Silver Coins – Why Bother Collecting or Investing?

Why bother with American Eagle Silver Coins? They are not that old — they were only minted starting in 1987. So what is it that makes them valuable? Before we go too much further, however, we need to make a distinction in valuation between what is important to a numismatist or coin collector from that which is regarded by a commodity investor. The numismatist would undoubtedly be more interested in the historical significance of a coin, when and how it was created and for what purpose or in whose honor (the story). He or she would be particularly keen on the rarity of the coin. On the other hand, the commodity investor would be more intent on turning a profit from a change in value of the coin(s) from strictly a ‘bullion’ or ‘rare metal’ viewpoint. In the latter case, condition is important, but less so. Let us first look at things from the perspective of a Numismatist. Our website provides info on  silver coins

Age

Any numismatist will tell you that age is not necessarily the deciding factor in determining the value of a coin. In fact, it can be a detriment if the coin has not been taken care of properly and it has ended up being defaced, scratched, or chemically eroded in some manner. In any case, we do not have age on our side as a value determinant for the American Silver Eagle.

Condition

How about condition? Whatever the age, the condition is indeed important. The closer to mint condition the better. I guess that makes the younger American Eagles more likely to be in better condition and thus more valuable than other older coins in not so good condition.

Coins are often minted for different purposes — Circulated, Uncirculated, Proof, etc. Those that are not in circulation stand to be much more pristine or close to mint condition than others. This especially holds true for American Silver Eagle coins which are not in circulation at all.

Rarity

A coin is not necessarily rare because it is old. Its rarity depends more on how many are still ‘available’ after mint production has ceased. By extension, its value is related to its rarity (and on its condition, of course) and on the market demand for the particular coin. Sometimes though, the popularity of a coin brings a higher price than its rarity. Rarity is not only a reflection of availability, but is sometimes determined by a quirk in the production process. An error in minting for some part of the total production makes for a remarkably higher value — like a defective or worn die or a change in font from one die lot to another. This is where the greatest measure of numismatic value lies for the American Eagle Silver coin. The rarest and most valuable would be the ‘1995-W Proof Silver Eagle’ (West Point Mint), part of the ’10th Anniversary American Eagle Five Coin Set’ — only 32,125 sets were minted. The American Silver Eagle dollar coin in this set is valued at over $4,000.00 today.

Following that is the exceptional ‘2008 Burnished Uncirculated American Silver Eagle’, minted erroneously in a small quantity with the 2007 Reverse die — changing the font of the ‘U’ in ‘United States of America’ to the sans serif font in the older die from what should have been the new serif font in the 2008 Reverse die. Public awareness of this error and its limited mintage has increased its value considerably. The ’20th anniversary of the American Silver Eagle program’ produced a limited mintage 2006 Commemorative Set of 3 coins — regular Proof, Reverse Proof Silver Eagle and Burnished Uncirculated, which are sought after for their collector’s rare value.

Finally, to further make this point about numismatic value based on rarity, American Silver Eagle coins produced in low mintage years (1994, 1993, 1996 and 1995 in that order) are not only still affordable, but very much in demand by collectors. American Silver Eagles are not minted for circulation, but more for their bullion value in the form of Proofs for collectors and predominately as Proofs and Burnished Uncirculated coins for investors. We have seen above that the value of these coins for collectors lies in their rarity due to limited mintage, mintage errors and low mintage commemorative issues. Now let us briefly address their value for commodity investors.

American Silver Eagle bullion coins are distinguished from other silver bullion by their certification and guarantee by the United States government to contain one troy ounce of 99.9% pure silver. This certainly enhances their secure value for investment purposes. As an investor’s rather than a collector’s coin, the American Silver Eagle’s value is driven by a bullish physical precious metal retail demand in the market place. This is particularly true today with the US Mint’s overcoming past difficulties with production bottlenecks and putting a highly sustained supply of American Silver Eagle coins into the strong American retail investment market. So there you have it. The not so old American Silver Eagle is worth the bother after all, to both collectors and investors.

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