Fridays employment report from the Bureau of Labor Statistics (BLS) had been eagerly anticipated by the markets, especially after the previous weekends Federal Reserve Jackson Hole conference where Janet Yellen waved the banner of data dependency for guiding future Fed rate hikes.

Coming out of the Feds central bankers confab, expectations for a September rate hike had climbed higher, although there were more than enough doubts about the economy to temper the markets projections. The August jobs report was to be data dependencys big moment to tell the market if or when interest rates would rise this year.

What we got from the BLS last week was a softer jobs number than many had anticipated151,000 new jobs created in August, compared with expectations of around 180,000 new jobs. The unemployment rate remained steady at 4.9% and hourly wages grew by 0.1%.

Not only did the August report undershoot expectations, it also represented a significant drop from the previous two months, when over 270,000 new jobs were created in both June and July.

The odds of a Federal Reserve September rate hike took an immediate hit after the release of the August report. As of Friday morning, the market saw around a 24% probability of the Fed hiking rates by a quarter-point at the September 21 Federal Open Market Committee meeting. Odds of a Fed rate hike by the December 14 FOMC meeting were around 50% as of the close of business on Friday.

Gold prices spiked to as high as $1326/oz right after the jobs report was released, but were settling lower by mid-morning. Gold investors would prefer to see interest rates remain low for longer, and the underwhelming employment numbers would seem to bolster that case.

The August jobs report was not entirely disappointingit wasnt as bad as Mays shocking job growth figure of just 24,000 jobs created that month. A number under 100,000 for August would have been more distressing.

If anything, Augusts weaker-than-expected employment report brings some clarity to potential Federal Reserve moves in the near-term (as in September). But as for the longer termmeaning, through the end of this yearthe picture for Fed rate hikes remains muddy. That uncertainty should help keep gold prices elevated over the next few months.

The soft job-growth number for August may also indicate an even slower pace for Fed rate hikes going forward. Last December, when the Fed raised the Fed funds target rate for the first time since lowering to near-zero during the 2008 financial market crisis, Fed officials had projected four rate hikes throughout 2016. That pace of rate increases was said to be gradual at the time.

Now, we may only get one rate hike at all for 2016at the last possible Fed meeting for the year. This clearly is not the gradual pace that the Fed intended last year. As long as the economic climate remains murkysolid employment but tepid growth and below-target inflationliftoff for Fed rate hikes will likely be delayed further, much to the delight of the gold market.

As small business owners know and understand well, the labor market is getting tighter. It’s getting harder and harder to find qualified employees to fill open positions. This first-hand experience was confirmed by the U.S. Labor Department’s latest jobs report. In July, U.S. employers created a higher-than-expected 225,000 new jobs.

Shifting winds: This triggered another shift in expectations regarding when and if the Federal Reserve will hike interest rates in 2016.

Just a few months ago: At the start of 2016, Fed Chair Janet Yellen and team were expected to hike rates gradually throughout the year with as many as three or four interest rate hikes forecast.

Boulders in the road: Early-year stock market volatility and concerns about Chinese growth, still-sluggish inflation levels in the U.S. and more recently the unexpected news from the U.K. to vote to leave the European Union widely known as Brexit have all splashed cold water on the Fed’s desire to “normalize” interest rates.

Gold prices initially softened on the better-than-expected employment news as it triggered speculation the U.S. Federal Reserve could tighten sooner rather than later.

But, here are three reasons gold investors don’t need to worry about Fed rate hikes.

The Fed’s benchmark interest rate called the federal funds rate — remains historically depressed well below normal.

The current fed funds rate stands at 0.25-0.50% –the central bank lifted the key rate off the zero-bound level in December 2017.

Even if the Fed were able to squeeze in one or two interest rate increases in 2016 it would still leave the federal funds rate well below the more historically normal 3.5-4.0% level.

History shows: Just look back at the federal funds rate level in 2005 prior to the global financial crisis that hit in 2008. The Fed funds rate ranged from a low at 2.50% to a high at 4.25%. The peak of that interest rate hiking cycle stood at 5.25% in June 2006. See Figure 1 below.

Why this matters: Even a marginal rate of increase in the funds rate in 2016 will keep interest rates at historically low levels in the United States.

Source

The Current Economic Expansion Phase in the U.S. Is Old

The U.S. economy moves in traditional expansion and recession cycles. That’s normal. As many business owners know first-hand, the current expansion phase never really hit full-speed.

Quick look-back: While the Great Recession ended in officially in June 2009, the current economic recovery phase has never hit so-called “trend” or historically average growth levels around the 3.5% level or higher on a sustained annualized basis. Instead the U.S. economy has been limping along with meager growth numbers well below the long-term historical averages.

Economics 101:The average length of a U.S. expansion cycle (trough to trough) is 69.5 months, according to the National Bureau of Economic Research (the arbiter of when recessions start and end in the U.S.). The U.S. economy is currently in its 86th month of “expansion.”

Key point: It’s long in the tooth. This current “expansion” cycle is running on fumes.

The current outlook: Wells Fargo Economics currently forecasts at 1.4% gross domestic product (GDP) reading in 2016 and the firm downgraded its outlook for 2017 to 1.9% from a previous 2.1%. It’s growth, but extremely sluggish by historical standards.

Why this matters: With the economy now in its seventh year of expansion, the odds are increasing that the next recession hits before the Fed has a chance to normalize interest rates back toward the 3.50-4.0% level.

This is gold-bullish and will keep monetary policy soft and negative interest rates in play as a possibility for the U.S. in the future.

Investment Demand For Gold Is Soaring.

Record investment demand was seen for gold in the first half of 2016, according to latest World Gold Council figures. See Figure 2 below.

Source

Gold demand numbers: Global gold demand reached 2,335 tonnes (t) in the first half of 2016 with investment reaching record H1 levels, 16% higher than the previous record in H1 2009, according to the World Gold Councils latest Gold Demand Trends report.

The strength of this quarters demand means that the first half of 2016 has been the second highest for gold on record, weighing in at 2,335t. The global picture for gold is dominated by considerable and continued investment demand driven by the West as investors rebalance their investments in response to the ever-expanding pool of negative yielding governmentbonds and heightened political and economic uncertainty,” says Alistair Hewitt, head of market intelligence at the World Gold Council.

“The foundations for this demand are strong and diverse, drawing on a broad spectrum of investors accessing gold via a range of products, with gold-backed ETFs and bars and coins performing particularly strongly,” Hewitt adds.

Diversify With Gold

Diversification is key to any successful portfolio. Individual investors who seek to diversify their portfolio can look to physical gold investment as a beneficial portfolio diversifier. The argument for diversification is to hold a variety of assets that are non-correlated to lower overall risk. Over the past 10 years, the average correlation of gold to the U.S. stock market has been close to zero, according to World Gold Council research[KB1][KB2].

Along with its traditional draw as a safe-haven investment, a vehicle to store and grow wealth, and an inflation hedge, gold has proven to be an excellent portfolio diversifier.

Why that matters: When stock prices fall sharply, gold has shown a tendency to rise.

Early in 2016 revealed an example of that phenomena. The numbers: Stocks down, gold investments up — The S&P 500 tumbled 5.5% lower through February 29, and gold stocks (a subsector of materials in the S&P 500) soared 43.6% in the same time period, according to data from S&P Global Market Intelligence.

Gold Buying Strategy

Many gold investors use a dollar-cost averaging strategy, or allocate a set dollar amount to gold purchases each month. It’s easy to get started buying gold coins. Learn more here.

Tip: Savvy gold buyers can fine-tune a dollar-cost averaging strategy to buy on price retreats.

Bottom line: The overall uptrend in gold remains positive. Gold dips have been used as buying opportunities all year, as physical buyers around the globe continue to build positions in the yellow metal. Savvy investors buy on price retreats.

Talk to the experts:Blanchardhas helped more than 450,000 investors with expert consultation in the acquisition of bullion. Contact us here.

Gold tends to get more attention from the markets than silver. Golds performance through the first half of 2016up over 25% for the six months grabbed more headlines in recent midyear market reviews.

But silver has bested its yellow metal brethren so far in 2016. Through the first half of 2016, silver prices appreciated more than 38%.

Silvers out-performance has many more people looking at it as an investment alternative to gold. The entry price is much lower between $18-19 per ounce as of this writing, compared with over $1300 per ounce for gold. While both metals are considered precious, there are distinct differences between using gold and silver as part of your wealth management plan.

Between gold and silver, which is a better investment? Here are some pros and cons to consider:

Silver has greater abundance

There’s generally more raw silver in the world to be mined than gold, which helps explain the wide per-ounce price difference between the two precious metals.

But it’s important to consider how the dynamics of supply and demand work in driving the silver market. Demand for silver has gradually increased since 2010, according to a Bloomberg analysis of data from CPM Group. (See chart below.)

Over that same period, supply increased but has not risen to the same level as demand. This gap between silver supply and demand has contributed to silvers strong performance so far this year.

Estimates from earlier this year show silver supply in 2016 dropping for the first time in five years. So even as demand increases, the supply in the marketplace will likely not keep pace, setting the stage for prices to increase.

Silver has more industrial uses than gold.

Demand for silver is driven in large part by manufacturers using the raw metal in production processes. One estimate placed industrial demand for silver at over 50% of total demand. For gold, the industrial share of demand is estimated at only 10-15%.

As a raw material, silver goes into the manufacturing process of a wide range of products, from surgical tools to batteries to electrical components.

While these greater uses for silver can influence demand for the metal, it also means the price of silver can be closely tied to the business cycle. When manufacturing activity slows in an economic contraction, demand for silver will likely dry up and its value will decline.

Gold as an alternative currency

Investors look to both precious metals for generally the same reasons they’re seeking to grow their investment through price appreciation, or they’re looking to shelter their wealth when other asset classes pose higher risks.

Gold has a greater allure as a store of value among investors looking for wealth preservation. So when market anxiety is running high and investors are seeking to convert their paper wealth into real assets, gold tends to garner more attention than silver.

But silver can a play a role in wealth preservation too, especially for investors looking to diversify their precious metal allocation. Gold and silver historically have not had a symbiotic relationship. In fact, the price relationship between the two metals has fluctuated constantly over time.

Looking at the gold/silver price ratio over the past 10 years (see chart below), you can see periods where silver was undervalued relative to gold (identified by the peaks in 2008-09 and more recently in 2016.

Gold is easier to store.

An ounce of gold and an ounce of silver weigh the same, of course. But in dollar terms, $10,000 of gold (around 7.5 ounces at current prices) is much smaller in size than $10,000 of silver (over 500 ounces at current prices.) Just because of the price differences, you don’t need as much space to store the same dollar amount in gold as you would in silver.

Gold also has a greater density than silver. A 10-ounce gold bar is around half the size of a 10-ounce silver bar. (This video shows a good demonstration of the difference.) That also makes gold bullion more attractive as a safe haven you can get a smaller safe deposit box or personal safe to store your physical gold in bars or coins.

Whether you’re considering a purchase of gold or silver as a long-term investment, be sure to weigh the advantages and disadvantages of both metals with a wider perspective of your overall wealth preservation plan.

Rare coins are valuable to collectors due to their scarcity, but those with a unique story behind them are among the most collectible specimens in the marketplace.

Here are four U.S. silver dollars that have achieved legendary status, thanks to their background and recent auction activity.

Flowing Hair Silver Dollars

The first dollar coins to be issued by the U.S. Government, these coins were minted for only two years: 1794 and 1795. Only 1,758 of these dollar coins were produced in the first year, and those were intended for use as souvenirs rather than legal tender.

Although the first specimens produced were deemed at the time to be of poor quality, these dollar coins have become among the most highly prized collectibles with numismatists and investors. A mint-grade specie sold at a record price of over $10.0 million in 2013.

Draped Bust Silver Dollars

These coins replaced the Flowing Hair silver dollars, and production ran from 1795 through 1803. The first Draped Bust dollar coins included a small eagle on the reverse side, which was replaced by the more common heraldic eagle in 1798.

The minting of all silver dollars was suspended in 1806, but production of the Draped Bust variety had stopped prior to that. A mintage of 1804 Draped Bust silver dollars was struck, but these coins were actually produced in 1834, to be used as gifts for trade visits by U.S. representatives to Asia.

Now, these 1804 specimens are among the most valuable and highly prized Draped Bust silver dollars. A mint condition specie sold at auction for $3.8 million in 2013. More recently, one collector bid over $10.5 million for a Draped Bust silver dollar at a Sothebys auction, but the bid did not meet the reserve price.

Seated Liberty Dollars

These one-dollar coins were minted in the US starting in 1840, and continued for over three decades. The passage of the Coinage Act of 1873 temporarily halted production of silver coins, and the Seated Liberty dollars were replaced by trade dollars.

During the years when the Seated Liberty dollars were minted, the California Gold Rush also occurred. The increased supply of gold made silver more valuable on a relative basis. Silver producers preferred bullion to currency due to the elevated prices, and few brought the metal to the mint to be struck into coins. As a result, the production runs for Seated Liberty dollars were small.

The motto In God We Trust was added to the reverse in 1866. Seated Liberty dollars that were minted before 1865, without the motto, are generally more highly valued, especially those of proof-grade quality.

1870-S Silver Dollars

Only 12 of these silver dollars are known to have been produced, making them among the rarest coins of this denomination according to coin experts. These specimens were struck at the San Francisco Mint in its inaugural year, but the coins themselves lack any mint marks, and no record exists of their production.

A mint-grade 1870-S Silver Dollar sold for $1.0 million in 2003, reflecting the rare and highly desirable nature of these coins. Future sales will likely fetch six figures, while those of the finest quality can be expected to sell above the 2003 auction price.

In a bumpy week for gold trading, the precious metal edged slightly higher for the second consecutive week, with most of the gains coming from the days leading up to the much anticipated Fed meeting minutes. As soon as the minutes were released online Wednesday, gold futures for December delivery were so volatile, prices ranged from $1,340.50 to $1,352.60 per ounce within the span of about two minutes.

Among other things, this powerful reaction to the details of the meeting displays the Federal Reserves impact on the gold market, because traders and investors are looking to dissect every last word of the meeting in hopes of gaining clarity on rate hike timing.

The minutes very clearly showed that Fed policy makers are not willing to raise rates until they are fully in agreement on the outlook of the US economy. Naturally, the idea of Fed officials not wanting to damage the economy by raising rates prematurely is beneficial for gold, so prices rapidly recovered from the initial sell-off to $1,340.50.

The minutes also showed that many Fed officials want to hold off on a rate hike until they see further signs of economic growth and inflation. Jim Steel, an analyst at HSBC, noted the longer the Fed delays a rate rise, the better for gold.

Besides the fact that low interest rates are generally thought to be favorable to gold, the idea that the US economy may not be as robust as it seems could have also contributed to the intraday rally.

Nevertheless, gold managed to lose some steam and didnt finish the week as strong as many analysts expected. Gold has traded between $1,360 and $1,340 per ounce for the last three weeks with the exception of three days where it broke above $1,360, but this was evidently not sustained.

Markets across the board are famously quiet this time of year, so volume is light and liquidity is often scarce. Therefore, rapid, knee-jerk like reactions (like after the release of Fed meeting minutes) are to be expected since there is limited market depth to absorb large buy or sell orders.

Comments from New York Fed President William Dudley and San Francisco Fed President John Williams spurred a minor sell-off for gold on Friday. Since there is not a significant amount of economic date coming out, investors are observing Fed officials very closely for any cues on interest rates. The slightest comment that vaguely hints at when or if a rate hike might occur can have shockingly dramatic impacts on gold.

With that said, investors should buckle up. In the coming week, Fed Chair Janet Yellen (along with a host of other central bankers)will be speaking at the annual Jackson Hole Monetary Policy Conference on Aug 26^th. For an event that only occurs once a year, and with Fed officials who are clearly timid about the US economy, the impact on gold should be dramatichopefully to the upside.

Safe havens for cash are quietly disappearing, under new rules for money market funds that go into effect October 14, 2016–just two months away.

Redemption fees and restrictions on fund withdrawals will make prime money funds less attractive to investors who want ready access to their cash during periods of high market risk. Many will look toward gold as a more liquid alternative and a historically strong store of value.

The new rules have already had an impact on the money market fund landscape. Tax-free institutional money funds have started to disappear from the market. According to iMoneyNet, the number of tax-free institutional funds is down from 95 in July 2014 (the month when the new rules were announced) to just 38 this past June.

Fund companies have had two years to prepare for these changes, and many have already changed their money fund lineup in advance of the new rules.

Lets look at these primary changes that are coming this October, and how the simple diversification into a gold position could alleviate the growing risks involved in your cash positioning

Redemption restrictions

Starting that day, prime money funds–defined as those that invest in corporate and municipal bonds along with government and agency debt–will be permitted to enact temporary withdrawal restrictions or charge fees for fund redemptions in times of market stress.

The purpose of this rule is to prevent a run on a money market fund similar to the one that crippled The Reserve Fund during the 2008 financial market crisis.

Money market funds have traditionally been used as a safe haven for investor cash and to provide ready liquidity should investors need to make withdrawals.

The new redemption fees and withdrawal restrictions mean investors may not be easily able to access their funds when they may need them most.

Fee and withdrawal restriction rules apply to both retail and institutional prime money funds. Those money funds that invest exclusively in government and government agency debt (known as non-prime or government money market funds) are exempt from this rule.

Floating NAVs

Another significant change coming this October is floating net asset values (NAV) for certain money funds. Historically, money funds strive to maintain a per-share price of $1 to provide capital preservation for investor deposits. It was never guaranteed that money funds would maintain stable net asset values. But all money funds sought to avoid breaking the buck to preserve investor confidence.

Under the new rules, prime institutional money funds (those that cater to large investors and invest in corporate and municipal securities) will have to allow their net asset values to float or fluctuate in value. Thats a significant change from the traditional objective of stable value that these funds have long sought to achieve.

Gold is a traditional holding of true wealth holders and comes under no threat of government rules change. Controlled by you, the investor, gold allows you real freedom to control your wealth management and is a growing advantage desired in this turbulent financial age.

How bad can a fund run be?

Weve already seen how devastating a run on the money market fund can be to investors. A run may start small, but redemptions can cascade and create an avalanche that leaves existing shareholder to wonder how their stable money fund suddenly became unstable.

Thats what happened in September 2008 to The Reserve Fund, one of the oldest and largest money funds in the marketplace. The Fund held about $800 million in Lehman Brothers securities when the investment bank went belly-up. That investment represented around 1% of the total fund assets.

But when that $800 million dropped to zero due to Lehmans bankruptcy, it was enough for the The Reserve Fund to break the buck and trigger a shareholder stampede for the exits. $40 billion of the funds $62 billion in assets was gone by the day after the Lehman collapse. The Reserve Fund halted withdrawals for seven days, then eventually cashed out the remaining shareholders at 99 cents per share.

Money funds will soon be able to slow redemptions and control future runs on their assets. But money fund investors will bear much of the burden, either through redemption fees that reduce the value of their cash holdings or withdrawal restrictions that prevent ready access to capital.

Thats why gold may become more appealing to investors look for an alternative to money market funds for their cash. Gold can be easily and readily sold in the marketplace, providing adequate liquidity when investors need cash. Plus, gold has traditionally been a strong store of value over the long term (although values fluctuate often within short-term periods.)

A new money fund world

If you currently have cash in a money market fund or are considering a money fund as a stable value alternative, do your homework first to understand how these new rules affect fund pricing and redemptions. And remember, gold is an excellent store of value and offers readily liquidity in all market environments.

Founded in 1975,Blanchard and Companyhas been the premier source for clients who invest in precious metals and rare coins. To join the more than 450,000 clients already investing wisely, give us a call today.

Gold prices are up 25% for the year-to-date through August 8th. Thats better performance than most major asset classes have turned in so far this year.

After this torrid run, you might expect professional investors to cool on the precious metal. Instead, love for gold continues to burn brightly for some leading money managers.

Two prominent U.S. managers recently made separate but similarly dramatic announcements about gold — forget about nearly all other asset classes and turn your attention to gold.

Thats exactly how I feel sell everything. Nothing here looks good. That was Jeffrey Gundlach, chief executive of DoubleLine Capital, quoted in a July 30 article on Reuters. Gundlach believes in an upside for gold and sees prices continuing to rise to $1,400 per ounce. His firm continues to own gold and gold mining stocks in their portfolios.

Then theres Bill Gross, renown fixed income investor and manager of the Janus Global Unconstrained Bond strategy. I don’t like bonds; I don’t like most stocks; I don’t like private equity, he wrote in his August 2016 monthly commentary. Real assets such as land, gold, and tangible plant and equipment at a discount are favored asset categories.

Why are these two leading money managers so enamored of gold right now? Its what they and many other professional investors see in the current market environment–too many risks and not enough return to reward investment.

The twin forces of higher risks and lower returns create ideal conditions for gold prices to continue their upward trajectory. Among the higher risks are:

Elevated valuations — Major indexes like the S&P 500 are in record territory but earnings growth for S&P 500 companies is on the decline. For companies that have reported 2nd Quarter earnings so far, FactSet reports earnings growth is down -3.5%.

Stocks appear to be overvalued at current market levels. Higher prices and lower earnings means the current P/E ratio for the S&P 500 remains above its 5- and 10-year averages.

Weak global growth — U.S. economic growth has been at or below 2% for four consecutive quarters, with the annualized rate for Q2 2016 coming in at 1.2%. The current U.S. economic recovery has been notably weak, but things are better here than in other parts of the world: quarterly GDP in the Euro-area has been below 1.0% for two years, while quarterly GDP in Japan has flip-flopped between growth and contraction over the past year.

Theres reason to be optimistic about future economic growth in the U.S. with continuing strength in the job market. The improving outlook may give the Federal Reserve the green light to resume interest rate hikes later this year.

But the investment markets dont seem to share the same view. According to the Fed funds futures market, odds that the Fed raises rates at all by its December meeting at not even at 50% as of August 8. That means many market pros expect sluggish worldwide trends to persist, enough to keep the U.S. central bank on the sidelines for the rest of the year.

Political uncertainty — Earlier this year, political dark clouds gathered over Britain and Europe with the results of the Brexit vote and the U.K.s decision to depart the European Union. Concern is spreading that copycat breakaway movements will emerge in other E.U. countries and weaken economic growth on the continent.

But uncertainty also darkens the outlook for the worlds one shining beacon of optimism, the United States. The current presidential campaign has been one of the most contentious in history. And Election Day is still three months down the road. Gold should continue to shine as the level of anxiety increases.

Higher risks would be fine if investors see prospects for returns equal to the risks. But thats far from the current situation. Many money managers expect low returns for the foreseeable future. Here are a few reasons:

Low bond yields — Fixed income investors continue to be squeezed by historically low rates on bonds. While U.S. government bond yields seem to have found a floor of support as of late, yields on U.K. government bonds have dipped following Bank of England interest rate cuts, and yields on many Japanese and Eurozone bonds are negative.

Many market watchers are focused on negative government bond yields, for good reason. The amount of global government bonds yielding less than zero continues to grow. The World Gold Council (WGC) sees around 40% of global developed market debt with negative yields.

Much of the outstanding government debt is in the hands of global central banks, leaving less for fixed income investors. WGC also estimates that for global government bonds with yields above 1%, only 17% is available to investors.

Stock market vulnerability — Stock investors have seen multiple market shocks in the last 12 months, from last Augusts currency devaluation in China to the Brexit vote in the U.K. this past June. Many investors see these short downturns and sharp rebounds as part of the new normal in the global financial markets.

With stocks hovering at record highs, the possibility of future market shocks and continued volatility will grow. Stock analysts are tempering their expectations for returns in the second half of 2016, based primarily on these heightened risks. Equity performance may still come out on the positive side, but many professional investors believe gains will be harder to come by in the next few months.

All of these factors make gold more attractive in the eyes of money managers — not only for its traditional safe haven status in times of economic stress, but also as an asset class with the potential to provide growth for investors.

Founded in 1975, Blanchard and Company has been the premier source for clients who invest in precious metals and rare coins. To join the more than 450,000 clients already investing wisely, give us a call today.

Morgan dollars have been popular among rare coin collectors over the years. Investors continue to find value in the late 19^th and early 20^thcentury silver dollars when pricing them at auction.

A 1882 Morgan dollar with a rare grade of MS-66+ by PCGS recently fetched $9,900 at a July auction.

Morgan dollars attract the interest of collectors and investors because of their large size, distinctive design, and different variations. They are ideal for collectors looking to build sets, with four different obverse and reverse designs and five different mint marks.

These coins have an interesting history behind them as well. They were at the center of a long back-and-forth battle in the late 19^th Century between silver interests and those who backed a single gold standard for the U.S.

Morgan dollars emerged as a response to the Coinage Act of 1873, which effectively ended silver dollars as legal U.S. tender. Around that time, the price of silver was low due a glut in supply from newly discovered mines in Nevada. Silver producers could take bullion to a mint to have coins produced for a small fee, and profited when the price of the silver bullion was lower than the value of the coin.

Increased circulation of silver dollars challenged the standing bimetallist policy of both gold and silver as accepted legal tender in the U.S. The Coinage Act of 1873 effectively (although perhaps not intentionally) ended that challenge and placed the U.S. firmly on the gold standard. That position would last into the early 20^th Century.

But different business and regional interest groupsfrom silver mining companies in the West, to farmers in the Midwestremained supportive of the bimetallist policy. They wanted to re-introduce silver dollars as a means of promoting economic prosperity during the long recession of the 1870s.

Eventually, lawmakers from Midwestern states drafted legislation that would bring back silver dollars as legal U.S. tender. President Rutherford B. Hayes vetoed the bill when it landed on his desk, fearing a surge in inflation that would hurt businesses, but his veto was overridden and the Bland-Allison Act became law.

The Bland-Allison Act committed the U.S. Treasury to monthly purchases of silver bullion to mint into silver dollarsthese became the Morgan dollars, named after the coins designer, George T. Morgan. The Bland-Allison Act was repealed two years later by the Sherman Silver Purchase Act, which sought to end silver dollar production within one year. That law was repealed as well.

Production of silver Morgan dollars continued between 1878 and 1904. In 1898, another law directed the Treasury to mint the remaining silver purchased by the Sherman Act into silver dollars. Once that inventory of silver was depleted, Morgan dollars would no longer be minted (although a one-time mintage in 1921 did occur.)

These silver dollars never gained widespread acceptance as currency at the time, and banks discouraged their use. Millions of Morgan dollars never saw the light of day, remaining out of circulation and locked in vaults at the U.S. Treasury for many decades.

These dollars were eventually released for sale during the 1960s and 1970s. At the time, the release of these uncirculated Morgan dollars depressed the values of those specimens that were in collectors hands.

Morgan dollars are often available at auctions today for investors and collectors looking to build sets of different Morgan dollar varieties. Especially for those rare specimens in top condition, their current values make them worthy of consideration for serious investors and collectors.

Trusted by both experienced investors and those just starting out, Blanchardprovides expert consultation in the acquisition of bullion and American numismatic rarities. Give us a call today.