Jim Bisognani: It’s Time for Silver and Gold

As I gaze out of my living room window, it is barely 4 p.m. and it is almost dark. Yes, my fellow coindexters, another month has come to an end and believe it or not, December, that last and so festive of the months, is being ushered in. Of course, the numismatic market has no calendar, but it does have an agenda. The numismatic marketplace remains a bit of an enigma from month to month and year to year, as it is still a driving force, with no real chinks in the armor.

With a prevailing tailwind of discord, courtesy of international affairs and inflationary fears, the precious metals are also displaying end-of-year muscle.

'Tis the Season: Silver and Gold

Gold spot has closed above the $2,000 mark for several days in trading. Silver is traveling higher, having closed over $25 per ounce. Since early October, this reflects nearly a 12% uptick for gold spot, with silver claiming a 20% hike since the same time period.

As the metals are driving higher, rare collector coins and currency (and other collectibles) are benefiting from these advances. While there may be no direct correlation between the two, any movement up or down in the metal arena will always attract an envious and curious audience. As a longtime trader friend told me many years ago, "When metals are stationary, there is no excitement or buzz to pique collectors or investors. Any movement up or down does."

For collectors of above-modest means, bargains appear in the form of $20 Liberty Type III and Saint-Gaudens series. A quick check of a major trader reveals NGC MS 63 examples of either coin quoted at a mere 10% over melt. A solid opportunity at this price point, as you can acquire large US Gold coins in Choice Uncirculated condition (certified to boot).

Even if the gold buyer is just that, a gold buyer, he or she is also getting a numismatic coin, which will hold its collector value even as spot price vacillates. If the spot price of gold retreats and is on the downside, there is the built-in buffer-collector value for the certified coin. On the flip side, as gold moves higher, in all likelihood the collector component will lead to higher value.

Another good buy is $10 Liberty gold. NGC MS 61-quality certified coins are being offered at barely more than 9% over melt. Perhaps a holiday gift for your coindexter in chief.

As addressed here before, the premium for pre-1933 US gold coins has been stripped away with the higher gold spot levels. This equates to a great buying opportunity for the collector or investor looking to add to their collection or merely augment their investment portfolio.

Being a coindexter, as well as a data maven, I quickly pulled out the spreads from exactly a year ago. Gold spot was around $1,750. And the spreads over melt for MS 63 $20 Liberty coins and $20 Saint-Gaudens was 16.5%. So, as gold spot accelerated nearly $300 per ounce, the margins became tighter.

Checking a bit further, margins between MS 63 and MS 65 for the same Double Eagles today are 13%. Last year, those spreads amounted to 8.25%. This would indicate the demand for Choice Uncirculated to Gem Uncirculated Gold Double Eagles has intensified, commanding higher premiums in light of gold spot acceleration.

A further check of higher-grade pre-1933 US gold type was also a bit surprising, as virtually the entire gold series, notwithstanding the US Double Eagles, has actually seen a decline in prices. The only plus signs were targeting Type III Gold Dollars in MS 61 to MS 64, and even those gains were modest. The best acceleration was for the MS 62 Type III Gold Dollars, reflecting nearly 16.5% elevation in price for that grade.

Yet the biggest surprise, and one that warrants some attention in my estimation, are the Three Dollar Princess gold coins (1854-1889). Take a look at the price figures below from a year ago.

Three Dollar Princess Gold

NGC	11-30-2022	11-30-2023	% change
MS 61	$2,750	$2,450	-10.91%
MS 62	$3,125	$2,600	-17.8%
MS 63	$4,600	$3,800	-17.4%
MS 64	$5,750	$5,000	-13.04%

To further illustrate just how scarce the Three Dollar Gold coin type is, I will supply census information for what would be considered the two type coins in the series: the 1874 and 1878. Below is the combined data in those grades.

Three Dollar Gold: 1874 and 1878 Combined NGC Census Totals

MS 61	MS 62	MS 63	MS 64
1,200	1,223	648	524

Yes, my fellow coindexters, the Three Dollar Gold Princesses are a very scarce coin type in their own right. For comparison, I will include just the population of the popular $20 Saint-Gaudens type coin: the 1924.

NGC Census Totals for 1924 $20 Saint Gaudens (type)

MS 61	MS 62	MS 63	MS 64
17,937	54,326	118,915	116,035

I was being conservative here because there are several other dates within the Saint-Gaudens series that could be considered type in MS 61 to MS 64, which would elevate these figures tremendously. But I think my fellow coindexters get the idea of how scarce Three Dollar Princesses are in comparison. At the current market price, I would opt to salt away a few Three Dollar Gold Princesses in MS 63.

That said, with gold spot over $2,000 per ounce, many collectors or would-be investors are finding it hard to muster up a few thousand dollars for a mere ounce of gold. Silver to the rescue! Many collectors or investors that find metal an attractive asset can certainly acquire much more silver for the same $2,000-plus.

A rather inexpensive and fun way to acquire silver, in my opinion, is 90% US silver pre-1964 coins, commonly referred to as "junk silver." Presently, this will run the buyer about $19 per each $1 of US pre-1964 coins.

Exactly one year ago, the premiums over silver spot for 90% US was $8-plus for dimes and quarters and $10.75-plus for half dollars! Today that premium has said goodbye, as dimes and quarters are being sold at spot plus $1.20 and half dollars at spot plus $1.75!

Of course, Silver Eagles are flying high and are an extremely popular coin for collectors as well as bullion investors. Presently, the coins are trading on average about $4 over current silver spot levels. This is quite attractive considering that a year ago any coin from the series was commanding at least a $12 to $14 premium over spot — and this was being paid by dealers!

In addition, the Morgan Dollar needs to pop into the equation. If you are interested in low-grade VG+ pre-1921 Morgans, they are trading at around $35 each and those coins in “BU” are going for around $53 per coin. These coins are still wildly popular with collectors and investors to some extent. A dealer friend of mine told me: Morgans are like bullion on steroids.

As always, let your budget be your guide, and before the acquisition, carefully examine your coins, both raw and certified. When Beth and I were on our way to the local grocery store recently, a window sign caught my eye. I had to have Beth turn around and come back so I could take a picture.

My first thought: Is this a polite way to say that there is a coin doctor on the premises? But no, just merely some odd choice for advertising at this local pawn/trading shop in my hometown. However, it certainly was an attention getter for me, as well as any fellow coindexters in town.

Until next time, be safe, happy collecting and happy holidays!

Want to see more articles like this? Subscribe to the free NGC Weekly Market Report.