Jim Bisognani: Hi-ho, Silver!

Posted on 7/23/2020

The white metal shows its mettle.

Many in the numismatic community had been huffing and fretting a common refrain: “What’s up with silver?” This utterance is referring to the huge disparity between the prince Gold and the pauper Silver. Well, silver finally muscled over the first psychological hurdle by clearing that formidable benchmark of $20 per ounce on Monday. By Tuesday, the white metal further displayed its mettle, driving higher by over $1.25.

As I am at my desk this morning, it is residing well over $22 per ounce. Not wanting to be left out, the yellow metal has bounced higher, and gold spot is sitting at over $1,850. Yet, with gold quoted over $1,850 and silver at $22, the ratio between them is 84 to 1!  Perhaps even more amazingly, about four months ago, coinciding with the epicenter of the massive stay-at-home directive in mid-March due to the COVID-19 pandemic, the ratio between gold and silver was nearly 125 to 1!

To me, this is extremely off-kilter, and while silver spot has powered up by over 83% since then, it is still so “cheap.” For data mavens and persnickety coindexters, the last time gold closed at the $1,850+ level, the ratio with silver was just under 45 to 1. I’m just saying…

A 2020 Gold Eagle and Silver Eagle.
Click images to enlarge.

I think all of us coindexters know of a multitude of friends and associates who are still buried in high price silver (i.e., $35+ per ounce). So, each time $20 is breached, for many it signals an opportunity to mitigate losses and “dump” a portion of their respective bars and coins for redemption. This action has more often than not squelched any true escalation.

However, I personally feel this time is different, and we may very well see some stability here and even further momentum. The reasons for this current surge are as complex and plentiful as the chaos we are a part of in the world today. Take your pick of any or all of the following: COVID-19, historic unemployment, 2020 presidential election, overvalued paper assets, or perhaps gold is just too expensive for the average individual to buy in quantity… The list goes on.

The silver lining

With so many folks still working from home or on furlough, the coin market has been the beneficiary of unprecedented demand. Online auctions have been raking in either record prices or “strong” prices when high-grade type or scarce date coins appear, US or World. The armchair force of coindexters and would-be “dexts” are certainly driving this huge demand.

Another key for the white metal is the premiums dealers are paying for silver — any silver. US Silver Eagles of any date are “high bid” on electronic trading networks at $26.40 or, presently, $4.10 above spot. The lowest “ask” was +$5.50 over spot for 100 or more Silver Eagle coins! For certified common dates, the lowest dealer sell offer was $35.75 for 2012-2020 NGC MS 69 US Silver Eagles.

In short order, these prices may seem like true bargains, my friends. Here is more data for my mavens to ponder. The last time silver closed at over $20 was nearly four years ago (another presidential election year), and the last time it closed above $22 (the spot price as I write this is $22.72) was almost six and a half years ago!

Worth its weight in silver

So, what to do with this information? When it comes to world silver coins, I am a bargain hunter, especially on eBay. Armed with the ASW (actual silver weight) of world silver coins gets you on the right course of action, and the ASW can be readily gleaned when you pull up any foreign silver coin page on the NGC World Coin Price Guide. This way you can lay out some bargain hunting parameters as you scour the multitude of listings you will encounter.

I suggest to look first for “buy it now” offers on individual coins, sets or lots. Many times, sellers will list “or best offer” as well. Even if the seller doesn’t list “buy it now” or “best offer,” it doesn’t hurt to contact the seller and make an offer, as long as the listing you are inquiring about hasn’t yet received a “bid.” In that case, the seller is obliged to run out the course of the listing.

Also, before you consummate the deal, confirm shipping costs! Those extra dollars add up and can easily cancel out buying something at actual ASW! Of course, free shipping is preferred; however, if gratis shipping isn’t offered, be sure to confirm whether fees are per item or if the seller offers combined shipping.

Just last night, I was able to scope out a couple such opportunities. First, there was a pair of 1973 British Virgin Island Proof Sets in original packaging for $14.75 and $15 respectively. This set is a Franklin Mint issue that represents the first national coinage produced for the Island. The coins feature an exceptional variety of indigenous birds.

British Virgin Islands 1973 Proof Silver Dollar
Click images to enlarge.

The crowning and rather enticing aspect of this set, however, is the 39-milimeter sterling silver dollar coin. As with all of the coins in the set, the obverse is adorned with a lovely rendering of Queen Elizabeth II, and the reverse design was executed by Gilroy Roberts, the former Chief Engraver of the US Mint. For the silver dollar, the magnificent frigate bird commands your attention. But, oh yes, the ASW of this coin is 0.7643, which places its bullion value alone at over $17!

There is nothing like getting this and other collectible world coins from Australia, Canada, etc., at or below ASW! This is especially true as this kind of hunting is still highly affordable for the younger coindexters and would-be brethren in waiting. To me, this is so much more appealing than simply buying silver bars or sundry rounds. Just think of all the fun that would come with starting a collection of varied Mint State or Proof world silver coins!

Until next time, be safe and happy collecting!

Jim Bisognani is an NGC Price Guide Analyst. He has written extensively on US coin market trends and values.

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