Just a week ago, I ran into two women, Cathy and Ann. They were at the counter of Scotsman’s, a large Midwest coin dealer. Several dozen other customers were also there. The shop was busy, particularly for a Saturday. The price of silver and gold had brought people out of the woodwork. They were selling coins, sterling flatware, serving dishes and platters like crazy.
Not so for Cathy and Ann. Both were wearing shirts with the name and logo of a church they attended. They didn’t seem the kind one might expect to see in a shop actively trading in precious metals. Yet, there was another twist. Unassuming as they appeared, they weren’t there to sell. I overheard them asking about buying several 100-ounce bars of silver....
Normally, I wouldn’t have paid attention. After all, it was their business. However, on that day, 100-ounce silver bars were selling for almost $8,000. Smaller 10-ounce bars were just over $800. The ladies were paying cash. Yikes. That’s a lot of money for two modest church-goers.
There were plenty of others, mostly there to sell. They brought bags or satchels filled with rolls of coins, silver bars and flatware. The staff behind the counter quickly made the transactions. Looking at the customers, I was trying to figure what everyone was thinking. Some felt silver prices had peaked. They were the ones selling. A few others, like Cathy and Ann, evidently believed silver was just beginning a new run-up. They were there to invest.
As the US heads into our semiquicentennial, it’s just the beginning of endless promotions for collectible objects made from precious metals. Many forthcoming commemorative coins, medals and the like will be struck from gold or silver. The thing is, unlike previous celebratory years, with precious metals now trading at near record high levels, the cost of such items could prove prohibitive. That should also be a warning to the wise. Beware! Some commemorative collectibles may merely be gold- or silver-plated. Ironically, high metal prices may create a different opportunity.
For years, dealers and other buyers have paid a premium for coins in their original presentation boxes with the original Certificate Of Authenticity (COA). In the past, while those printed certificates may have been professionally produced, today most could essentially be made on a home printer. Some dealer/collectors might even argue COA’s are no longer important. It’s hard to say.
As I stood near the counter, I noticed a large container filled with the once-necessary and valuable velvet and/or satin lined coin presentation boxes. The silver or gold coins they once contained had been removed, now destined for melting. Whatever person or events those coins had commemorated were supplanted by the monetary value of the silver or gold.
I won’t say that’s the case across the board. Some limited-edition coins still and always will bring a premium with a COA. It’s just that, in some cases, the need for certificates may have lessened.
Metals prices are causing another ripple in the collector market. According to some reports from the US Mint, sales of some collectible commemorative coins has been below expectations.
Recent US gold and silver coins minted to honor “Wonder Woman” are good examples. According to the Mint, a strict limit of just 10,000 Wonder Woman gold coins was available for sale. Each coin weighs one-half ounce and is priced at $3,515. For a 1/-2-ounce gold coin, that’s a goodly premium above the current price of gold.
However, to date, less than 1,000 of the Wonder Woman gold coins had been struck for sale. If those numbers hold and the coin is discontinued, the few examples sold could become numismatically valuable far above the value of their gold content. Of course, there isn’t a deadline for when any remaining coins might be discontinued, withdrawn or destroyed. So, only time will tell.
There’s another critical caveat to consider. Around 1980, when coin dealers first experienced the onslaught to sell gold and silver coins for their metal content, many rarities disappeared. In haste, scarce coins with rare dates or mintmarks were errantly mixed in with common ones. Coins in particularly nice condition were also melted. Today, surviving coins with rare dates or those in premium condition are more prized and quantifiably more valuable than ever.
Clearly, no one knows where precious metals prices are headed. However, while we’re in flux, it’s more important than ever to think about what you are buying and doubly critical to think twice about what you might be selling. Just ask Cathy or Ann.
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