Dear Smart Money Reader,
It wasn’t more than ten years ago that I was meeting in my office with former U.S. Mint Director Donna Pope. She was speaking with pride about what she considered to be her greatest achievement as Director under President Reagan: Creation of the American Eagle silver and gold bullion coin programs, the first of their kind in our nation’s history.
The purpose of these coins was to give people the opportunity to own physical silver and gold in a form certified as to weight and purity by the U.S. Mint. Congress later authorized them to be used in IRA plans. While the bullion coin program was a signal success, there was one consequence neither she nor I foresaw back then.
Nobody took into account the collector market, and the profound impact it would have on these coins. It turned out that American Eagles bullion coins—especially the silver dollars—became enormously popular with today's generation of collectors, who build sets of them by date, mintmark and condition.
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Silver Eagles = Today’s Morgan Dollars
In the 1800s and early 1900s, the U.S. Morgan silver dollar was struck year upon year at various mints and went into commerce at face value, which was then a small premium over their silver content. Like today’s Silver Eagles, their core value was in their precious metal content. In modern times these coins have become the bedrock of the collecting world, coveted by millions. In top grades, Morgan silver dollars can sell for tens and even hundreds of thousands of dollars each. All the highest graded Morgan Dollars of every date and mint mark are beyond the reach of all but the wealthiest collectors.
As today’s collectors saw the Silver Eagle series unfold from its start in 1986, some realized there was a literal “ground floor” opportunity to acquire the top grade coins as they were released. They started submitting Silver Eagles to the leading independent grading services, PCGS and NGC. They prayed that the coins would come back with the highest possible grade: MS70 (all Uncirculated coins are graded on a point system from a low of 60 to a high of 70, with 70 representing flawless perfection). Then the market began to take off.
MS70 = $$$$$!
Fast forward to now. Today, most every Silver Eagle struck since 1986 is worth about the same thing: A small premium over the spot price of an ounce of silver. But for those coins that earned the top grade of MS70, it’s a different story: Of the hundreds of thousands of Silver Eagles sent to PCGS for grading through 2007, only 1 in 21,194 was given the coveted MS70 grade!
In the rarified atmosphere of MS70 (a "70" is a perfectly graded coin), Silver Eagles have soared to market prices that I can only characterize as surreal. Consider this: The PCGS market price guide only ventures to list MS70 values for a few of the 23 years of these series so far, with nearly all trading at eye-popping prices:
1986 MS70 Silver Eagle — $4,000
1988 MS70 Silver Eagle — $4,000
1995 MS70 Silver Eagle — $4,000
1997 MS70 Silver Eagle — $3,000
1998 MS70 Silver Eagle — $2,500
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Lightning Strikes Twice:
A Fabulous MS70 Silver Eagle Deal
Given the stellar performance of PCGS MS70 First Strike Silver Eagles, I’ve been trying to snag any quantity of them for years now. Then out of nowhere, lightning struck when the CEO of America’s largest wholesale bullion brokerage supplied us with the last of the 2008 Silver Eagles in the coveted MS70 grade. (His firm literally supplies our government with the blanks used to make U.S. Silver Eagles).
I was lamenting the fact that we ran out of those 2008 MS70 Silver Eagles so quickly, leaving thousands of customers hanging. He sympathized with our plight. “Well Nick, the 2008s are history, but we’re going to submit a quantity of 2009 Eagles to PCGS immediately when they’re released to us in January. There’s no telling how few may come back with the perfect MS70 grade, but if you give me a firm written advance order then you can have every one that does.”
I wasted no time in negotiating the purchase and signing the contract. Who says lighting never strikes twice?
It Just Keeps Getting Better
I was thrilled to lock up a guaranteed supply of Perfect Gem MS70 Silver Eagles from a Primary Distributor who gets them direct from the U.S. Mint. (This is a coin you cannot buy direct from the Mint). Moreover, every coin would be certified and encapsulated by the Professional Coin Grading Service (PCGS), one of the top two firms for grading coins. But better yet, because we’ll get the very first coins released from the Mint, they will have the value-enhancing “First Strike” designation.
What does “First Strike” mean? PCGS designates only those coins it certifies as having been released during the first 30 days of issue as First Strike®. Collectors place a premium on these coins because they are struck from freshly-made dies, thought to impart superior quality. Only a miniscule number of the mintage gets the First Strike pedigree.
This First Strike certification can turbo charge the value of an already valuable MS70 coin. For example, a 2006 20th Anniversary Silver Eagle from the West Point Mint is valued at $2,000—but add the PCGS “First Strike” pedigree and the value skyrockets to $3,150!
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