How do you guys handle key dates during times like these?

Azurescens

Just wondering how the pros handle key dates during times of upward price movement.

I understand premiums shrink when the price goes up.

When do they become premiums again?

I bought a ton of key date modern bullion which obviously I'm still in the red on ounce-for-ounce, just way less red.

Prices have more or less stayed the same and I'd be buying the same now as I was 12 or 18 months ago if I didn't already have a pile.

It leaves me wondering what happens next.

Spot catches up ➡️ they stagnate ➡️ eventually go back up?

They both go up in tandem?

What happened 15 years ago?

jmski52

Just wondering how the pros handle key dates during times of upward price movement.

I understand premiums shrink when the price goes up.

When do they become premiums again?

I bought a ton of key date modern bullion which obviously I'm still in the red on ounce-for-ounce, just way less red.

Prices have more or less stayed the same and I'd be buying the same now as I was 12 or 18 months ago if I didn't already have a pile.

It leaves me wondering what happens next.

I've been dealing with this issue. You can expect that "a rising tide lifts all boats" and a great melt begins. Effectively, this means that almost all premiums go away and never come back. Once the owners of a collectible gold coin realize that the new higher price is much higher than their selling target price and that a premium is no longer attached, they sell for a nice profit and the coins get sent to the smelter. Eventually, this changes the scarcity distribution for the surviving coins, but nobody really knows which ones survive.

Many years later the surviving coins get sorted out in the auction market by the collectors who might still be in the market at the much higher prices. But it means that the collector market has mostly been destroyed at that point, except for the very wealthy.

This past summer, I sold all of my gold commemorative $5 coins, even though they were some of the scarcer ones. Why? Even though they were scarcer than some of the others, they carried no premium and my prices realized were already way higher than what I had hoped for.

The same situation applies to the Gold Spouses. They may have very low mintages, but nobody collects them and there is no premium attached, in fact they are selling below melt mostly - but their gold content means that they can sell for more than double their issue price. Will they ever have a collector premium? My opinion is no - not until only 10 or so of each coin survive.

blitzdude

Key Dates? Only "key date" I know about is the 93-s Morgan and she's certainly not bullion. I'd say anything struck/minted/printed or whatever after 1950ish is just standard junk. If you can net melt today you done good. RGDS!

Jinx86

Ive been targeting "better" date not keys for numis gold in current store stock and liquidated much of it a few months ago with the anticipated run up to make sure to capitalize on the premiums over spot. Glad I did it and will continue to move these items as I see opportunities. Personally, I never collected numis gold better dates other than truly rare coins.

jmski52

"Key Date" is a somewhat nebulous term when it comes to Modern Bullion. I finally liquidated some early date (1987, 1988, 1989) fractional AGEs this year, at a nice premium. From the looks of it, they made the cut.

OTOH, my Eric Jordan-inspired purchases of 2008-W fractional AGEs are in flux, and the premiums may or may not be holding. Regardless of whether or not they maintain their premiums, their percentage gains are not in the same ballpark as straight bullion.

Further along the scale, there are many early Plats in MS70 that are absolutely killin' it. And many that are not. It's a mixed bag in APEs.

As far as Gold Buffalos go - what's not to like? Almost every one of them has outrun their premiums, but who's complaining? The bigger problem will be just keeping up with the series.

GoldFinger1969

Are we talking key dates of otherwise common bullion-type coins like ASEs ? Or classic silver or gold coins ?

Key Date to me would imply high scarcity or rarity, right ? In which case the premium to PM content (silver or gold) would be astronomical and I would think the rise in metal prices wouldn't be relevant.

As an example, I don't think the price of gold has impacted the pricing of AU-58 or MS-62 MCMVII High Relief Saints. Or any 1908-S Saints higher than MS-66.

But the price of gold certainly has impacted more common coins even in MS-65 or MS-66 condition. Gold has doubled and then some in 5 years....most of the semi-scarce coins seem to have risen only 25-50% or so...the premium has taken some of the bite.

derryb

collector bullion coins carry more premium than just regular bullion. Yes, there are modern collector bullion coins. Low mintage W mint mark business strike gold eagles is an example. Feel free to compare their price to that of regular gold eagles.

TwoSides2aCoin

This is where a fork is in the road. Key dates are almost always overpriced and even with metals rising or in a free fall, keys seem to hold their value from age to age.

dcarr

Compare two hypothetical coins:

When gold was $2.000:
Coin A is scarce and sold for $3,000.
Coin B is common and sold for $2,100.

Now with gold at $3,800:
Coin A (scarce) sells for $4,100.
Coin B (common) sells for $3,800.

Which would be the better coin to buy at this time (now) ?

I would say Coin A because if the gold price were to drop, it would insulate the buyer somewhat from the drop (because the percentage premium on it would likely go back up). And Coin A would also be a lot more interesting to own as part of a collection.

derryb

@TwoSides2aCoin said:
This is where a fork is in the road. Key dates are almost always overpriced and even with metals rising or in a free fall, keys seem to hold their value from age to age.

collectors are willing to pay more than are stackers

blitzdude

@dcarr said:
Compare two hypothetical coins:

When gold was $2.000:
Coin A is scarce and sold for $3,000.
Coin B is common and sold for $2,100.

Now with gold at $3,800:
Coin A (scarce) sells for $4,100.
Coin B (common) sells for $3,800.

Which would be the better coin to buy at this time (now) ?

I would say Coin A because if the gold price were to drop, it would insulate the buyer somewhat from the drop (because the percentage premium on it would likely go back up). And Coin A would also be a lot more interesting to own as part of a collection.

Are we talking REAL coins, Gooberment bullion of your "rare" fantasy tokens? Not trying to start something, just trying to understand what you have defined as your hypotheticals. THKS!

taxmad

@blitzdude said:
Not trying to start something, just trying to understand what you have defined as your hypotheticals. THKS!

Oh please - that is your sole purpose on these threads

dcarr

@blitzdude said:

@dcarr said:
Compare two hypothetical coins:

When gold was $2.000:
Coin A is scarce and sold for $3,000.
Coin B is common and sold for $2,100.

Now with gold at $3,800:
Coin A (scarce) sells for $4,100.
Coin B (common) sells for $3,800.

Which would be the better coin to buy at this time (now) ?

I would say Coin A because if the gold price were to drop, it would insulate the buyer somewhat from the drop (because the percentage premium on it would likely go back up). And Coin A would also be a lot more interesting to own as part of a collection.

Are we talking REAL coins, Gooberment bullion of your "rare" fantasy tokens? Not trying to start something, just trying to understand what you have defined as your hypotheticals. THKS!

.

It was a hypothetical situation.
But it could apply to a scarce-date Double Eagle.

.

jmski52

This past year, I've sold a few burnished Gold Eagles for melt, both fractional and 1 oz. coins. I was holding extras because of the low mintages, but I kept the ones with even lower mintages.

Paradoxically, in the long run it may work out such that the lowest mintage coins will have the largest population of survivors. I think this same phenomenon has happened in the past with various classic precious metal issues.

blitzdude

@dcarr said:

@blitzdude said:

@dcarr said:
Compare two hypothetical coins:

When gold was $2.000:
Coin A is scarce and sold for $3,000.
Coin B is common and sold for $2,100.

Now with gold at $3,800:
Coin A (scarce) sells for $4,100.
Coin B (common) sells for $3,800.

Which would be the better coin to buy at this time (now) ?

I would say Coin A because if the gold price were to drop, it would insulate the buyer somewhat from the drop (because the percentage premium on it would likely go back up). And Coin A would also be a lot more interesting to own as part of a collection.

Are we talking REAL coins, Gooberment bullion of your "rare" fantasy tokens? Not trying to start something, just trying to understand what you have defined as your hypotheticals. THKS!

.

It was a hypothetical situation.
But it could apply to a scarce-date Double Eagle.

.

I see the point you are trying to make but for me personally it's always the double eagle or $10 Indian at spot. RGDS!