Coin Market: Generics slow to match gains of gold, silver
By Steve Roach – Rare Coin Market Report
First published in the November 8, 2010, issue of Coin World
Some of the coins that one would expect to rise such as generic Mint State Morgan silver dollars and Coronet and Saint-Gaudens gold $20 double eagles are showing only minimal gains, although they are trading at high volumes.
On Oct. 14, gold hit a historic high London AM fix price of $1,380.75 an ounce, and during intraday trading that day reached a record $1,388.10.
The same day the U.S. dollar sunk to lows not seen since January upon news that Federal Reserve Chair Ben Bernanke indicated that another round of government monetary stimulus funding may be necessary to revive the U.S. economy.
As silver continues to flirt with $25 per ounce, MS-63 through MS-65 Morgan dollars – the bread and butter of the generic market – are showing some upward movement in price, with several dealers paying more than wholesale “ask” prices for MS-64 and MS-65 dollars, as long as they are “white or white-ish,” to fill large orders from retailers.
Retail prices may increase soon in kind, although some collectors will likely elect to sit out the silver coin market for a while, hoping that the price of silver declines and their wanted coins return to more affordable levels.
As an example, when a common silver quarter dollar is trading for almost $5, many collectors are in no rush to buy.
Circulated silver dollars are showing even more action, with several wholesale dealers paying $22 for Extremely Fine pre-1921 Morgan dollars and $29 for uncertified Mint State examples.
As the public continues to sell these coins to dealers in record numbers, a steady supply is created that should keep prices from escalating rapidly.
Prices for generic gold coins continue to lag behind gold’s ascent and most issues show modest if any price increases. Those prices still have not come close to the levels seen at the beginning of the year, despite the fact that gold is now 25 percent more expensive.
An increased supply of these coins is entering the marketplace, keeping prices in check, at least for now.