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How Price of Silver Affects Coins Value

 
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Valued Member
United States
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 Posted 01/06/2019  03:30 am Show Profile   Bookmark this topic Add Pauldog to your friends list Get a Link to this Message
Back when silver was about $6 an ounce, I bought a bunch of silver in different forms from a dealer. Some of it was "junk coins," and I noticed a bunch of well-worn coins that had been heavily cleaned, so no collector value there. I took a closer look only in the past week or two, and discovered that some of the coins are in decent shape and worth quite a bit more than the bullion value - Barber dimes and quarters, Mercury dimes, etc.

I don't know coin collecting well enough to know how the price of silver affects these kinds of coins. And I suppose different coins wouldn't be affected quite the same. For instance, some Barber quarters that aren't all that rare go for maybe 100x face value, while the silver value is about 11x face. And the Barber dimes are worth maybe 40x face with the same 11x silver value.

I'm interested in selling some of these coins, but I feel that silver prices are relatively depressed these days (high gold/silver price ratio, etc.), and I'm thinking that it makes sense to wait for an increase in silver prices before trying to sell much.

I'm posting here to see what anyone else knows about this.
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 Posted 01/07/2019  10:13 am  Show Profile   Bookmark this reply Add jbuck to your friends list Get a Link to this Reply
to the Community!

Your reply was split into its own topic for the proper attention.
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 Posted 01/07/2019  10:34 am  Show Profile   Bookmark this reply Add basebal21 to your friends list Get a Link to this Reply

Quote:
and I'm thinking that it makes sense to wait for an increase in silver prices before trying to sell much.


You can be waiting another 30 plus years like last time. Not all dealers sell things in a manner where they know what they have.

That said if monetary investment is the goal as long as it's common stuff go ahead and sell it and put the money into something that can actually make you money or get a return
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 Posted 01/07/2019  11:08 am  Show Profile   Bookmark this reply Add T-BOP to your friends list Get a Link to this Reply
The word from the coin scene is the value of a silver coin in collectible condition will not go up if the price of silver goes up .
But I disagree , I believe the increase in the price of silver will have a positive affect on nice silver coins .
anybody care to debate this ?
I see a big one on the horizon . Stay tuned !

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 Posted 01/07/2019  11:25 am  Show Profile   Bookmark this reply Add just carl to your friends list Get a Link to this Reply

Things like that no one really knows. For all anyone knows, some one somewhere may invent a method of making Silver from Lead. Then the Silver prices will really drop. Or massive Silver mines may be found and again, Silver prices will drop. Or governments everywhere will pass laws declaring owning Silver is a crime making what you have useless. I'd simply say enjoy keeping what you have and start a hobby of collecting coins.
just carl
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 Posted 01/07/2019  2:00 pm  Show Profile   Bookmark this reply Add Pauldog to your friends list Get a Link to this Reply
I won't address the "silver from lead" possibility :), but my understanding is that the relationship between the economy and precious metals is a lot different from when Roosevelt confiscated privately held gold in the 30's, and doing that now wouldn't help the government's fiscal situation. See Aaron Brown's interesting book "Red-Blooded Risk" (e.g.) for a discussion of what money means now.

It does seem that there's more upside than downside to silver now. How long it takes to go up an appreciable amount is not something I claim to have a clue about. But I do like the arbitrage scheme of swapping silver and gold back and forth as the ratio of their values changes.
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 Posted 01/07/2019  2:56 pm  Show Profile   Bookmark this reply Add basebal21 to your friends list Get a Link to this Reply

Quote:
I believe the increase in the price of silver will have a positive affect on nice silver coins .
anybody care to debate this ?


It does on coins where melt value is a significant portion of the value. Most coins not to much other than possibly increased interest when more people cross over from bullion to numismatic coins.
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 Posted 01/07/2019  8:12 pm  Show Profile   Bookmark this reply Add tdziemia to your friends list Get a Link to this Reply

Quote:
For all anyone knows, some one somewhere may invent a method of making Silver from Lead. Then the Silver prices will really drop


Sure hope nobody's hoarding lead as a hedge on that possibility
Edited by tdziemia
01/07/2019 8:13 pm
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 Posted 01/07/2019  8:33 pm  Show Profile   Check silverwolf's eBay Listings Bookmark this reply Add silverwolf to your friends list Get a Link to this Reply
silver price only affects coins that are priced close to melt value.. it does not ever affect coins of any significance , in regards to numismatic values..if you have an ms 64 Morgan dollar, it is priced to the market for numismatic value, if the silver price rises 10$ an ounce it will have no influence on the sell price.. but if you have a bunch of low grade coins, and silver jumps 10$ an ounce then it will certainly affect the prices, done and done..
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 Posted 01/07/2019  8:38 pm  Show Profile   Bookmark this reply Add tdziemia to your friends list Get a Link to this Reply
I would be very interested in seeing an analysis of selling price of silver coins that are well above bullion value, yet are not true rarities, as a function of bullion value.

I doubt such a thing is available.

eBay would probably be the best source of such info, but it would require someone compiling it on a regular basis.

As for the original question, my hunch is that it makes no sense to hold onto coins that would sell for, say 5 to 10 times bullion value. As suggested by basebal21, sell them and put the proceeds in something reliable.

Edited by tdziemia
01/07/2019 8:56 pm
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 Posted 01/07/2019  8:48 pm  Show Profile   Bookmark this reply Add MikeF to your friends list Get a Link to this Reply
From what I've seen spikes in silver prices affects the coin market as a whole in a positive way. As bullion goes up dealers make more money. Consumers become more interested and buying increases. The last recession and a few years following was a good example of this. I wasn't involved with coins at the time but the dealers and collectors I've spoken with said it was a lot of fun.
Hi, my name is MikeF and I'm a degenerate coin collector. I also like adventure, big trucks, long walks on the beach and the Kansas City Chiefs.
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 Posted 01/11/2019  02:07 am  Show Profile   Bookmark this reply Add Pauldog to your friends list Get a Link to this Reply
"...my hunch is that it makes no sense to hold onto coins that would sell for, say 5 to 10 times bullion value."


Do you mean "5 to 10 times bullion value NOW, because that ratio will not continue to be that high as the bullion value goes up" ?
Edited by Pauldog
01/11/2019 02:11 am
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 Posted 01/11/2019  02:32 am  Show Profile   Bookmark this reply Add Dorado to your friends list Get a Link to this Reply
To the Forum.
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 Posted 01/11/2019  08:09 am  Show Profile   Bookmark this reply Add tdziemia to your friends list Get a Link to this Reply

Quote:
"...my hunch is that it makes no sense to hold onto coins that would sell for, say 5 to 10 times bullion value."

Do you mean 5 to 10 times bullion value NOW, because that ratio will not continue to be that high as the bullion value goes up?


In your original post you said you noticed some common Barber quarters that sell at 9X bullion and Barber dimes that sell at 4X bullion. I think many would say this is an indicator these coins are selling based on numismatic value.

Since no facts have been presented on how this ratio changes as bullion value moves, I am guessing that ratio either moves very slowly, or is just as likely to move in relation to things other than bullion value.

Another way of saying this is that the best indicator of current numismatic value is the recent numismatic value, and not the bullion value, when an item is selling at many multiples of bullion. If that's a good assumption (and to be clear, that's all that it is), the answer to your specific question that I've copied is "it doesn't matter most of the time."

If you bought when silver was at $6, you've been holding these for over 14 years. I don't follow precious metal prices on a regular basis, but if I look at historical trends for silver, the last time silver had a sustained upward movement was over 8 years ago. If it were me, I would not be expecting an updraft in silver price, and I would not hesitate to start selling based on bullion considerations.






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 Posted 01/11/2019  3:19 pm  Show Profile   Bookmark this reply Add TreeMonkey to your friends list Get a Link to this Reply

Quote:
I would not be expecting an updraft in silver price


Sounds like the perfect time to buy
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 Posted 01/11/2019  10:31 pm  Show Profile   Bookmark this reply Add tdziemia to your friends list Get a Link to this Reply
Some of the posters here will know I am fond of statistics. That's one way to test the question/hypothesis here (which silver coins' prices are affected by bullion prices?).

On another thread, we looked at some statistics on auction sales for various U.S. coins. So I will use a similar approach here, again drawing from this database:https://www.PCGS.com/auctionprices.

First, we need to identify periods with different bullion prices. I looked over the last 10 years, and chose these periods with non-overlapping, and fairly consistent bullion prices (the "high" period is non-overlapping but not so consistent):

"Low" Bullion Price: Silver was at $16-17/oz.most days between 5/1/2017 and 5/31/2018

"Medium" Bullion Price: Silver was at $19.5 to $22/oz. most days between 7/1/2013 and 7/31/2014.

"High" Bullion Price: Silver was over $30/oz. most days between 2/1/2011 and 4/30/2012.
https://www.apmex.com/spotprices/silver-prices.

For a silver coin that sells at a small multiple of bullion value, I chose the 1881S Morgan in MS62, since this is the Morgan with the most data in the PCGS database. For a silver coin that sells at a high multiple of bullion, I chose the I chose the 1891CC Morgan in MS63, which was examined on the other thread.

Here is what I found for the median selling price at auction during the various periods:

1881S Morgan MS62
"Low" bullion price period: $44
"Medium" bullion period: $47 (7% higher than low bullion)
"High" bullion period: $51 (16% higher than low bullion)

1891CC Morgan MS63
"Low" bullion price period: $660
"Medium" bullion period: $676 (2.5% higher than low bullion)
"High" bullion period: $604 (8.4% lower than low bullion)

From this very limited analysis, the hypothesis that low value silver coins are more closely tied to bullion prices is supported. But I would emphasize the "very limited" qualifier.

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