Peace Dollar Price Collapse

[JIM F.]

I was surprised to see the price trend on generic MS66 Peace Dollars.  I didn't follow the  market back at the $4,000 high, and recently saw NGC MS66 examples offered at a well-known retailer for $299.  What happened? !

Chart taken from PCGS price history resource.

[MarkFeld]

A great many coins are selling for fractions of the prices seen during the 1989-1990 market peak. 

[LINCOLNMAN]

Looking at the most recent time period, market prices of peace dollars in 66 seem low to me, compared to,say, Morgans. Of course Morgan collectors abound. Then there is the price difference between a 65 and a 66 vs. the qualitative difference, and the high number of graded coins (PCGS over 7,700 in 66). All in all the market is more rational IMO reflecting the demand of "real" collectors and the supply. Thanks for the post, I'm going to upgrade my type set if I can find a 66 CAC that's clearly superior to my 65 CAC. (BTW I collected the 65 years ago as a 64, which may also suggest in part why prices have declined.) 

[World Colonial]

The spike in the above chart is from the TPG bubble. 

As many comments both here and the PCGS forum have stated, there is presumably "gradeflation" in the population data which has negatively impacted the prices.

To my knowledge, the price of most US "collector" coins has also decreased since 2008.  I assume that there is a noticeable financial buyer component for Peace dollars in at least MS-65 and MS-66 grades but I could be wrong about that.  I don't buy or read print publications anymore (online only) but when I did, I'd see plenty of adds offering Morgan dollars but far fewer for this series.  On the internet, I haven't paid attention.  Regardless, the price of series has presumably been negatively impacted by this trend, which in my opinion is also a contributing factor to "gradeflation".

[coinman1794]

Slipping standards may also be to blame for MS66 coins selling for less and less.

[Six Mile Rick]

Didn't the grading standards for PCGS change in the 80's or close to there where older slabs were sent in and upgraded due to strict MS65 grades in the 70's and early 80's?

Mark,

 What year did PCGS start popping out MS68 and MS67 Peace dollars?

[World Colonial]

3 hours ago, Six Mile Rick said:

Didn't the grading standards for PCGS change in the 80's or close to there where older slabs were sent in and upgraded due to strict MS65 grades in the 70's and early 80's?

Mark,

 What year did PCGS start popping out MS68 and MS67 Peace dollars?

PCGS was founded in 1986.  I think you are off by one or two decades.

[BillJones]

On ‎7‎/‎7‎/‎2018 at 12:55 PM, coinman1794 said:

Slipping standards may also be to blame for MS66 coins selling for less and less.

Yes, as the grading standards are watered down, the prices fall. It is a combination of a larger supply of coins with "MS-66" on the slab and the fact that you get less for your money for the grade. In addition many feel that the coins in general are in a price melt down.

[Conder101]

In 1988 and 89 there was a lot of speculation that now that coins were being certified they would be fungible and could be bought and sold sight unseen.  They would be like stock certificate and any MS-65 would be the same and the same price as any other MS-65.  It was thought that the wall street people would get into trading in coins , building portfolios etc (and some did).  Speculation ran wild and prices jumped through the roof.  It was a crazy time   Common date MS-65 Morgans like the 1881 S were pushing $1000 apiece!  Many other coins in MS also had big run ups.  Then in late 1989 it became clear Wall Street was NOT going to get into the market in a big way and the bottom dropped out.

[World Colonial]

13 hours ago, Conder101 said:

In 1988 and 89 there was a lot of speculation that now that coins were being certified they would be fungible and could be bought and sold sight unseen.  They would be like stock certificate and any MS-65 would be the same and the same price as any other MS-65.  It was thought that the wall street people would get into trading in coins , building portfolios etc (and some did).  Speculation ran wild and prices jumped through the roof.  It was a crazy time   Common date MS-65 Morgans like the 1881 S were pushing $1000 apiece!  Many other coins in MS also had big run ups.  Then in late 1989 it became clear Wall Street was NOT going to get into the market in a big way and the bottom dropped out.

Yes, speculators apparently forgot that it's only collectors who derive utility from collecting, not anyone else.  Additionally, even though enough people (especially real collectors) should have known better, somehow apparently too many buyers believed that most of the coins subject to this speculation were a lot scarcer than the reality.

After almost 30 years, it should be evident now that this speculation was a "one shot" event and that these coins will never revisit this price level adjusted for price changes.  Adjusted for price changes, the actual performance is even worse, much worse.

"Eventually", I predict the same fate for the actually common coins that are also the most inflated, especially "grade rarities" and near it with prices totally disproportionate to the actual merits as a collectible.  "Eventually" will presumably be a long time but it should be equally evident that this practice has very little to do with actual collecting either.  It is predominantly financial buying using the pretense that somehow differences which were ignored prior to the widespread buying of coins as "investments" in the 1970's actually create any distinction.

[LINCOLNMAN]

40 minutes ago, World Colonial said:

Yes, speculators apparently forgot that it's only collectors who derive utility from collecting, not anyone else.  Additionally, even though enough people (especially real collectors) should have known better, somehow apparently too many buyers believed that most of the coins subject to this speculation were a lot scarcer than the reality.

After almost 30 years, it should be evident now that this speculation was a "one shot" event and that these coins will never revisit this price level adjusted for price changes.  Adjusted for price changes, the actual performance is even worse, much worse.

"Eventually", I predict the same fate for the actually common coins that are also the most inflated, especially "grade rarities" and near it with prices totally disproportionate to the actual merits as a collectible.  "Eventually" will presumably be a long time but it should be equally evident that this practice has very little to do with actual collecting either.  It is predominantly financial buying using the pretense that somehow differences which were ignored prior to the widespread buying of coins as "investments" in the 1970's actually create any distinction.

I generally agree with the condition rarity comment. However, it's more than financial buying fueling this phenomenon. The registry competition is for real and almost certainly is at the bottom of the demand for condition rarities. Let's call this "ego buying". After a hiatus of about 15 years collecting US coins I was shocked at the prices fetched by incredibly common (and rather uninteresting IMO) coins at the top of the pyramid. Brilliant concept on the part of the TPGS. 

[World Colonial]

8 hours ago, LINCOLNMAN said:

I generally agree with the condition rarity comment. However, it's more than financial buying fueling this phenomenon. The registry competition is for real and almost certainly is at the bottom of the demand for condition rarities. Let's call this "ego buying". After a hiatus of about 15 years collecting US coins I was shocked at the prices fetched by incredibly common (and rather uninteresting IMO) coins at the top of the pyramid. Brilliant concept on the part of the TPGS. 

Yes, I would attribute it to the registry and "trophy" buying.

Prior to the financialization of the "hobby" before these coins sold for exorbitant prices, no one held the current opinion just because of the eye appeal or it's TPG eligible grade.  The primary reason anyone cares now and in the last few decades is due to the price, as in most instances dozens, hundreds if not thousands of essentially identical coins are available and can be bought on demand or on short notice.  This is certainly true of the Peace dollar, as none of date/MM cmbinations are remotely scarce.

The one thing I can guarantee you is that if (my opinion is when) these coins no longer sell anywhere near current prices, no one or hardly anyone will care - again.  The reason I know it is because I concurrently know that objects and collectibles with real (as opposed to imaginary) distinction have it aside from the price.  We can know this by looking at objects outside of coins.  Those with the most distinction which have been around a long time mostly (if not entirely) were always expensive but nowhere near current inflated prices either.  These objects and the coins which were highly regarded prior to the 1970's have actual or at least the most distinction.

As for Peace dollars, I expect this series to continue to lose value over the longer term.  A big run up in the silver spot price or a marketing promotion seem to be the most likely to push the price up noticeably.

[physics-fan3.14]

Peace dollars seem like they are generally less popular than many other series. I'm not surprised to see their price generally stagnate for the last 20 years. 

[World Colonial]

15 minutes ago, physics-fan3.14 said:

Peace dollars seem like they are generally less popular than many other series. I'm not surprised to see their price generally stagnate for the last 20 years. 

I have no direct evidence of it, but it wouldn't surprise me if the Peace dollar price level has been negatively impacted by the increased preference for NCLT bullion coinage over this period, including from non-US mints.  The coins are of equivalent size, many of the designs are considered better by a noticeable proportion of the US collector base and the premiums to spot are lower in many instances.  I don't consider this coinage "real" but it's apparent many who buy it do and don't collect it just as a strict silver substitute..

The US collector base is probably still larger as a result of the SQ program versus pre-1999 but probably flat since about 2008 or thereabouts and if not, it's evident the money flow has decreased for common US classics anyway.

Of the most widely collected US classic series, I'd rank it ahead of silver Washington quarters, silver FDR dimes (if defined as a classic series) and the Franklin half.  Concurrently, I'd rank it behind the SLQ, Buffalo nickel, Mercury dime, WLH, Lincoln Cent and Morgan dollar.  I'd also rank it ahead of every single US modern series (by a substantial margin) aside from maybe the ASE for an actual preference, as opposed to it's "popularity" as measured by the size of the collector base.