Any way to determine the numismatic value

Hayden

With silver and gold so high right now, a lot of formerly collector coins are now just bullion. I've been thinking about buying a bunch of gold/silver coins with a bullion value just slightly higher than their numismatic value. Then I could short sell an equal amount of bullion with very little potential downside and a lot of potential upside.

The hard part is figuring out what the numismatic value of coins that are just bullion right now is. You could look at old grey sheets, but they would likely be outdated. Any thoughts?

RedTiger

I think the harder part is finding real numismatic coins for sale at bullion prices. Occasionally a forumite reports finding one coin or a few coins, but rarely do they find solid rolls of the stuff. A few examples might include: no-problem Seated coins, VG or better Barbers and SL Quarters, there are many more. Old price sheets are a good resource. Any numismatic coin that was retailing for 30x face value when silver was around $20 an ounce and melt value was half the numismatic value, will likely have significant downside protection if silver does go back down. These coins might might trade for straight melt in wholesale deals, but again, it may be difficult to find enough volume to make it worth the time.

I'm also not sure how you plan to short sell the gold/silver. Tax consequences and reporting are another issue and can make any potential arbitrage more trouble than it is worth for small potato profits.

Overdate

The problem is that "numismatic value" is a moving target. As bullion cost rises, it becomes more expensive to collect sets of silver coins, encouraging a switch to type collecting. The same thing happened to gold decades ago.

A circulated set of Franklin halves will now set you back $513 at melt. Even a junk set of Roosevelt dimes costs $140, with every date worth the same as every other date. In the 1960's, when silver coins were considered to be spending money and set collecting was the most popular numismatic pastime, circulated 1955-P Roosevelt dimes were fetching upwards of $1.00 each. Now the premiums on many key dates are stagnant or falling (the 1921 Peace dollar is a good example), while common dates continue to soar along with the price of precious metals.

Going forward, I think the only bullion-related coins likely to keep any numismatic premium are scarce types, not scarce dates. Some of the modern commemoratives might be a low-risk way to accumulate a stash of bullion, especially since many of these coins are being melted as scrap, and they are likely to become more scarce over time.

Julio

Well I was going to add my two cents but RedTiger and Overdate have in MHO covered all the bases. I concur completely with their sage advice. Take care. jws