Dear Dr. Don, I have quite a few very old silver dollars, dimes, quarters, etc., that I've been told are worth much more than their face value. Should I hold on to them in view of all the warnings that the dollar will be worthless and gold and silver will hold their value, or should I sell them? -- Laurin Longsilver
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Dear Laurin, If it were my money, I would start out by determining whether the silver coins are worth more to coin collectors or for their melt value as silver. That's largely dependent on the condition and rarity of the coins. You could do a once-over of your collection on your own to see if any of the coins are rare and use a coin-grading service for the last word on the value of any potential collectibles.
It's pretty easy to establish the melt value of your silver coins. You look up the market price for silver and multiply that by the weight of the silver in your coins. One Washington silver quarter from 1932-1964 contains 0.1808 troy ounces of silver. A troy ounce is a unit of measure for precious metals. When silver sells at $34.57 per troy ounce, its price as I write this column, that coin is worth $6.25 for its silver.
In the late 70s, a financial guru named Howard Ruff thought people should keep some of their money in junk silver to protect against a currency collapse. The argument, as I remember it, is that it's easier to complete a transaction with silver coins than it is by trying to get change in using a gold coin to buy something.
The survivalist argument aside, you're really asking what the dollar price of silver will be in the future. I can't answer that question. It takes a different type of guru.
Silver has fallen off its September highs of more than $42 and is now in the mid-$30s. In recent history, silver didn't break into the $20s until September 2010. Sure, silver hit the $50s in the early 1980s, but that's when the Hunt brothers were trying to corner the silver market.
My advice is to pick two price targets. Choose a low, in which you'd regret not selling if silver fell below that price, and a high, in which you'd be happy to get out even if silver went higher. If the cash price of silver hits either of those targets, sell your junk silver for its melt value.