How to determine the collector’s value of a silver coin(s)
The ability to determine the collector’s value or numismatic value of a silver coin(s) can play an important role in a silver investing strategy where the silver investor is aiming for a “double play.” A “double play” in this instance refers to the strategy of minimizing the risks attached to silver ownership by hoping to benefit from increases in the melt value of silver as well as the collector’s value (numismatic value).
Silver Bullion by no means intend to go into the finer details of determining the collector’s value (numismatic value) of a silver coin here, but we do intend to leave the silver coin investor with sufficient info to make an informed decision when it comes to investing in silver coins that have some form of collector’s value (numismatic value) attached to it. Needless to say, the silver coin investor must always strive to avoid overpaying for silver coins. There might be one or two times where emotion and pure stupidity trap you into overpaying for a silver coin, but it must never become a habit and it must never go to the extent where one transaction can ruin you financially and otherwise.
Coin appraisal services…
As a silver coin investor you don’t really want to make use of coin appraisal services, except of course if you’re sitting with a silver coin of substantial collector’s value (numismatic value).
Firstly, coin appraisal services are not free, and secondly, the true silver investor never goes in a “double play” where he/she has to fork out more for collector’s value (numismatic value) than the melt value of silver. It is after all no secret that coin appraisal services are normally only needed when the collector’s value (numismatic value) outstrips the melt value of the silver contained in a silver coin(s) by a large margin. This been written, one can safely assume that not all silver coin investors are silver investors in the true sense of the word. It therefore shouldn’t come as a surprise that Silver Bullion recommends a silver investing strategy where the melt value of silver always outstrips the collector’s value (numismatic value) at least by some degree. Thirdly, it’s no secret that many coin appraisals are fraudulent in the sense that they will provide the silver coin investor with inflated or unrealistic appraisal values. This is not to say that you shouldn’t make use of the services of a coin appraiser, it’s just to say that you should be extremely careful who you’re dealing with. One way of protecting yourself is to make sure that you know the basics when it comes to coin price ranges and coin pricing. If not, you will surely smile each time they give you a high unrealistic appraisal and chances are good that you will give them repeat business, but it will not be to your benefit or last, especially if you try to sell the appraised item(s) to experienced silver coin investors who can spot that something is afoul. You will get a bad name in the business pretty fast and alienate many potential buyers and sellers (or potential life time friends for that matter!).
Factors that influence the collector’s value of a silver coin…
The collector’s value (numismatic value) of a silver coin is primarily influenced by two factors: Firstly, supply and demand, and secondly, the price a silver coin investor is willing to pay for it.
Supply and demand
Common sense tells us that supply and demand play an important role when it comes to the collector’s value (numismatic value) of a silver coin.
During times of relative severe economic hardship or distress there tend to be an increase in the demand for all silver bullion coins, including collectors or numismatic silver coins. This is however not necessarily the case when it comes to rare silver coins that normally sell at multiples of the melt value of its underlying silver value. In fact, rare silver coins tend to experience downward price pressure during bad economic times, but in good times the prices tend to go up as a result of higher demand fuelled by higher or better income levels. On the other hand, the prices of regular collector’s or numismatic silver coins, those that cannot be described as “rare coins,” can remain flat or even drop during relative good economic times within a debt-based monetary system. The primary reason for this is because gold and silver prices tend to be relatively flat when good economic times are experienced within such a monetary system, especially when silver market manipulation and the deployment of the “paper gimmick” are at the order of the day. It’s after all no secret that both silver market manipulation and the “paper gimmick” had been and are being used to give people the false impression that precious metals such as gold and silver have no or little value (at the time this was written).
It’s certainly not easy or advisable to fix one’s opinion here upon a pole and make it known to the whole world, because the severity of economic hardship or distress as experienced by different people, silver market manipulation, the “paper gimmick” and many other factors play a role in determining the collector’s value (numismatic value) of silver coin based on supply and demand. The individual silver coin investor has little if any control over most of these factors, but collectively it is a different story altogether. Collectively silver coin investors can accomplish the impossible.
The price a silver coin collector is willing to pay
The collector’s value (numismatic value) of a silver coin also depends on how much a silver coin collector is willing to pay for it. The price a silver coin collector is willing to pay for a relevant silver coin can be influenced by one or a combination of factors:
- Condition of the silver coin (silver coin grade): The condition or grade of a silver coin is of great importance when it comes to the price a silver coin collector is willing to pay for it in terms of collector’s value (numismatic value). In most instances silver coins do not have to be officially graded, but it can add to a silver coin’s attractiveness and secure higher prices, especially if the coin grading was done by a reputable coin grader and authenticator. Coin grading refers to a process in which the condition or grade of a coin is determined. Be sure to read more about coin grading here.
- Rarity of the silver coin: The rarity of a silver coin is another factor that is of great importance when it comes to the price a silver coin investor is willing to pay for it in terms of collector’s value (numismatic value).
- Age of the silver coin: The age of a silver coin is another factor that can be of great importance when it comes to the price a silver coin investor is willing to pay for it in terms of collector’s value (numismatic value). The rarity and age of a silver coin can go hand-in-hand in certain instances, but it’s not always the case. E.g. it is possible to buy or acquire an ancient Roman coin for a relative small amount. The reason being is because although the coins are old, the coins are not necessarily rare, since the Romans have minted thousands of coins.
Now we can expand the list here and provide details on more factors that influence the price a silver coin collector is willing to pay for a silver coin. However, in order to save time and space and given the fact that such a list can be almost endless, we’re going to conclude this with a brief mention of additional factors without providing detailed descriptions:
Size of the coin
Status of the coin
Status of the Issuer
One can go into an awful lot of detail here, but at the end of the day it’s important that the silver coin investor does his/her own research and let common sense prevail. What is important to one silver coin investor in terms of collector’s value (numismatic value) is after all not necessarily important to another silver coin investor. However, it should be safe to say that the silver investor that aims purely for the silver content should always strive or aim to invest in or acquire silver coins at price levels where the collector’s value (numismatic value) doesn’t far outstrip the melt value of the silver. E.g. the current silver price is $35 per troy ounce of silver. Let’s assume that someone offers you an uncirculated first issue (1986) 1 ozt American Silver Eagle at a price of $70, should you buy the coin or not? Hell no! It comes at a premium of a 100% on top of the silver melt value. Now if someone offers you that very same coin at $45, will you take it? It depends on you, but a more or less 30% premium on top of the silver melt value is not a bad deal at all, especially given the fact that the “paper gimmick” and silver market manipulation are pretty much still at the order of the day (at the time this was written). Having to pay $10 extra in terms of a premium or towards collector’s value (numismatic value) is not bad when you’re sitting with silver content priced at $35 per troy ounce, especially if you’re going for a “double play” as previously described.
Given the factors mentioned on the previous pages, it should be clear that the collector’s value (numismatic value) of silver is not something that’s fixed in concrete. This is exactly why silver ownership in the form of silver coins can be exciting and rewarding, not only financially, but otherwise as well.