A Step Back? (For Now)



The Current correction in the value of silver has finally caught up to SOME of my MS-65 & MS-66 Morgan Dollars.

It seems the day I have been expecting has arrived, and some of my Morgan Dollars have retreated from their lofty highs. What is amazing about this step back is that almost all my MS-65?s have decreased in value, while all my MS-66?s are continuing to INCREASE in value. This appears to indicate that for now there is still a high demand for affordable high-grade coins.

A few months ago, I wrote that the silver market indirectly influenced the value of high-grade Morgan?s. I implied that the value of Morgan Dollars rose at a higher rate than the spot price of silver. Now I have found that I could not have been more wrong, especially concerning the MS-65?s in my collection. It seems that high-grade Morgan?s and the spot price of silver ARE joined at the hip, and I will use a graph I have created to prove my point.

It appears the mistake I made two months ago was in comparing apples to oranges. Low- grade Morgan?s have a ratio that is close to 1:1 versus the spot price of silver, making a comparison between the two easy and obvious. To compare coins of higher numismatic value with silver, I needed to apply a different ratio. For instance, if a coin is worth $100 and silver is worth $20 the ratio is 5:1. In other words, the $100 coin is worth five ounces of silver. This was a huge oversight on my part that changes my entire outlook.

Since all the MS-65 and 66 coins in ?Gary?s MS-65 & 66 Morgan Gems? are essentially similar in value, I have formulated a ratio based on the average monthly value of my MS-65?s and 66?s. Since Fair Market Value is based on trading in the previous month, I have also used the average spot price of silver from the previous month to formulate my ratio. What I have discovered is truly eye opening. In six months, the ratio for MS-65?s was a high of 6.62 and a low of 6.11. The ratio for 66?s is much more interesting. For the first four months of the year, the ratio has been in the 10:1 range. In the last two months, it has leaped to 13.61!

What my graph shows are my ratios applied to the monthly increase or decrease in the value of silver. To my surprise, this graph shows that for much of the year, I would have been better off buying an equivalent amount of silver than I would have been buying Morgan Dollars. What it also shows is that MS-65 Morgan?s are directly linked to silver. MS-66 Morgan?s, on the other hand, show that in the last two months they have separated themselves from the value of silver showing a true numismatic increase in value!

In summary, I am learning a lot about the market in which I participate. As time moves on, I hope to learn even more. I am attaching a copy of my graph to this post. If you are interested in a copy of my graph and accompanying spreadsheet, send me your e-mail address, and I forward it to you. Until next time, happy collecting!





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