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The Coin Analyst: Collectors Crying Over Milk-Spotted American Silver Eagles

The Coin Analyst: Collectors Crying Over Milk-Spotted American Silver Eagles

Investors, on the other hand…


By Joshua McMorrow-Hernandez for CoinWeek.com …..

If you’re seeing small, white spots on your American Silver Eagles and wonder what those unsightly imperfections are–and why they’re there–you’re not alone.

The numismatic community first took note of so-called “milk spots” several years ago and is still trying to determine both the cause and the cure. In many cases, reports of milk spotting are on raw, bullion-quality silver coins. However, what really causes collective aggravation is the persistent presence of milk spots on numismatically-significant, slabbed Silver Eagles. Many of these blighted Silver Eagles are MS-68, MS-69, or MS-70 coins that started developing the dreaded spots after encapsulation.

Coin forums are loaded with theories from seasoned experts in the field. Many trace the cause of these tiny white spots to a wash the U.S. Mint is using. Specifically, the culprit appears to be detergent residue that isn’t rinsed off before the .999-silver planchets hit the annealing furnace. As the cleaned silver planchets get heated to scorching temperatures exceeding 1,000°F, any leftover detergent solution is inadvertently baked into the surface of the coin. The woeful chemical reaction between the baked-in detergent and the coin’s metal may take weeks, months or even years to surface.

When or if it does, it’s usually to the disappointed, even angry, reactions of coin collectors.

Noted coin expert Anthony Swiatek says high-grade American Silver Eagles are “plagued” by milks spots. Many high-grade Silver Eagles don’t begin presenting them until long after they’ve been inserted in sonically-sealed plastic, leaving some to wonder if the encapsulation process itself hastens spot formation.

Inevitably, the milk spot issue landed in the laps of experts at third-party coin grading companies years ago, when coin collectors first took notice of the spotty situation. At the Professional Coin Grading Service (PCGS), the standards used for evaluating the condition of an American Silver Eagle changed almost a decade ago.

According to a 2007 statement from PCGS, the company was once “reluctant to grade any Silver Eagles MS-70 because of the significant possibility of future milk-spotting on the surfaces of the metal, which often seem to appear after the coins are minted and even after they have been graded.”[1] That year, PCGS began grading American Silver Eagles from 2006 and 2007 based on the condition of the coins at the time they were graded, without regard for the potential of future milk spotting.

As for awarding a coin the prestigious MS-70, PCGS asserts the standard remains “flawless surfaces under 5x magnification.”

Miguel Murillo, a customer service representative at PCGS, further outlines the company’s policy today.

“We’re doing what we call a modern spot review,” he told me over the phone. “For a fee of $5, plus shipping and handling, we will evaluate your coin, remove the spots, and then return your piece.”

He says the service is applicable to all American Silver Eagles dating back to 1986. The policy does not apply to older coins, which he said would be treated as restorations and are handled on a different fee structure.

As PCGS points out, milk spots indeed trace their origin back to manufacturing issues at the U.S. Mint. As much was affirmed by U.S. Mint Quality Division Chief Stacy Kelley-Scherer, who, in 2012, remarked that the white spots on American Silver Eagles are attributed to minting procedures. Unfortunately, Kelly-Scherer went on the record as saying that the U.S. Mint has not been able to find a panacea for preventing milk spots.

Part of the problem the Mint and others in the numismatic community see is that milk spotting isn’t a black and white issue with a tried-and-true solution. As PCGS succinctly stated in a 2012 policy update, “there seems to be no rhyme or reason as to why some coins spot and others don’t.”[2]

Anthony Swiatek Anthony Swiatek

Milk spots appear on bullion, proof, and uncirculated Silver Eagles from all minting facilities, and may appear as a single spot or in large, blotchy patches across fields and devices. They’re even turning up on U.S. silver commemoratives and other modern coins.

And these troubling white spots aren’t just a U.S. coin phenomenon–they’re running amok on modern silver coins from Canada, China, and Australia.

The Royal Canadian Mint (RCM) owes the milk spots on its coins to the planchet cleaning and preparation process. They’re taking a more laissez-faire approach, however. The RCM says their one-ounce silver bullion maple leaf coins are just that – bullion coins intended for metals investors, not collectors. The powers that be at the Mint in the Great White North also state that the problem has persisted on their silver bullion coins since Maple Leaf silver coins first debuted in 1988.

In short, RCM officials say they can’t do anything about the spots. At this point, it seems there isn’t much hope that the RCM will be putting white-coated scientists on the scene to remedy the problem anytime soon.

As mint officials on both sides of the northern United States border and overseas grapple with milk spot dissension, coin collectors the world over are scratching their heads and hitting the Internet for answers–and elixirs. “Remove white spots Silver Eagles” is a search term that yields more than 100,000 results on Google, and the cringe-worthy solutions found online run the gamut, from hairline-inducing jewelry wipes to the utterly abrasive baking soda and toothpaste. Ever-popular silver dipping agents are also frequently mentioned as a potential fix.

Swiatek, ever the numismatic expert, has some savvy advice on milk spot removal. Acetone, as many coin collectors know, is commonly used as a safe method for removing PVC residue and other foreign matter from coin surfaces.

“Chemically pure acetone may work in removing the spots,” Swiatek advises. Of course, if you decide to go the acetone route, be sure to hit the hardware store. Most of the acetone-based nail polish removers you find in the beauty supply aisle of your local grocer aren’t pure acetone and often contain additives that could damage your coin.

Milk spots are bad enough, right?

Before crossing your fingers and dropping acetone on your milk-bespotted silver coins, be sure to take the proper safety precautions. Only use acetone in a properly ventilated area, wear gloves, and keep the flammable chemical away from sparks and flames.

Milk-spotted Silver Eagles–and those that were abrasively cleaned–are causing some coin dealers to reconsider the pricing methodology behind these popular silver coins.

Swiatek says coin dealers absolutely should price their slabbed Silver Eagles respective to the present quality of the coin inside the plastic, not the grade on the holder.

“Of course, from the bullion standpoint, lower-grade Silver Eagles with spotting aren’t a big matter in terms of price,” he observes, speaking to the fact that most bullion-quality Silver Eagles under MS-67 are only worth close to their intrinsic value anyway. “The issue I’ve seen is that many of the spotted pieces are slabbed in the high grades, and this is a major problem for coins that have a MS-69 or MS-70 grade,” Swiatek observes.

In situations where a slabbed, milk-spotted MS-69- or MS-70-graded American Silver Eagle (or PF-69 or -70, for that matter) comes to market, haggling and negotiations between a coin buyer and coin dealer may arise.

Despite the presence of milk spots, this conditionally rare 1999 Silver Eagle sold for more than $20,000.

“Coin dealers need to be fair,” Swiatek cautions.

At APMEX, one of the leading distributors of American Silver Eagles and other bullion coins, there is little mention of white spots. There is, however, an offering of off-quality American Silver Eagles. With silver prices at $18.00 an ounce as of this writing, these cull, damaged, and spotted Silver Eagles are individually selling for around $22.10 if under 20 are purchased at one time and $20.62 per in bulk orders of 500 or more–lower than any other Silver Eagle offering on the company’s site.

While this doesn’t necessarily address the pricing policy of, say, a slabbed (and milk-spotted) MS-69 American Silver Eagle, what remains perfectly clear is this: bullion investors who don’t care about the appearance of their American Silver Eagles have plenty of cheap, government-issued bullion coins to stash away in their portfolios.

Diehard numismatists, on the other hand, may be in the painfully tedious position of having to evaluate the buy and sell prices of American Silver Eagle coins–or any other spotted coins–on a case-by-case basis.

Browsing the bourse for Silver Eagle steals may have gotten easier, as coin dealers like Swiatek and others rightfully address the fact that milk-spotted Silver Eagles shouldn’t necessarily sell for the same price as similarly-graded but spotless pieces.

Coin buyers, meanwhile, must weigh the risks of buying high-grade American Silver Eagles that look flawless now but, in time, may reveal pernicious white spotting.

Perhaps 50 or 100 years from now, American Silver Eagles from the 1980s and ‘90s that somehow remained flawlessly untouched by milk spots may be as scarce and desirable as Full Head Standing Liberty quarters or Full Bell Line Franklin halves.

Imagine that!

Indeed, the day may come when numismatists willingly pony up hundreds of dollars for choice, spotless specimens of an otherwise common American Silver Eagle. Surely, heated debates will ensue in numismatic circles about deciphering “doctored” versus “original” American Silver Eagles, much like some Lincoln cent enthusiasts scrutinize decades-old “red” Lincolns for any sign of past dipping.

Whatever the milk spot quandary holds for the present (and future) of American Silver Eagles, coin collectors, coin dealers, and third-party coin authentication professionals can remind themselves of this: milk spots aren’t the first coin grading fiasco the numismatic world has experienced, and it won’t be the last.

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[1] http://www.pcgs.com/News/Pcgs-Guidance-For-Ms-70-Silver-American-Eagles

[2] http://www.pcgs.com/silver-coins-spot-policy/

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  1. I have run into a few Canadian Maple Leaf’s with these spots. I think the Canadian Royal Mint has the right attitude. I don’t think the US Mint can take a similar stand though because they charge a lot over spot for the more collectible proofs and alternate mint marks. You make an interesting speculation about 50-100 years from now!

    • I would strongly disagree about the Canadian Royal Mint. They produce many, many products that are significantly above spot (think privy marks, Birds of Prey, etc). It really is disgraceful that ANY mint is knowingly selling an inferior product. If these institutions don’t want to take care of the hand that feeds them, don’t be too surprised if people march their money elsewhere. Isn’t there any pride in what they produce? This is not 2000 years ago. The ability to research and resolve the problem is clearly there.

  2. Great article, disturbing though. After reading I had to take a close look at my ASE UNC. coins, to my dismay most of my coins whether graded or still in OGP have noticeable spotting under a loop. I’m now beginning to wonder if future liquidation plans could bring a lower price. I hope the US Mint can remedy this problem, as I will not continue to collect a Mint offering that turns bad looking after one year. Very…very unhappy with this US Mint problem!!

    • “We’re doing what we call a modern spot review,” he told me over the phone. “For a fee of $5, plus shipping and handling, we will evaluate your coin, remove the spots, and then return your piece.”

      Why does PCGS not know anything about this when you call them?

  3. I too found that some of my slabbed SAE coins developed spots while in my storage. And these were selected and purchased a couple years after their minting. I was really disapointed.

  4. I wonder what happened to those coins in the mint, to make them develop milk spots. As a collector, I would be super disappointed if my coins developed spots along the way. That would really bum me out.

  5. I have found the Canadian Maples to be the worst in both the number of affected coins and the amount of milk spots on any given coin. I also find it interesting that you don’t find this problem on private mint silver.

    • Excellent point. I have never seen milk spots on Engelhard Prospectors. Gov mints today could learn from what private mints were doing back in the day.

  6. I recently purchased a “2014 G Britain S2PND ‘Britannia’ Lunar Horse Obverse – Mule MS69 PL” for $495 and was horrified to see massive milk spots. I returned it only to receive another with spots only not as bad. I’m torn between retuning it for a refund or keeping it due to it’s possible value increase because of it’s minting error. How is it these ‘ RESPECTED’ world mints can’t seem to eliminate this problem? Just replace the part that is causing the problem. Or am I to simple minded to think no one else thought of that.

    A simple minded fool

  7. This is total BS. They charged big premiums for the Canadian wildlife series coins. Timber Wolf, Grizzly, Couger, Antolop, Moose, Wood Bison. These were sold as collector coins with low mintage not as low premium slab coins. I have about 10 roles between them that I put in individual air tights. Over half have milk spots. I was new to coin collecting when the first of this series came out. I have alot of ASE. I like to buy the 1996 ASE but have bought other years to with no problems with milk spots. I’m very turned off with the quality of the RCM. No more RCM coins for me.

  8. I bought a 2016-W Burnished Silver Eagle SP70 30th Anniversary Edge coin and it had a small spot on it. I am very upset about it and the coin is less than 2 months old. I would not call it a milk spot on my coin, just a spot on it. I can’t understand how PCGS can grade a coin with a spot on it and give it a SP70 grade. I called Provident Metals and the girl on the phone kept bragging that it is guaranteed by PCGS. I told the girl on the phone that I been buying and selling coins for 30 years and condition of the coin is key when trying to sell a coin no matter what the grade it was given. I advised the girl that if I ever took this coin to a coin show and try to sell it, potential buyers would question its authenticity or try to haggle it for a lower price. Some people would not consider buying a high graded spotted coin. I told Provident Metals I want to exchange the coin and get a paid postage label so I can send it back. The only problem that they need a supervisors approval and none were on duty and they only have 10 guys left on a Friday. Most likely they will sell out of this coin by Monday and i will either be stuck with a damaged coin or get a refund on another coin that I don’t want. I don’t personally blame Provident Metals, I blame PCGS for this. I know Provident Metals will make things right with me, I just wish I had my coin without a nasty spot on it.

  9. I find silver bullion bars have no tendency to milk spot even the ones with a mirrored finish. So what is the difference between a manufactured silver bar & silver coin? No detergent wash? Is it a question of purity meaning less pure silver (99.9) oxidize more than 99.99 silver. I also suspect that prolonged exposure to the atmosphere (oxygen) causes the development of oxides (Ag2O).
    Vacuum sealing in mylar might perhaps help…at the least delay milk spots. Worth a try.

  10. JM doesn’t seem to have a problem, so, it’s really no surprise that govts have issues with quality control, like everything else they do. It’s negligence and indifference.

  11. Shows up on proof clad coins also, its probably coming from that blast of air they spray on the planchets before the strike. Most notable from just the way the spotting patterns first appear.


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