sharp increase in demand for bullion coins has raised the premiums on American Eagle bullion coins with one major dealer selling 2011 American Eagle silver bullion coins at spot price of silver plus 3.75 percent and 2011 American Eagle gold bullion coins at spot plus $3.25.

With silver at $40 an ounce, this means that the wholesale price of a silver American Eagle is $43.25.

The market for Proof silver American Eagles shows little sign of stopping, with wholesalers paying $67 each for coins in original packaging — up from $60 last week and $54 last month — as demand for these coins seems to be nearly insatiable.

With all the attention paid to bullion coins at the moment, one area not keeping pace is pre-1933 U.S. gold coins.

One major retailer sent out a client advisory email, to a broad group of its clients, titled "Pre-1933 U.S. gold coin premiums at historic lows." The notice advised customers to trade American Eagle gold bullion coins, Canadian Maple Leafs, South African Krugerrands and gold bars for classic U.S. gold coins.

This same dealer was offering Coronet $10 eagles in circulated grades at substantial discounts, noting that, historically, two gold $10 coins normally would trade for a premium over one Coronet $20 double eagle, suggesting that at current prices, Coronet gold eagles are undervalued.

Certified Mint State Morgan dollars continue to see substantial price increases, with wholesalers paying $90 for MS-64 coins, $195 for MS-65 coins and $305 for MS-66 examples, provided that the coins are untoned, or nearly so.

Steve Roach is a Dallas, Texas, based rare coin appraiser and fine art advisor who writes the world's most widely read rare coin market analysis each week in the pages of Coin World.  He is also a lawyer and helps create estate plans for collections. Visit him online at http://www.steveroachonline.com, join him on LinkedIn at http://www.linkedin.com/in/stevenroach or follow him on twitter @roachdotsteve

Big demand for pre-1965 90% silver coins

By Steve Roach - http://www.steveroachonline.com
First published in the April 18, 2011, issue of Coin World

Pre-1965 90 percent silver U.S. coins are especially hot, while silver U.S. coins that aren't so familiar to buyers — such as post-1992 Proof 90 percent silver coins from Silver Proof sets — are trading at discounts to melt value.

For example, on March 28, one dealer advertised on a trading network a bag of 4,000 Proof 2010-S 90 percent silver Washington quarter dollars — $1,000 face value — for $26,300, lowering it later in the day to under melt value at $25,999.

Another dealer was offering $1,000 in face value of modern Proof 90 percent silver coins for 99 percent of the melt value.

At the same time, market makers were paying $26,200 for $1,000 face value 90 percent silver bags.

The current market is allowing for a slight premium for all 90 percent half dollar bags, and a slightly greater premium for Walking Liberty silver half dollar bags.

It is discounting 40 percent silver bags slightly along with Roosevelt 90 percent silver dime bags.

Prices for Proof American Eagle silver bullion coins have exploded in the last several weeks. As of March 28, several wholesale dealers were advertising buy prices of $60 each for examples with original Mint packaging.

This quick price advancement has effectively removed premiums for the Proof 1993-P, 1995-P, 1996-P and 1997-P issues. These dates always enjoyed substantial premiums over the more common dates, but not anymore.

The sole issue that now trades for a premium — excluding the rare Proof 1995-W American Eagle silver dollar — is the Proof 1994-P silver American Eagle, which still enjoys a $20 to $30 premium over the common dates.

According to its Web site, the U.S. Mint is scheduled to release Proof 2011-W American Eagle silver dollars on June 30, meaning that the existing supply won't be increasing for at least three months.

Even Proof 2010-W American Eagle silver dollars are now trading at the same level as the rest of the 1986 to 2008 Proof issues.

Proof 2011-W American Eagle gold coins are scheduled to be released April 21, and several market makers have reported a softening of demand for Proof gold American Eagles in anticipation of a flood of 2011 issues.

Steve Roach is a Dallas, Texas, based rare coin appraiser and fine art advisor who writes the world's most widely read rare coin market analysis each week in the pages of Coin World.  He is also a lawyer and helps create estate plans for collections. Visit him online at http://www.steveroachonline.com, join him on LinkedIn at http://www.linkedin.com/in/stevenroach or follow him on twitter @roachdotsteve