NumisMedia Market Report: Dollar Hoards Spawn Interest and Premiums

Posted on 10/16/2012

Silver dollars have long been a mainstay in the coin business and are likely the most collected US coin. Over the last 50 years, many hoards have hit the market, fueling interest and attracting masses of new collectors.

The GSA, LaVere Redfield, and Continental Bank hoards all have played a major role in developing interest in Silver Dollars. There are tens of thousands of collectors vying for the best quality they can afford.

Not long ago circulated Silver Dollars were worth $10.93 in Very Good condition. At the same time, the MS 63 was priced at $43.20 (for this comparison we are using the Morgan Dollar). These were the Fair Market Values reported in July 2005. Today, VG Silver Dollars have an FMV of $32.78 and MS 63s are $65. The ratio was nearly four times for the MS 63 over the circulated dollar back in 2005; today it is less than two times. What happened to the premiums these past seven years? With the run up in metals, in this case Silver, the demand for so-called junk dollars has increased immensely. In addition, they still carry a good premium over the melt value of $26.80.

The following graphs show the progress of the Very Good Silver Dollar over the last seven years as compared to the common date MS 63 Morgan.

Common Date Morgan Dollar – VG

Common Date Morgan Dollar – MS 63

Of course, circulated coins comprise the majority of these sales. However, looking through retail ads, auctions and dealer buy/sell lists, certified Mint State coins are as popular as ever. The graphs above show that the VG and the MS 63 Dollars have followed the same pattern throughout. Yet, the percentage of increase for the MS 63 is quite a bit less than the VG. If you had purchased $10,000 worth of VG Dollars back in July 2005, you would have received 915 circulated dollars. Today they would be worth $29,993. If you had used the same $10,000 to purchase MS 63 Morgan Dollars you would have received 232 certified coins. Today they would be worth $15,080; a nice $5,000 profit but not nearly as much as the circulated dollars profited. The question this presents is whether the MS 63 will once again stretch out to the premium it held in 2005.

Looking at the MS 64 chart for the Morgan Dollar, it has responded pretty much the same as the MS 63. The high points were in May 2011; and the overall increase was $28.60 from $56.40 to the current FMV of $85. The MS 65 did not fare as well during the same time frame. In July 2005 the FMV was $156.25 and today it is $148. It had various upward swings, one in July 2006 up to $235, and one in May 2011 up to $262.50, yet has fallen nearly every month since.

Future Silver prices will certainly hold the key to what circulated Silver Dollars will do over the next ten years. Collectors of a limited number of Mint State Silver Dollars are hopeful that they will once again garner the premiums they once enjoyed over the vast millions of circulated Silver Dollars. There were over 600 million Morgan Silver Dollars originally minted. With many of them melted and circulated over the last hundred years, it makes sense that collectors are attracted to MS 63 and higher graded Silver Dollars.

This article is a guest article written by:

The thoughts and opinions in the piece are those of their author and are not necessarily the thoughts of the Certified Collectibles Group.