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There are so many factors that determine the value of silver coins. As an investor, you should always bear in mind that there is a great difference between the price and value of silver. Most people assume that these two words have the same meaning but from a business perspective, they are totally different.
The price of silver coins refers to the amount of money the buyer should pay the dealer when purchasing these coins. On the other hand, the value of silver coins refers to the amount of money the dealer is willing to pay to acquire silver coins from the seller. After understanding how these two phrases differ from each other, you should now take your time to find out the major factors that determine the value of silver coins.
Some countries do not manufacture new coins of the same model especially at the end of the year. This means that when the year ends, some specific coins are destroyed and declared unfit for use. This affects their supply since silver coin dealers and buyers will no longer be interested in trading with worthless silver coins.
Some silver coins normally have a higher demand than others due to various factors. For example, the 1913 Liberty Head Nickel had a higher demand during the great depression after B. Max Mehl announced that he would give $50 to anyone with this type of coin. This increased its demand since many people were interested in making more money by collecting such coins.
The Melt Value
This refers to the value of the type of metal used to create that particular coin. For example, back in 1965, the U.S. decided to substitute silver with base metal to be used during the coin production process. This latest development greatly affected the value of coins manufactured after 1965 but on the other hand, it increased the demand for coins manufactured before 1965. Similarly, when the price of silver falls or rises, the same change affects its value.
The Condition of the Coin
Uncirculated coins normally have a higher value than circulated versions due to obvious reasons. It is the wish of every coin collector to find those types of coins that contain no stains or signs of rust due to regular use or circulation in the market. Coins that look new and well-maintained tend to have a higher value since they are generally attractive. However, for coin collectors to find such types of coins, they have to collect and keep them safe to avoid further circulation. The scramble for uncirculated coins leads to a higher demand and value.
The Stock of the Dealer
This factor varies from one dealer to another depending on the available stock. For example, if the dealer’s stock is full of coins of a particular model, their value will decrease in order to sell them quick and reduce congestion. On the contrary, if you want to sell a coin of the same model to the same dealer, you will have to settle for a lower price since the dealer already has enough of it.
The value of the silver coin can also increase if the dealer has a lower stock and is currently looking for ways to increase it. This is why it is always advisable to ask for quotes from various silver coin dealers before deciding where to sell or buy. These are some of the major factors that determine the value of silver coins throughout the year and as an investor, you should always take your time to analyze when it is wise to invest and how to manage your investments.