Jo Ellen G. asks: How do I discover the value of silver dollars that I have? What or who determines a coin’s current price?
The question of how to determine what the coin market perceives as the value of coins and paper money is an important one. The market can be divided into several segments that include major Market Makers in each. A Market Maker is a company or individual who is willing to buy and sell the same or similar items at a fixed price in time. The spread between the buy and sell price is the potential profit that the dealer can earn.
Since markets are fluid, that is they change constantly, the Market Maker gambles that his “spread” reflects the market exactly at that moment. As this is becoming a economics lesson and beyond the scope of this column, suffice to say that this is where the price begins.
Some examples of coin market segments:
- Bullion dealers – sell precious metal items that trade close to their current metal value.
- Bulk U.S. Coin Wholesalers – coins like the dollars you mention are in this segment. These coins are semi-numismatic. That is, their value is a combination of metal value and numismatic value. Usually the cost per unit is low. They sell to retailers that sell to beginners and low-budget collectors.
- Auction Houses – Auction results often establish values for more expensive items. Private dealers that work with a relatively small customer base bid on behalf of their clients and often establish new levels for important coins.
Auction catalogs, trade newspapers and the internet report at what prices the Market Makers assign to various coins. You’ll notice that the coins are listed by date, mint mark and grade. When you evaluate your coins remember that the combination of these factors along with how scarce the coin is in relation to collector demand, all come together to determine price.
