For investors holding silver bullion or collectors of silver coins, the original article noted that gold and silver prices had pulled back during the preceding weeks. At the time of publication, silver had most recently fallen by roughly 6% – 7% in the prior week. The article identified several possible influences: China’s unexpectedly low reported gold holdings, a worldwide economic slowdown affecting commodities generally, including gold and silver, and an apparent coordinated effort intended to reduce gold prices, with an indirect effect on silver. Before that selloff, physical silver bullion and coin demand had already been robust. When this article was originally published, many dealers reported having little or no inventory, including this one, while other dealers reported waits of up to two months before live inventory became available. Falling silver prices were understandably unwelcome for coin investors. Still, the period was not entirely negative: strong demand and constrained supply had helped three silver-coin categories remain notably resilient during the downturn. The original article examined those three categories in the sections that followed.
90% Silver Coins
When premiums rise as they had recently for 90% silver coins, the original article suggested it might be time to reconsider describing 90% silver coins as “junk silver.” At publication, 90% silver dimes, quarters, and half dollars dated 1964 or earlier were especially sought after. Atlanta Gold & Coin and many other coin dealers had found them difficult to keep in stock at that time. Although silver’s price had declined steadily during the previous week, prices for 90% silver coins had stayed comparatively steady. That separation led to premiums above normal levels for these pieces. The article compared the situation with one from early in the prior year, when the commodities-market silver price had diverged from the price of physical silver. It anticipated that premiums would eventually ease, though possibly only after silver prices rose and more holders became willing to sell part of their positions. Because prices reflect supply and demand, added supply could help balance demand and, in turn, reduce premiums.
Morgan & Peace Dollars
The original article characterized Morgan and Peace silver dollars as perhaps the most durable silver coins in that declining market, apart from possibly high-end certified silver coins. Indeed, someone using only Morgan and silver-dollar prices to judge silver’s movement might have concluded that silver had remained flat during that year. As had been true for a while at publication, Morgan silver dollars dated 1904 and earlier commanded the highest premiums. They were followed by 1921 Morgan dollars and then Peace dollars. The article proposed that uncertainty in Greece could be one explanation for the firm silver-dollar market. At the time of publication, more individuals appeared interested in keeping tangible assets outside the banking system. Events in Greece had, in the article’s view, caused some people to question whether bank deposits were as secure as they had initially assumed. It specifically noted that a bail-in remained possible in Greece, an outcome that would have required depositors to absorb a haircut. This was presented as possible context for demand, rather than as a certainty about why every buyer or seller valued these dollars.
American Silver Eagles
When this article was originally published, the U.S. Mint had sold through its silver-eagle inventory earlier this month. That shortage, combined with lower silver prices, had increased demand for American Silver Eagles. Stronger demand alongside restricted supply had lifted premiums above customary levels, although the article reported some premium moderation beginning at the time it was written. During the preceding weeks, Atlanta Gold & Coin had received many requests for Silver Eagles but had bought very little over-the-counter inventory. At publication, some Silver Eagles were generally in stock, but larger orders could not be filled. Wholesale supply was also limited, and dealers that did have inventory available were seeking strong prices for it. The original article expected premiums to ease further after the U.S. Mint resumed Silver Eagle production.
Summary
In summary, the original article reported that even as silver futures prices were falling, demand for certain silver coins remained firm. It identified three categories that met that description. At the time of publication, coins commonly called junk silver—90% silver dimes, quarters, and half dollars—had particularly strong demand and pricing. Morgan and Peace silver dollars had also held stable prices despite lower silver prices. Finally, American Silver Eagle demand remained strong while supplies were limited at publication, a combination that had pushed premiums above standard levels.
