$10+ premium on Silver Dollars.

As of writing the melt value of a silver dollar is tad under $24.

Looking on eBay, they always seems to bring $34 on up. I'm not talking MS ones, but worn down, cleaned, etc.

Now I could see paying a premium for really old cull silver coins, like capped dimes, seated halves, etc.

This is because there were not as many of them made as Silver dollars.

After even being melted, there is an estimate of 400 million silver dollars out there. By no means is the common series of Peace and Morgan rare.

So we have ruled out rarity.

Now some people might argue that silver investors buy them. But when your buying silver, who in the right mind would pay a $10 premium for junk silver? Not when silver rounds can be had for $2-$5 over spot. Silver investors would just buy halves or quarters, where there is a very small premium compared to silver dollars.

So we have thrown out rarity and invest-ability.

All we really have left is collect-ability.

Now we all know the rule of supply and demand. Low supply= high demand, vice versa.

So there are plenty of silver dollars to go around. If you knew the true numbers, there might be enough to give each man, woman and child in the US 2 of them.

But let's get more specific.

If we remove people 10 and under from the Census, because most kids 10 and under are not true collectors, and remove all but 5 million females, for female collectors, that leaves us 134.64 million people.

Now we need to estimate how many people collect coins. 1 in 10 sounds like a fair amount.

So that leaves us about 13.4 million collectors.

This is a very broad sense of collector, from the serious to the HSN shopper.

So there are enough silver dollars to give every "collector" roughly 29 of them.

The above is a little detailed, but it's math that shows that there is "plenty to go around".

So we have ruled out rareness, investability, and collectibility.

So what is the true answer? Why is there a $10 premium on silver dollars? Now the $10 premium is with eBay.

If we turn to a large scale dealer, like apmex, a Good grade dollar, which is what must people would want, sellers for 32.67 each, a premium of $9.25

Compare this to a common silver round, which the cheapest I could find has a premium of $3.07.

 

Log in or Sign up to hide this ad.

I just bought a 1924 Peace dollar for $27. I feel like it's a pretty good price, considering the melt is about $24 or more today. I bought three last week for $30. I would say that people like silver dollars, and the novice can't go wrong with them. It's too hard to figure out the value of other things, so the silver dollar at around melt plus 10 is an easy sale lately. I think they are a nice chunk of silver for a reasonable price, and I'm only mildly numismatic. I wouldn't pay $34 for them though...

 

Supply and demand. Basic economics.

 

I dont think one in ten people collect coins.

 

The bidding wars for junk silver (in general) are entertaining to watch, in a head-shaking kind of way. I don't get it - I really don't. Has it always been like this? I'm a newcomer to the eBay marketplace.

 

I bought a pair of Peace dollars from someone recently for $50 for the pair. I'll never understand myself the premiums people pay on junk silver on eBay it just makes no sense to me.

 

After noting a seller quoting 500 mercury dimes as 43+ ounces of silver and selling them for an outrageous price, i called another seller that was slightly cheaper and had his number listed on his auctions. He quoted me a premium of 4.17 an ounce essentially. I guess I can't complain he throws in free shipping.

 

So, Tim, are you trying to say you'll sell me all your "junk" silver for just pennies over spot? If you aren't, why would you expect others to do it? Just curious.
Guy

 

More speculation than supply and demand.The supply is there.People are making a purchase at well over melt in the hopes it will shoot up in value.With all the talk of the fiscal cliff I'm sure the buyers are figuring they are making a good purchase.

 

Preppers?

 

I think the price of silver is from the paper market. The paper price for silver is around $30, but the physical price may be diverging now. I noticed this when the price was around $27 this summer. The physical was still $30 or more even after the dip. I think they manipulate the market all the time, but meanwhile to get your hands on the real thing you have to pay what it's really worth. Just my 2 cents.

 

Probably more like 1 out of 100. Maybe even higher. I have a lot of friends, family and work colleagues and none of them collect coins to my knowledge.

 

I bought some with a bunch of Barber quarters right at spot at that moment about two months ago. Of course I know the seller, know what he pays and allow him a little bit of a profit margin - but if he wants to sell to me I name my price. The Morgans and Peace were all XF or better, and the Barbers are all VG+. Of course I don't go sniffing on eBay for this stuff - what a waste of time.

 

"Now we all know the rule of supply and demand. Low supply= high demand, vice versa."

That simply is not true. Many things are quite rare yet their demand is equally low and they languish in value while others are quite common and their demand is very high and they are priced accordingly.

 

I've managed to collect 68 ASEs exclusively from eBay over the last 6 months. I have averaged $5.84 over melt. I set myself a target price of no more than 5% above my average cost and only on rare occasions have I gone over that. Folks that are paying a $10+ premium are either very loose with their cash or "know something" we don't. I suspect the former rather then the latter.

 

Why don't you just order from some of the bullion websites? I ordered some from provident metals and some from goldmart and i paid around 2.59 above spot.

 

I think the answer is simple here... It's capitalism. People are free to ask whatever they want to ask, and people are free to get whatever they want to get. Just because someone asks 10 dollars over spot does not mean they will get it, and maybe they are so obvlivious to the fact that you can go to a place like apmex, and get silver for a much better rate, or they do not care.

 

Or in person at shows.

Silver dollars have always had premiums. People just like huge silver coins in nice shape with "old" dates. Back when they were worth only $3 melt they always sold for $6-7.

I agree Ebay is high, but part of that is the high fees nowadays. I see the same crazy prices on a TON of coin series. Some people will pay out of ignorance, convenience, or just boredom.

Still better than buying on Coinvault though.

 

Three reasons:

• I've been an "eBay'er" since before eBay was eBay, so familiarity and I like the experience
• I can "set and forget" a bid on eBay and don't have to actively track an auction
• I try to make it a rule to only go after items with free shipping. Your $2.59+ spot only works if you're buying a large quantity where they offer free shipping ($7500 for Goldmart). That $2.59 becomes much closer to $5.00 when you only buy a couple of coins with "mad money"

I buy expecting appreciation in silver prices over the long haul so I'm less interested in the small amount of premium. I believe silver will appreciate much more than the premium I'm paying now.

Not saying all (or any) of my reasons are valid but they're mine and I'm sticking with them! :bangg:

Ken