This current sudden rise in value of high-grade common date dollars is insane and shows no sign of letting up.
Several months ago, I began a collection of what I felt were affordable MS-65 & 66 Morgan Dollars. Now my collection of 22 MS-65 & 66 Morgan Dollars is complete and resides as a custom set in ?Gary?s MS-65 & 66 Morgan Gems?. I started this set based on the hope that I could complete it at an average cost of $200/coin. For a while, I was doing pretty well until the value of common date Morgan Dollars in uncommon grades started sharply increasing. Fortunately, by the time I noticed the sudden change in market values, my set was nearly complete. In the end with a little help from ?E-bay Bucks?, my final average cost came to $203/coin.
I would love to say that ?I saw this coming?, but the truth is that I am very fortunate to have gotten on this train just before it left the station. Since January, most of the coins in this set have seen double digit increases in value, with three of my MS-66 coins increasing 69% in value! I know this is not sustainable and that there will be a correction at some point. However, I have read several articles in the last week or so suggesting the current correction in silver is not affecting the value of high-grade common date silver dollars. This sudden increase in the price of silver may have started a demand that has yet to see a correction.
The numismatic value of a coin is the value above the melt value of that coin. Increases in low-grade common date dollars are more in line with the coins melt value. High-grade dollars, on the other hand, have eclipsed their melt value to increase in some cases hundreds of dollars. In essence, the intrinsic value of a high-grade common date dollar is practically a non-factor.
One of the biggest casualties of a rapid rise in the price of silver is the permanent loss of entry-level coins due to melting. Time will tell how this current loss of supply will affect the long-term market. Nevertheless, a drop in supply is sure to put upward pressure on what remains. Although high-grade silver dollars are in no danger of being melted for their silver content, the upward pressure from the bottom tier dollars is almost sure in some way to buttress the higher tier.
A bad E-bay experience illustrates the difference a month can make. On April 3, I won an auction for a NGC MS-65 1902-O Morgan Dollar. However, the seller who had a 100% feedback score at the time never sent me my coin. I filed a customer care case with E-Bay, and they refunded the money I spent to buy the coin. One month later, I won an auction for a PCGS MS-65 1902-O dollar and spent 38% more than I paid for the original coin. Even though I won the case and got the refund, this incident unnecessarily cost me more money. The point of this illustration though is that it is an accurate microcosm of the market as a whole.
Where do I go now that this portion of my collection is complete? I think I will take a break from Morgan?s for now and focus on other areas of my collection. As I stated in a previous journal, the increased activity in one area of the market is making for good buys in other areas. We?ll see what happens, but until then, happy collecting!