Is it worth the Premiums to purchase the following?
1) MS69's over MS70's
For 2007 w uncirculateds, yes, because there is some level of condition scarcity on MS70s. For the 2006 w uncirculateds I think it is less important because the mintages are so low- it should hold a key date premium regardless of grade.
2) PR69's over PR70's
Again, generally yes. The PR69s, especially for the more common dates, have virtually no premium to melt. For dates where the PR70s command a significant premium over 69s, it's really a judgment call. A nice 69 is just as collectible as a 70.
3) First strikes or Blue labels?
Under current market conditions, first strikes and blue labels do bring a premium over non-first strike/blue label coins. Assuming the grading services are doing their job correctly, there should be no difference between a coin regardless of the special label designation. In my opinion, a first strike label is less important for a 69 coin than a 70 (virtually all platinums grade at least 69, and a non-first strike label 70 might indicate a few regrade attempts).
4) With Platinum at these levels, is it stupid to start jumping in? (Is it like buying stocks at all time highs, before things tank?)
No one knows. Platinum has been steadily increasing in price. Ten years ago it was under $400 an ounce. Now it's at $1900 an ounce. My feeling is that it will continue to go up in price, given supply issues and the weakening dollar.
5) Should one gun for the Harder years first or ?? Does it really matter?
I think getting the harder years out of the way first is the best approach, because they are the most likely to appreciate over melt.
6) Do Proofs or MS coins have a better value over the other? Proofs are more widely collected and have a better base. By MS coins, I've been assuming you're talking about the w uncirculateds. I think that they offer the best bang for the buck right now, because they aren't much over melt and have the lowest mintages. I do not recommend the non-w uncirculateds as anything other than a bullion play.
Some good comments on the plats here. But IMO remember this is a recent series and paying much over what a MS/PF 69 cost is foolish IMO. Now if you get one graded you purchased from the mint that's okay but keep in mind no matter what the current count is on MS/PF 70's are most of these are still in mint boxes. If those prices start to climb too much most of us including me will be sending in our raw Plats. This isn't the Bust series that most high grades are a done deal for the most part IMO.
Edit to add:
There's absoluty nothing wrong with the 1/10 ounce coins. Yes there may be a few thousand more but there still very low mintage coins. Most of your collector base is in the 1/10 ounces and they always sell out first. I think if future collectors come into this market most will be looking at the 1/10 and 1/4 ouncers since Platinum is so high. JMO
keep in mind no matter what the current count is on MS/PF 70's are most of these are still in mint boxes.
This is not necessarliy true for the 2006-W burnished uncirculated plats, more than half of the estimated mintage of each denomination shows up in the combined PCGS/NGC population totals.
Thanks for all of the advice so far. This thread is what makes these forums so valuable. It's often hard to get into a subject with interested parties so quickly and no travel expense!
I would not shoot down or disregard the 1/10 oz coins..... With platinum at $2000 oz, we are talking about huge spreads between the different demoninations of these coins, that likely eliminates a large number of collectors.....
If you can afford a set of the large coins, go for it.....
But if platinum in 5-10 years is even more expensive then today, how many collectors will be able to afford the large coins.....
Could be a situation like the $50 Pan Am coins from back in the day.....
As far as Raw/69/70, personally I like OGP and would not pay a premium for the 69 or especially the 70 grade, but that is me..... We coins that typically all grade in this range, the pops will typically go up and not down (melting is the only way for them to go down, which is possible).....
Proof coins are more desirable then the unc bullion coins and the W unc coins are difficult to find so that could limit them for a while.....
As far as what to get first, I would get the 2004 & 2005 coins if and when you can find them..... For me finding proof platinum coins at B & M and shows is very difficult.....
Best advise: Collect what you want and like
Collection under construction: VG Barber Quarters & Halves
Good to see some new people getting interested in Platinum!
Regarding the MS69 vs MS70, there can be some very nice bargains floating around. For the past 3-4 weeks a single seller on ebay has been liquidating a TON of 2007 w-unc $50 plats (edit to add: these are PCGS MS70s). Because of this steady infusion of coins to the market, the prices have stayed low - they can be had for very little over melt! This was an opportunity that I couldn't let go by without grabbing one and I'm tempted to grab another. But, sooner or later, this supply will dry up and the prices will begin to climb.
I remember a few years ago several sellers on ebay had between 10 and 20 2001-D and 2002-D Sacs in PCGS MS68 (top pops). Each new auction began as soon as the previous auction concluded. For a period of months, these prices stayed at the $350 level. But, once the supply dried up, the prices took off. Each of these dates now commands closer to $1000 because they just can't be found.
I suspect the same thing will happen with the platinums - they will become harder and harder to find. I collect the $50 because they are the lowest mintages (but it seems that buying that new on each year hurts more and more...). I started with the proofs in 2005 (and still need the first 4 to finish my set). I have a mix of PR69s and ones that are in original govt packaging. From time to time I toy with cracking out my PR69s and putting them back in their original packaging. Last year, I started collecting the w-uncs. I have a mix of these in govt packaging, NGC MS69, and PCGS MS70. With the 2006s, I just bought whatever I could find because the mintages are so low.
Catching up on years past is certainly not a trivial effort, but trying to time it to the ups and downs of the market is a random game at best. Buy when the opportunity presents itself. Don't go crazy, and use cash to avoid running up debt as the coins approach $1000 each.
Eric
EAC member since 2011, one third of the way through my 1793 large cent type set
<< <i>I would not shoot down or disregard the 1/10 oz coins..... With platinum at $2000 oz, we are talking about huge spreads between the different demoninations of these coins, that likely eliminates a large number of collectors.....
If you can afford a set of the large coins, go for it.....
But if platinum in 5-10 years is even more expensive then today, how many collectors will be able to afford the large coins.....
Could be a situation like the $50 Pan Am coins from back in the day.....
As far as Raw/69/70, personally I like OGP and would not pay a premium for the 69 or especially the 70 grade, but that is me..... We coins that typically all grade in this range, the pops will typically go up and not down (melting is the only way for them to go down, which is possible).....
Proof coins are more desirable then the unc bullion coins and the W unc coins are difficult to find so that could limit them for a while.....
As far as what to get first, I would get the 2004 & 2005 coins if and when you can find them..... For me finding proof platinum coins at B & M and shows is very difficult.....
Best advise: Collect what you want and like >>
I agree! DO NOT underestimate the 1/10s as affordability is a darn important aspect of liquidity. But isn’t it better we keep it quiet??? Shhhhhhhhssssshhhh!!!!
<< <i>Regarding the MS69 vs MS70, there can be some very nice bargains floating around. For the past 3-4 weeks a single seller on ebay has been liquidating a TON of 2007 w-unc $50 plats. >>
I know the seller you are talking about and he is about out (I bought from him and asked him about it), especially the 69s.
Above are best fit supply and demand curve approximations for a coin series the size of a quarter. The curve thats high on the left and slopes down to the right is pure collector demand and the curve high on the right that slopes down to the left is the momentary supply curve for a coin with a 16,000 mintage. For this coin the collector supply and demand curve intersect at $200 and thus the numismatic market price is determined. The free market price of the coins metal is the horizontal dotted line. Notice that in this case the metals price does not impact the collector market to any great extent even for this "common" date.
Again in this case the price of the material has moved up but the impact of the price of the set and its individual components is not worth mentioning. Notice the material has gone up 25 percent in price but the price of the set has moved up much less on a percentage basis.
This is where material price increases begin to have a significant impact on the holding decisions of the collector. The 16,000 mintage common date is only worth $200 to the collector based on rarity but the material price is $300. The collector will buy this coin last in the set as it is put together if it is purchased at all. Notice that the rarer coins with mintages in the 5,000-10,000 range are still "reasonably" priced to the collector. They will still be bought and held.
In the short run this set is in trouble. None of the coins with mintages over about 7,000 are worth what the market price of the metal is bringing. The collectors are thinking about or are going to unload the common dates. The common dates and semi keys are "under water".
Short term disaster has come for the set. The metal is worth about twice what a collector is willing to pay based on mintage for all issues in the set except to the two lead keys and one of them is trading barely over melt. The distance between the horizontal metal value line and the demand line represents the velocity at which the collectors are induced to sell the whole set for melt or dump the common dates for melt and sell the key as a numismatic item. Problem is with so many sets common dates getting dumped few in the market need a key right now so the price of the key date is flat to down.
Notice that the melt value of the set is greater than the rarity value of the complete set in a normal market. The price of the set is at an all time high but the sets are being broken up and sold.........AND NOT TO COLLECTORS!
The distance between the collector value based on mintage clearing prices and the melt value is even worse and the sell rate of the collectors by definition must be accelerating if you believe economic theory. Also new collectors are staying off the material due to the prices that are seen as out of sight.
Things are bad now. All issues in the set are not worth melt and the key date is not needed much because the collectors are not in need of them. The new issue from the mint if there is one is likely going to have a very low mintage and that could hurt the key too. The sell off should be dramatic at this point except to the few true serious long term collectors that just flat are not going to sell their set come hell or high water and the water is high.
The question at this point is who is the buyer? Is it a buyer of gold coins as a insurance policy against inflation? More than likely its not a buyer of gold to make jewelry out of because that demand form tends to fall off under high price pressures. If the buyer is a platinum user that is very price insensitive in the short run then they will be at least a major part of the price draw. The users of platinum are the strongest buyers and I fear the common dates under this scenario will get the ax. When will the collectors stop selling the common dates? Well according to economic theory when the 16,000 issue common date has been melted down to about 6,000 coins. Thus the balance between the markets is restored.
If the price stays high enough for long enough the market for the changing reverse plats will only stabilize when enough of the common date coins have been wiped out to drive collector prices higher. The graph shows the collector driven supply and demand curves producing prices close to melt only after the 16,000 mintage coin shown has been melted down to about 6,000 coins survivors.
We all take great pride in looking at our nice mintage tables for plats and assume that reality is what it says. If the materials keep going up that chart will be a listing of the absolute max numbers of coins that exist. We could find that great modern series that have very low mintages to start with have shockingly low real mintages and certain "common" 6,000-15000 mintage coins just can't be found in the out years and no one knows why right away.
This behavior has been seen in the not to distant past. During the Hunt Brothers silver craze full sets of silver coinage were being broken up and sold for melt to refiners. The coin shops I was doing business with and subsequently worked for in college in Columbia SC were pulling the 1932 D and S quarters out of nice circulated Washington sets, 1916 D, 1921 P and D dimes out of mercury sets and nothing out of Roosevelt dime and Franklin sets. Everything but the strongest keys went to the smelter because no one was as strong a buyer as the Hunts.
Thankfully the carnage did not go on longer term or the surviving pops of the coins with high bullion (silver) content may have been materially affected. If platinum keeps going up and the strongest buyers become the industrial users of platinum then the populations could move from few struck to fewer surviving. I think it’s a question of how long will sky high material prices last and how high will it go. A short spike may not be that big a deal. Just a good opportunity to dump some “common date” material at high prices while the supply disruption lasts. A price spike thats high enough and long enough could wipe out a few thousand coins. Problem is there are only a few thousand of these coins in most cases anyway. No one came along and said in 1933 that 1927 D double eagles were going to be an impossible coin.
The question I have been asking myself is should I be holding onto common dates beyond my base set requirements? If so which ones and why? Which coins are most likely to end up with VERY VERY small surviving mintages 5 years from now and why?
I will explain all this later. I needed to get the graphic data up first before I go into what it is telling us. The original graphs looked very nice and clear but the transition onto the net made them look rough. I guess the title for this section could be called "The Likely Destruction of the Common Dates"
I have been thinking about the fundamentals lately and trying to understand what I need to be doing and why. Notice that I did not say "coin fundamentals".
I enjoy coins and have been collecting them since I was 12 but I can't justify just collecting them because I like them as if they are cheap bottle caps. Strong coins are not cheap and they eat up too much of the household budget to not perform longer term. Collecting coins IS a form of savings.
Many like to forget that for the last 3,000 plus years, coins are and have been primarily a means of unitizing precious metals. This aspect of coinage struck on silver gold or platinum has been exerting itself in the last year on a scale that we have not seen in our generation and we will see it again on and off over the next twenty years.
MACROECONOMICS:
Let me run some numbers by you guys.
1. The total trade deficits of all the nations in the world with negative trade numbers combined last year not counting the US was roughly 650 billion dollars. We ran a trade deficit of 750 billion dollars last year all by ourselves. Guys we are stacking up dollars in the hands of foreign governments faster than all the other trade deficit countries in the world combined.
2. If you check the cover letter on your Social Security statement telling you what you have been paying in and what your calculated benefits will be when you retire you may notice that the SS administration by their own calculation will be running a sustained deficit by 2017 and they will need to draw on the social security trust fund deposited with the federal government from then on. Problem is, that money has already been spent and does not exit. There is no "trust fund".
3. Our total national debt is about 9 trillion dollars and its taken over two hundred years for it to build up. The present value of the total transfer payments including social security, Medicare, medicade etc. owed the baby boomers and other retirees currently stands at between 50 and 62 trillion dollars according to the General Accounting Office. These people are a huge 78,000,000 + voting block and will show up at the poles to defend their transfer checks. The real term value of these transfer payments is open for debate but whats not open for debate is that its going to hit us hard and its going to happen in the next 10 years or so. The feds are going to be looking for funding and it does not matter which party is in charge at the time. According to David Walker the head of the US GAO we will see a doubling of personal and corporate income tax or pay out only 33 cents on the dollar of promised retirement benefits. David Walker says that "anyone who thinks we can grow our way out of this situation either does not understand economic history or isn't good at math." He also says the coming generations are likely to see a significant drop in their real net income.
4. We are going to see higher real taxation rates, higher federal borrowing, and expansion of the money supply to keep the real term value of the debts from crushing us. We are going to see a drop in real term disposable income to go along with it.
What does all this have to do with coins? Part of the answer is income tax, inflation and estate tax may create a whole new breed of "coin buyers". At the same time one of the drivers that has fueled the rare coin market for the last 100 years ....growing real disposable income of the average citizen is likely to drop off.
Lets look at some numbers so we can see why this might be the case:
lets assume the feds do not have the courage to change (increase) current tax law. lets assume that the real inflation rate (including the unpopular items like food and fuel) stays at 6.5 percent for the next 12 years. It has been 11 percent in the last 12 months.
Our example candidate named John is 55 years old with a current net worth of $1,000,000 and a income of $80,000 per year. If he dies in 2011 his daughter would receive her full inheritance. Twelve years from now when the baby boomer bill is coming due assuming John has done no better than keep up with inflation his estate will be worth $2,130,000 and his income will be $170,000 per year. John would like to give what he has to his daughter but lets look at what percentage of his income in his last few years of his working life will make it to his child. Although John is only making 80 grand in todays dollars bracket creep will drive him into the 33 percent tax bracket intended for "wealthy" people. If John makes has any kind of small windfall he ends up with just 66 cents to show for it. Then he knows that the 66 cents is going to be subject to a 55 percent estate tax for everything over 2,000,000. That 66 cents is going to be 30 cents when his daughter gets it and that assumes he pays no state income or estate taxes at all. How many of you guys want to sign up for that program? This may give John a high level of motivation to find ways to give his daughter non dollar denominated gifts that are hard to track. He does not have this motivation now but he will then.
THIS IS THE PROBLEM GOING FORWARD .......... Tax burdens are not indexed to inflation and the politicians are going to be in no position to give any relief to the tax payers. This is going to be one of the driving factors that are going to put a fire under the metals long term. The other is inflation. We just can not continue to export our currency at the rate of .75 trillion dollars a year and have the currency holdup. We just can't tax enough to pay out the 50 trillion we owe and money creation almost has to be one of the tools the Feds are going to use to prop up consumption, reduce the real value of the debts and pay its bills.
The metals may be at a short term crest and may show some weakness in the next few years but longer term the wind is at their backs.
If you read various respected commentaries on the coin market over the last 50 years the the writer will frequently note that growing disposable income is one of the key aspects of coin appreciation. Real disposable income in the US is down about 7 percent from last year and its showing up in coin prices for many series. This problem may haunt us for a while.
THE SET VS THE KEY DATE: As has been stated before the majority of series total set values are contained in the leading three key dates. Over the last 100 years if you bought just the keys and let the rest of the coins go you would have the best appreciation rate possible especially if the keys are purchased prior to series maturity in the highest grades they could be found. This is true in good times and may be true again.
I have been asked many times why bother to collect by set? The answer is multifaceted. The first reason is condition rarity. The lowest mintage coin may not be the rarest in high grade. Second is survival rate. A common date may become a dark horse key date if they are not saved. The last and maybe the most important is demand curve diversification. If disposable income improves again or capital preservation considerations issues increase collector demand the keys are in the set and will carry the day even if the metals are flat to down. If materials spike hard and drive all the keys underwater the total set value growth will carry the day. The coins metal value is the ultimate price floor and we will do well to keep this in mind.
thank you guys. glad to hear I've made a good deal.
completed 2007-w unc plats in ms70. I'll try to find the rest of 2006-w unc (beside that 1/2 ouncer) and here comes the next question: what is the "acceptable" price range for these coins:
$10 - from xxx to xxx? $25 - from xxx to xxxx (in answer for one of my previous posts eric said $900, but it was before $130 difference in platinum price) $100 - from xxxx to xxxx ?
and would someone care to explain that additional valule of labels? which label is the "strongest" and which one carries the least premium?
I think that rising bullion prices can generate important secondary consequences on prices within a bullion-related series:
1) The series as a whole becomes less affordable. Fewer new people are attracted to the series, and some existing collectors may abandon the series and sell or trade their coins. This is a classic supply / demand scenario - higher prices result in greater supply and less demand.
2) Another factor discouraging participation in a series with rising bullion prices is the risk of losing value in the event of a bullion price decline. This is especially true if most of the coins in a series are selling near melt. This risk is not present in classic coin series, or those whose value is not strongly tied to their bullion content.
3) Fewer collectors of a series results in lower premiums for key coins. This may partially explain the recent price weakness of the 2006-W burnished gold quarter-ounce and half-ounce coins, as well as the $100 one-ounce 2006-W burnished platinum and 2004-W platinum proof, both of which have actually declined in price during the last several months.
So rising bullion prices can change the whole dynamic of a series, in ways that are not always immediately apparent.
I see hoarders dumping the plat reverse proofs at $2500 melt and I hope they melt 10,000 of them. I have been getting rid of my 2006 W MS 69s $100 Plats just $200 above current melt. Though I am selling to collectors not melters. I will take the $650 in profit ($1390 originally from the mint) even if its in the worthless dollar. I can't wait 5 years to see if these will increase in value. Its been 2 years and still no great demand for these. Though I will keep the 2006 complete platimum proof and ms sets for my collection. Eric don't get me wrong, I am on your side about hoping these will be in demand someday.
i wonder if many have simply forgotten the fact that coin/bullion collecting goes in cycles and that many of us here may be bored with it in a few years. it falls out of style and all this stuff will be dumped on ebay enmasse.
then melt will truly become the factor in how much they cost.
just my two cents. it would be interesting to hear if any here think things have peaked yet.
I think that rising bullion prices can generate important secondary consequences on prices within a bullion-related series:
1) The series as a whole becomes less affordable. Fewer new people are attracted to the series, and some existing collectors may abandon the series and sell or trade their coins. This is a classic supply / demand scenario - higher prices result in greater supply and less demand.
2) Another factor discouraging participation in a series with rising bullion prices is the risk of losing value in the event of a bullion price decline. This is especially true if most of the coins in a series are selling near melt. This risk is not present in classic coin series, or those whose value is not strongly tied to their bullion content.
3) Fewer collectors of a series results in lower premiums for key coins. This may partially explain the recent price weakness of the 2006-W burnished gold quarter-ounce and half-ounce coins, as well as the $100 one-ounce 2006-W burnished platinum and 2004-W platinum proof, both of which have actually declined in price during the last several months.
So rising bullion prices can change the whole dynamic of a series, in ways that are not always immediately apparent.
These points are right on.
The only additional observation that I can bring to the table at the moment relates to #2. With regards to classic coins, if gold continues to rise significantly due to the dollar devaluation, there may come a time when this same situation begins to apply ever-more-strongly to classic gold.
Remember, we are now past the old high-water mark of $850.00/oz. What we are seeing in platinum today is exactly what we will be seeing in gold at some point.
Added: interesting charts, Eric. Color would be helpful, if possible.
Q: Are You Printing Money? Bernanke: Not Literally
Since yesterday, I have found four (4) Platinum proof 2005-W $50 listed for bidding on Ebay. These coins were hard to find only a few months ago but now they are coming out of the closet. My guess is the sellers use this opportunity to unload them.
My guess is if Platinum reaches $3000/oz, even the rare date such as 06-W Unc will be sold at melt.
I have been getting rid of my 2006 W MS 69s $100 Plats just $200 above current melt... Its been 2 years and still no great demand for these.
The 2006 ws went off sale just over 1 year ago, not 2 years.
A MS69 4 coin set currently sells for about $5,000, which is roughly twice the issue price.
The 1/4 ounce coin brings a little over 2x issue price in MS69, and the 1/10 ounce coin in MS69 slightly over 3x issue price.
It might not be as great a demand as could be expected given the low mintage numbers, and prices are lower now than they were 9 months ago, but there aren't that many coins you can buy from the Mint and double or triple your money in a year.
I don't completely understand the charts, but agree with the thought behind it.
As bullion price increases, ALL things go to melt. Hypothetically, if copper/silver/gold bullion was high enough, no coin would have a numismatic value higher than melt. If we woke up tomorrow to discover that copper/silver/gold were worth $1,000,000 an ounce, pretty much every coin would be valued at melt (even if key dates brought a premium over melt, it would be insignificant).
With platinum, the price is being driven by the non-numismatic market. The significant increase in platinum spot has is raising the water mark, and all but the keys are selling for melt. At some point (say, $10,000 an ounce), even the keys would be overrun by melt.
Of course, this is nothing new. Common date platinums (1997-2002) have been selling for little over melt for several years. However, as bullion increases, so does the chance that these coins are being destroyed and used for other purposes. The longer this happens, the greater the chance that the key dates will be eroded. The big question is how many common coins survive? Are the keys still keys?
There isn't a huge mintage difference between the proofs in 2003-2005. If 2003 and 2005 are being sold at melt (which they are) and 2004 have been saved from the melting pot because it is the key date, we could wake up in a year or two to discover that 2004 has a higher surviving population than the other platinum proofs, which can really mess with your head.
What should a collector do? Continue to hoard the coins that are now considered key, or buy "common" platinums at $2,000 an ounce hoping that a few years from now surviving population is small? Do nothing, hope that bullion value drops, and buy common date platinums then? I wish I knew.
<< <i>I don't completely understand the charts, but agree with the thought behind it.
As bullion price increases, ALL things go to melt. Hypothetically, if copper, silver, gold bullion was high enough, no coin would have a numismatic value higher than melt. If we woke up tomorrow to discover that gold, silver and copper were worth $1,000,000 an ounce, pretty much every coin would be valued at melt (even if key dates brought a premium over melt, it would be insignificant).
With platinum, the price is being driven by the non-numismatic market. The significant increase in platinum spot has is raising the water mark, and all but the keys are selling for melt. At some point (say, $10,000 an ounce), even the keys would be overrun by melt.
Common date platinums (1997-2002) have been selling for little over melt for several years. As bullion increases, so does the chance that these coins are being destroyed and used for other purposes. The longer this happens, the greater the chance that the key dates will be eroded. The big question is how many common coins survive? Are the keys still keys?
There isn't a huge mintage difference between the proofs in 2003-2005. If 2003 and 2005 are being sold at melt (which they are) and 2004 have been saved from the melting pot because it is the key date, we could wake up in a year or two to discover that 2004 has a higher surviving population than the other platinum proofs, which can really mess with your head.
What should a collector do? Continue to hoard the coins that are now considered key, or buy "common" platinums at $2,000 an ounce hoping that a few years from now surviving population is small? Do nothing, hope that bullion value drops, and buy common date platinums then? I wish I knew. >>
OUTSTANDING COMMENTS DAN,
Exactly we know a few (or don't know a few) things if this keeps up AND I THINK IT WILL:
1. The number of already low mintage type coins will be even lower. 2. The mintage list could be scrambled and we will not know how until its too late. 3. 2008 could see new proof key dates created but will they be lower than a 6,000-8,000 mintage proof whose issue got cut in half? 4. All these troubled infancy issues LONG term will make the set even more EVIL in the end.
This is a very exciting time to watch the market.
In the end I think its all about how long and how high. If its almost over dump your stuff now and pick it back up later for less. If its just starting and destruction looms hold onto what you have because there aren't going to be any later.
You could also take an altruistic approach and melt ALL of your plats so that those of us who are holding have something to look forward to!
That's true. Though I doubt anyone on this board is actually melting their coins, just selling them for melt, presumably to people who might have non-numismatic intent.
Another thought is that the actual bullion coins, (the non-w uncirculated coins), which have always been traded for melt, might really end up with the smallest surviving populations. 1997-2003 non w uncirculateds could all end up being melted. As far as I'm aware, numismatic interest in those has been virtually non-existent for years. Of course, there needs to be some level of demand that exceeds surviving population for numismatic price appreciation to occur. Put another way, if there are 300 non-w uncirculated coin collectors (I'm picking this number out of thin air), price won't go up until there aren't enough left to satisfy the demand, and pretty much the only evidence we'll have for numismatic demand exeeding supply is when common coins bring an observable premium to melt.
<< <i>What should a collector do? Continue to hoard the coins that are now considered key, or buy "common" platinums at $2,000 an ounce hoping that a few years from now surviving population is small? Do nothing, hope that bullion value drops, and buy common date platinums then? I wish I knew. >>
As spot has moved up the price for the 06-W's has not changed much. The numismastic premium for the low mintage has evaporated. What would be a decent strategy is to sell bullion common material and buy the more uncommon key dates.
All these troubled infancy issues will LONG term make the set even more evil in the end. Knowing how to play it in the short term is hard.
Well, I'm in big on the 2006 w uncirculated coins.
I'm not looking forward to a possible future where a coin with a mintage of 2500-3000 is "common" based on surviving population.
I don't think we're there yet. But if this market continues, I could imagine that being the case at some point in the not-too-distant future.
Of course, if platinum doubles again from here, I might be willing to lower the surviving population of 2006 w coins myself, just to help keep things in balance
On a more serious note, I believe the largest coins (and the sets) are the most at risk. I think fractionals are more immune to bullion than the big guys. If platinum increases to 3,000 an ounce from here, a 1/10 ounce coin goes from $200 to $300 (partially eaten by transaction costs). I don't know that the extra $100 provides enough incentive for someone to sell. But on a 1 ounce coin you're looking at a price increase from $2,000 to $3,000; on a 4 coin set, it's $3,700 to $5,550. That extra $1,000 to $1,850 is a big chunk of change, and provides a decent incentive to sell for melt.
So if I was going to predict a lower surviving population anywhere, it would be concentrated on the 1 ounce coins and the 4 coin sets. Expanding on that thought, the key date fractionals, especially the $10 coins, probably have greater immunity to melting-pot erosion than the larger coins.
On a more serious note, I believe the largest coins (and the sets) are the most at risk. I think fractionals are more immune to bullion than the big guys. If platinum increases to 3,000 an ounce from here, a 1/10 ounce coin goes from $200 to $300 (partially eaten by transaction costs). I don't know that the extra $100 provides enough incentive for someone to sell. But on a 1 ounce coin you're looking at a price increase from $2,000 to $3,000; on a 4 coin set, it's $3,700 to $5,550. That extra $1,000 to $1,850 is a big chunk of change, and provides a decent incentive to sell for melt.
So if I was going to predict a lower surviving population anywhere, it would be concentrated on the 1 ounce coins and the 4 coin sets. Expanding on that thought, the key date fractionals, especially the $10 coins, probably have greater immunity to melting-pot erosion than the larger coins. >>
What would be a decent strategy is to sell bullion common material and buy the more uncommon key dates.
That's been true up until recently. If you had a couple of 1998 proofs gathering dust, sell those and upgrade to a 2004 proof.
However, the coins that bring a premium to melt, the 2004 proof and the 2006 w uncirculated, are much more likely to be sold to a collector instead of being sold for melt. I'd guess that only a small number, if any, would end up in the melting pot, because people understand they are the keys. Meanwhile, coins like a 2001 platinum proof are at much greater risk of being melted. They are lost in the middle of the mintage range, nothing particularly compelling about them, and have been trading at melt for years. I can easily imagine that a decent percentage of those have been converted to non-numismatic use.
I think a good example is the 2005 platinum proof. ..........$100....$50....$25....$10 2004..6007...5063...5193...7161 2005..6700...5700...6400...8000
2004 proofs have enjoyed a significant premium over melt for years now, and are the recognized key to the proofs. You aren't going to find a 2004 proof for melt, even at current prices. I'd expect that a year or two from now, the surviving population of 2004 proofs will be close to 100%. 2005, on the other hand, are not nearly as desirable. Those have not brought significant premiums over melt (even while platinum was at $1500 an ounce), and now probably don't bring any premium to melt. However, there's fewer than 1,000 coins (except for the $25) separating the 2005 and 2004. If 1,000 2005 sets are sold as bullion and converted to non-numismatic use, they'd be the new key, and we wouldn't even realize it. I can easily imagine 25% or more of the 2005 platinum proofs being sold for bullion at $2,000 an ounce, which would be enough to make them significantly scarcer than the 2004.
<< <i>On a more serious note, I believe the largest coins (and the sets) are the most at risk. I think fractionals are more immune to bullion than the big guys. If platinum increases to 3,000 an ounce from here, a 1/10 ounce coin goes from $200 to $300 (partially eaten by transaction costs). I don't know that the extra $100 provides enough incentive for someone to sell. But on a 1 ounce coin you're looking at a price increase from $2,000 to $3,000; on a 4 coin set, it's $3,700 to $5,550. That extra $1,000 to $1,850 is a big chunk of change, and provides a decent incentive to sell for melt.
So if I was going to predict a lower surviving population anywhere, it would be concentrated on the 1 ounce coins and the 4 coin sets. Expanding on that thought, the key date fractionals, especially the $10 coins, probably have greater immunity to melting-pot erosion than the larger coins. >>
CORRECT IMHO
Eric >>
Maybe or Maybe not. If they aquire the 4 piece set they will melt all the coins and in most cases that's a large number of the 1/10 ounce coins too.
Maybe or Maybe not. If they aquire the 4 piece set they will melt all the coins.
I did say the $100 coins and the 4 coin sets. Absolutely true that the sets comprise the bulk of sales from the Mint for any given year, so to the extent sets are sold for bullion value (and converted to non-numismatic use), that will lower numbers across the board. But on the individual coins, $100 coins are going to be more vulnerable than the fractionals.
It goes without saying that most anything I post here, outside of mintage figures, can be responded to with "maybe or maybe not." I'm not stating my current opinion as fact, just sharing my thoughts.
You could also take an altruistic approach and melt ALL of your plats so that those of us who are holding have something to look forward to!
That's true. Though I doubt anyone on this board is actually melting their coins, just selling them for melt, presumably to people who might have non-numismatic intent.
This might bring more collectors into the fold, once they see that graded platinum coins are available and collectible.
there needs to be some level of demand that exceeds surviving population for numismatic price appreciation to occur.
This is good stuff!
So if I was going to predict a lower surviving population anywhere, it would be concentrated on the 1 ounce coins
And another reason the big guys are vulnerable - the higher the price, the more difficult they are to purchase, and/or to re-purchase.
Those have not brought significant premiums over melt (even while platinum was at $1500 an ounce), and now probably don't bring any premium to melt.
They have thinned out considerably on ebay. I'm not so sure that the 2005s are approaching melt, yet. The 4-coin set I sold to a board member a few months ago brought a premium, and there haven't been many since. And I'm not selling any more of my 2005's just to find out. I do agree with your point in general terms, though.
As Eric notes, this is a very exciting time if you have some Plats. There is really only one way to deal with this situation. Make more money and buy the mid-range ones, and buy the scarce ones, and then buy the "common" ones just for good measure. It is important to note that I didn't say sell. Actually, I might have to sell just in order to buy. Argh.
Q: Are You Printing Money? Bernanke: Not Literally
Has anyone talked to a bullion dealer recently to see how many collectible platinum eagles are coming in? I'll be seeing one in a few weeks when I sell some of my unc bullion plats.
With Platinum at $3000 an oz there will even be 06-W's going into the melting pot. If Platinum was $3K an OZ I would sell all my MS69 $100 06-W's to a smelter with a smile.
<< <i>With Platinum at $3000 an oz there will even be 06-W's going into the melting pot. If Platinum was $3K an OZ I would sell all my MS69 $100 06-W's to a smelter with a smile. >>
Me too. I have three 2006-w 69s that may well see the pot in the next 6 months. I don't collect them and have no problems with their becoming CATS. Frankly I would rather see the coins go to the smelter because it makes the ones I hold onto even rarer.
I bet there are more than a few of the 07-w holders that feel the same way about the 4000 total 4 coin sets that sold in the last 6 months.
After the "purge" is over, how are surviving numbers determined? A census? Educated guess?
That's a good question. I imagine educated guess would have to do. With classic coins, we've been able to guess at surviving population based on slab numbers. But platinums have been slabbed since 1997 - it stands to reason that some of those have been broken out and converted to non-numismatic use. Maybe we could assume that any coins graded PF or MS70 will survive the melting pot, and estimate from there.
Comments
Is it worth the Premiums to purchase the following?
1) MS69's over MS70's
For 2007 w uncirculateds, yes, because there is some level of condition scarcity on MS70s. For the 2006 w uncirculateds I think it is less important because the mintages are so low- it should hold a key date premium regardless of grade.
2) PR69's over PR70's
Again, generally yes. The PR69s, especially for the more common dates, have virtually no premium to melt. For dates where the PR70s command a significant premium over 69s, it's really a judgment call. A nice 69 is just as collectible as a 70.
3) First strikes or Blue labels?
Under current market conditions, first strikes and blue labels do bring a premium over non-first strike/blue label coins. Assuming the grading services are doing their job correctly, there should be no difference between a coin regardless of the special label designation. In my opinion, a first strike label is less important for a 69 coin than a 70 (virtually all platinums grade at least 69, and a non-first strike label 70 might indicate a few regrade attempts).
4) With Platinum at these levels, is it stupid to start jumping in?
(Is it like buying stocks at all time highs, before things tank?)
No one knows. Platinum has been steadily increasing in price. Ten years ago it was under $400 an ounce. Now it's at $1900 an ounce. My feeling is that it will continue to go up in price, given supply issues and the weakening dollar.
5) Should one gun for the Harder years first or ?? Does it really matter?
I think getting the harder years out of the way first is the best approach, because they are the most likely to appreciate over melt.
6) Do Proofs or MS coins have a better value over the other?
Proofs are more widely collected and have a better base. By MS coins, I've been assuming you're talking about the w uncirculateds. I think that they offer the best bang for the buck right now, because they aren't much over melt and have the lowest mintages. I do not recommend the non-w uncirculateds as anything other than a bullion play.
This isn't the Bust series that most high grades are a done deal for the most part IMO.
Edit to add:
There's absoluty nothing wrong with the 1/10 ounce coins. Yes there may be a few thousand more but there still very low mintage coins. Most of your collector base is in the 1/10 ounces and they always sell out first. I think if future collectors come into this market most will be looking at the 1/10 and 1/4 ouncers since Platinum is so high. JMO
keep in mind no matter what the current count is on MS/PF 70's are most of these are still in mint boxes.
This is not necessarliy true for the 2006-W burnished uncirculated plats, more than half of the estimated mintage of each denomination shows up in the combined PCGS/NGC population totals.
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Thanks for all of the advice so far.
This thread is what makes these forums so valuable.
It's often hard to get into a subject with interested parties so quickly and no travel expense!
Gardnerville, NV
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If you can afford a set of the large coins, go for it.....
But if platinum in 5-10 years is even more expensive then today, how many collectors will be able to afford the large coins.....
Could be a situation like the $50 Pan Am coins from back in the day.....
As far as Raw/69/70, personally I like OGP and would not pay a premium for the 69 or especially the 70 grade, but that is me..... We coins that typically all grade in this range, the pops will typically go up and not down (melting is the only way for them to go down, which is possible).....
Proof coins are more desirable then the unc bullion coins and the W unc coins are difficult to find so that could limit them for a while.....
As far as what to get first, I would get the 2004 & 2005 coins if and when you can find them..... For me finding proof platinum coins at B & M and shows is very difficult.....
Best advise: Collect what you want and like
Regarding the MS69 vs MS70, there can be some very nice bargains floating around. For the past 3-4 weeks a single seller on ebay has been liquidating a TON of 2007 w-unc $50 plats (edit to add: these are PCGS MS70s). Because of this steady infusion of coins to the market, the prices have stayed low - they can be had for very little over melt! This was an opportunity that I couldn't let go by without grabbing one and I'm tempted to grab another. But, sooner or later, this supply will dry up and the prices will begin to climb.
I remember a few years ago several sellers on ebay had between 10 and 20 2001-D and 2002-D Sacs in PCGS MS68 (top pops). Each new auction began as soon as the previous auction concluded. For a period of months, these prices stayed at the $350 level. But, once the supply dried up, the prices took off. Each of these dates now commands closer to $1000 because they just can't be found.
I suspect the same thing will happen with the platinums - they will become harder and harder to find. I collect the $50 because they are the lowest mintages (but it seems that buying that new on each year hurts more and more...). I started with the proofs in 2005 (and still need the first 4 to finish my set). I have a mix of PR69s and ones that are in original govt packaging. From time to time I toy with cracking out my PR69s and putting them back in their original packaging. Last year, I started collecting the w-uncs. I have a mix of these in govt packaging, NGC MS69, and PCGS MS70. With the 2006s, I just bought whatever I could find because the mintages are so low.
Catching up on years past is certainly not a trivial effort, but trying to time it to the ups and downs of the market is a random game at best. Buy when the opportunity presents itself. Don't go crazy, and use cash to avoid running up debt as the coins approach $1000 each.
Eric
<< <i>I would not shoot down or disregard the 1/10 oz coins..... With platinum at $2000 oz, we are talking about huge spreads between the different demoninations of these coins, that likely eliminates a large number of collectors.....
If you can afford a set of the large coins, go for it.....
But if platinum in 5-10 years is even more expensive then today, how many collectors will be able to afford the large coins.....
Could be a situation like the $50 Pan Am coins from back in the day.....
As far as Raw/69/70, personally I like OGP and would not pay a premium for the 69 or especially the 70 grade, but that is me..... We coins that typically all grade in this range, the pops will typically go up and not down (melting is the only way for them to go down, which is possible).....
Proof coins are more desirable then the unc bullion coins and the W unc coins are difficult to find so that could limit them for a while.....
As far as what to get first, I would get the 2004 & 2005 coins if and when you can find them..... For me finding proof platinum coins at B & M and shows is very difficult.....
Best advise: Collect what you want and like >>
I agree! DO NOT underestimate the 1/10s as affordability is a darn important aspect of liquidity. But isn’t it better we keep it quiet??? Shhhhhhhhssssshhhh!!!!
<< <i>Regarding the MS69 vs MS70, there can be some very nice bargains floating around. For the past 3-4 weeks a single seller on ebay has been liquidating a TON of 2007 w-unc $50 plats. >>
I know the seller you are talking about and he is about out (I bought from him and asked him about it), especially the 69s.
oz/half/quarter/tenth/four-coin
1,518/1,260/1,218/3,083/2,741
totals including the four-coin
4,259/4,001/3,959/5,824
Look at the quarter ounce...the only one under 4,000 (so far.) Not bad imo.
Ren
Above are best fit supply and demand curve approximations for a coin series the size of a quarter. The curve thats high on the left and slopes down to the right is pure collector demand and the curve high on the right that slopes down to the left is the momentary supply curve for a coin with a 16,000 mintage. For this coin the collector supply and demand curve intersect at $200 and thus the numismatic market price is determined. The free market price of the coins metal is the horizontal dotted line. Notice that in this case the metals price does not impact the collector market to any great extent even for this "common" date.
Again in this case the price of the material has moved up but the impact of the price of the set and its individual components is not worth mentioning. Notice the material has gone up 25 percent in price but the price of the set has moved up much less on a percentage basis.
This is where material price increases begin to have a significant impact on the holding decisions of the collector. The 16,000 mintage common date is only worth $200 to the collector based on rarity but the material price is $300. The collector will buy this coin last in the set as it is put together if it is purchased at all. Notice that the rarer coins with mintages in the 5,000-10,000 range are still "reasonably" priced to the collector. They will still be bought and held.
In the short run this set is in trouble. None of the coins with mintages over about 7,000 are worth what the market price of the metal is bringing. The collectors are thinking about or are going to unload the common dates. The common dates and semi keys are "under water".
Short term disaster has come for the set. The metal is worth about twice what a collector is willing to pay based on mintage for all issues in the set except to the two lead keys and one of them is trading barely over melt. The distance between the horizontal metal value line and the demand line represents the velocity at which the collectors are induced to sell the whole set for melt or dump the common dates for melt and sell the key as a numismatic item. Problem is with so many sets common dates getting dumped few in the market need a key right now so the price of the key date is flat to down.
Notice that the melt value of the set is greater than the rarity value of the complete set in a normal market. The price of the set is at an all time high but the sets are being broken up and sold.........AND NOT TO COLLECTORS!
The distance between the collector value based on mintage clearing prices and the melt value is even worse and the sell rate of the collectors by definition must be accelerating if you believe economic theory. Also new collectors are staying off the material due to the prices that are seen as out of sight.
Things are bad now. All issues in the set are not worth melt and the key date is not needed much because the collectors are not in need of them. The new issue from the mint if there is one is likely going to have a very low mintage and that could hurt the key too. The sell off should be dramatic at this point except to the few true serious long term collectors that just flat are not going to sell their set come hell or high water and the water is high.
The question at this point is who is the buyer? Is it a buyer of gold coins as a insurance policy against inflation? More than likely its not a buyer of gold to make jewelry out of because that demand form tends to fall off under high price pressures. If the buyer is a platinum user that is very price insensitive in the short run then they will be at least a major part of the price draw. The users of platinum are the strongest buyers and I fear the common dates under this scenario will get the ax. When will the collectors stop selling the common dates? Well according to economic theory when the 16,000 issue common date has been melted down to about 6,000 coins. Thus the balance between the markets is restored.
If the price stays high enough for long enough the market for the changing reverse plats will only stabilize when enough of the common date coins have been wiped out to drive collector prices higher. The graph shows the collector driven supply and demand curves producing prices close to melt only after the 16,000 mintage coin shown has been melted down to about 6,000 coins survivors.
We all take great pride in looking at our nice mintage tables for plats and assume that reality is what it says. If the materials keep going up that chart will be a listing of the absolute max numbers of coins that exist. We could find that great modern series that have very low mintages to start with have shockingly low real mintages and certain "common" 6,000-15000 mintage coins just can't be found in the out years and no one knows why right away.
This behavior has been seen in the not to distant past. During the Hunt Brothers silver craze full sets of silver coinage were being broken up and sold for melt to refiners. The coin shops I was doing business with and subsequently worked for in college in Columbia SC were pulling the 1932 D and S quarters out of nice circulated Washington sets, 1916 D, 1921 P and D dimes out of mercury sets and nothing out of Roosevelt dime and Franklin sets. Everything but the strongest keys went to the smelter because no one was as strong a buyer as the Hunts.
Thankfully the carnage did not go on longer term or the surviving pops of the coins with high bullion (silver) content may have been materially affected. If platinum keeps going up and the strongest buyers become the industrial users of platinum then the populations could move from few struck to fewer surviving. I think it’s a question of how long will sky high material prices last and how high will it go. A short spike may not be that big a deal. Just a good opportunity to dump some “common date” material at high prices while the supply disruption lasts. A price spike thats high enough and long enough could wipe out a few thousand coins. Problem is there are only a few thousand of these coins in most cases anyway. No one came along and said in 1933 that 1927 D double eagles were going to be an impossible coin.
The question I have been asking myself is should I be holding onto common dates beyond my base set requirements? If so which ones and why? Which coins are most likely to end up with VERY VERY small surviving mintages 5 years from now and why?
Ericj96
I enjoy coins and have been collecting them since I was 12 but I can't justify just collecting them because I like them as if they are cheap bottle caps. Strong coins are not cheap and they eat up too much of the household budget to not perform longer term. Collecting coins IS a form of savings.
Many like to forget that for the last 3,000 plus years, coins are and have been primarily a means of unitizing precious metals. This aspect of coinage struck on silver gold or platinum has been exerting itself in the last year on a scale that we have not seen in our generation and we will see it again on and off over the next twenty years.
MACROECONOMICS:
Let me run some numbers by you guys.
1. The total trade deficits of all the nations in the world with negative trade numbers combined last year not counting the US was roughly 650 billion dollars. We ran a trade deficit of 750 billion dollars last year all by ourselves. Guys we are stacking up dollars in the hands of foreign governments faster than all the other trade deficit countries in the world combined.
2. If you check the cover letter on your Social Security statement telling you what you have been paying in and what your calculated benefits will be when you retire you may notice that the SS administration by their own calculation will be running a sustained deficit by 2017 and they will need to draw on the social security trust fund deposited with the federal government from then on. Problem is, that money has already been spent and does not exit. There is no "trust fund".
3. Our total national debt is about 9 trillion dollars and its taken over two hundred years for it to build up. The present value of the total transfer payments including social security, Medicare, medicade etc. owed the baby boomers and other retirees currently stands at between 50 and 62 trillion dollars according to the General Accounting Office. These people are a huge 78,000,000 + voting block and will show up at the poles to defend their transfer checks. The real term value of these transfer payments is open for debate but whats not open for debate is that its going to hit us hard and its going to happen in the next 10 years or so. The feds are going to be looking for funding and it does not matter which party is in charge at the time. According to David Walker the head of the US GAO we will see a doubling of personal and corporate income tax or pay out only 33 cents on the dollar of promised retirement benefits. David Walker says that "anyone who thinks we can grow our way out of this situation either does not understand economic history or isn't good at math." He also says the coming generations are likely to see a significant drop in their real net income.
4. We are going to see higher real taxation rates, higher federal borrowing, and expansion of the money supply to keep the real term value of the debts from crushing us. We are going to see a drop in real term disposable income to go along with it.
What does all this have to do with coins? Part of the answer is income tax, inflation and estate tax may create a whole new breed of "coin buyers". At the same time one of the drivers that has fueled the rare coin market for the last 100 years ....growing real disposable income of the average citizen is likely to drop off.
Lets look at some numbers so we can see why this might be the case:
lets assume the feds do not have the courage to change (increase) current tax law.
lets assume that the real inflation rate (including the unpopular items like food and fuel) stays at 6.5 percent for the next 12 years. It has been 11 percent in the last 12 months.
Our example candidate named John is 55 years old with a current net worth of $1,000,000 and a income of $80,000 per year. If he dies in 2011 his daughter would receive her full inheritance. Twelve years from now when the baby boomer bill is coming due assuming John has done no better than keep up with inflation his estate will be worth $2,130,000 and his income will be $170,000 per year. John would like to give what he has to his daughter but lets look at what percentage of his income in his last few years of his working life will make it to his child. Although John is only making 80 grand in todays dollars bracket creep will drive him into the 33 percent tax bracket intended for "wealthy" people. If John makes has any kind of small windfall he ends up with just 66 cents to show for it. Then he knows that the 66 cents is going to be subject to a 55 percent estate tax for everything over 2,000,000. That 66 cents is going to be 30 cents when his daughter gets it and that assumes he pays no state income or estate taxes at all. How many of you guys want to sign up for that program? This may give John a high level of motivation to find ways to give his daughter non dollar denominated gifts that are hard to track. He does not have this motivation now but he will then.
THIS IS THE PROBLEM GOING FORWARD .......... Tax burdens are not indexed to inflation and the politicians are going to be in no position to give any relief to the tax payers. This is going to be one of the driving factors that are going to put a fire under the metals long term. The other is inflation. We just can not continue to export our currency at the rate of .75 trillion dollars a year and have the currency holdup. We just can't tax enough to pay out the 50 trillion we owe and money creation almost has to be one of the tools the Feds are going to use to prop up consumption, reduce the real value of the debts and pay its bills.
The metals may be at a short term crest and may show some weakness in the next few years but longer term the wind is at their backs.
If you read various respected commentaries on the coin market over the last 50 years the the writer will frequently note that growing disposable income is one of the key aspects of coin appreciation. Real disposable income in the US is down about 7 percent from last year and its showing up in coin prices for many series. This problem may haunt us for a while.
THE SET VS THE KEY DATE:
As has been stated before the majority of series total set values are contained in the leading three key dates. Over the last 100 years if you bought just the keys and let the rest of the coins go you would have the best appreciation rate possible especially if the keys are purchased prior to series maturity in the highest grades they could be found. This is true in good times and may be true again.
I have been asked many times why bother to collect by set? The answer is multifaceted. The first reason is condition rarity. The lowest mintage coin may not be the rarest in high grade. Second is survival rate. A common date may become a dark horse key date if they are not saved. The last and maybe the most important is demand curve diversification. If disposable income improves again or capital preservation considerations issues increase collector demand the keys are in the set and will carry the day even if the metals are flat to down. If materials spike hard and drive all the keys underwater the total set value growth will carry the day. The coins metal value is the ultimate price floor and we will do well to keep this in mind.
lets look at the series again.
SILVER EAGLES
GOLD EAGLES AND THE ULTRA HIGH RELIEF SAINT
FIRST SPOUSE GOLD
GOLD COMMEMS
SILVER COMMEMS
BUFFALO GOLD
PLATINUM EAGLES
completed 2007-w unc plats in ms70. I'll try to find the rest of 2006-w unc (beside that 1/2 ouncer) and here comes the next question:
what is the "acceptable" price range for these coins:
$10 - from xxx to xxx?
$25 - from xxx to xxxx (in answer for one of my previous posts eric said $900, but it was before $130 difference in platinum price)
$100 - from xxxx to xxxx ?
and would someone care to explain that additional valule of labels? which label is the "strongest" and which one carries the least premium?
Best,
Marcin.
Wow and I have a headache now.....
It doesn't cost any more to capture your images in color.
Now you have to explain which one is yellow, red and blue.
I think that rising bullion prices can generate important secondary consequences on prices within a bullion-related series:
1) The series as a whole becomes less affordable. Fewer new people are attracted to the series, and some existing collectors may abandon the series and sell or trade their coins. This is a classic supply / demand scenario - higher prices result in greater supply and less demand.
2) Another factor discouraging participation in a series with rising bullion prices is the risk of losing value in the event of a bullion price decline. This is especially true if most of the coins in a series are selling near melt. This risk is not present in classic coin series, or those whose value is not strongly tied to their bullion content.
3) Fewer collectors of a series results in lower premiums for key coins. This may partially explain the recent price weakness of the 2006-W burnished gold quarter-ounce and half-ounce coins, as well as the $100 one-ounce 2006-W burnished platinum and 2004-W platinum proof, both of which have actually declined in price during the last several months.
So rising bullion prices can change the whole dynamic of a series, in ways that are not always immediately apparent.
My Adolph A. Weinman signature
Box of 20
collecting goes in cycles and that many of us here may be bored
with it in a few years. it falls out of style and all this stuff will be
dumped on ebay enmasse.
then melt will truly become the factor in how much they cost.
just my two cents. it would be interesting to hear if any here
think things have peaked yet.
1) The series as a whole becomes less affordable. Fewer new people are attracted to the series, and some existing collectors may abandon the series and sell or trade their coins. This is a classic supply / demand scenario - higher prices result in greater supply and less demand.
2) Another factor discouraging participation in a series with rising bullion prices is the risk of losing value in the event of a bullion price decline. This is especially true if most of the coins in a series are selling near melt. This risk is not present in classic coin series, or those whose value is not strongly tied to their bullion content.
3) Fewer collectors of a series results in lower premiums for key coins. This may partially explain the recent price weakness of the 2006-W burnished gold quarter-ounce and half-ounce coins, as well as the $100 one-ounce 2006-W burnished platinum and 2004-W platinum proof, both of which have actually declined in price during the last several months.
So rising bullion prices can change the whole dynamic of a series, in ways that are not always immediately apparent.
These points are right on.
The only additional observation that I can bring to the table at the moment relates to #2. With regards to classic coins, if gold continues to rise significantly due to the dollar devaluation, there may come a time when this same situation begins to apply ever-more-strongly to classic gold.
Remember, we are now past the old high-water mark of $850.00/oz. What we are seeing in platinum today is exactly what we will be seeing in gold at some point.
Added: interesting charts, Eric. Color would be helpful, if possible.
I knew it would happen.
My guess is if Platinum reaches $3000/oz, even the rare date such as 06-W Unc will be sold at melt.
Thanks for the heads-up. I'll track those auctions. I bet they don't go for melt.
Added on 2-14: Rarity, I can't find them. What search criteria did you use to locate them?
I knew it would happen.
The 2006 ws went off sale just over 1 year ago, not 2 years.
A MS69 4 coin set currently sells for about $5,000, which is roughly twice the issue price.
The 1/4 ounce coin brings a little over 2x issue price in MS69, and the 1/10 ounce coin in MS69 slightly over 3x issue price.
It might not be as great a demand as could be expected given the low mintage numbers, and prices are lower now than they were 9 months ago, but there aren't that many coins you can buy from the Mint and double or triple your money in a year.
As bullion price increases, ALL things go to melt. Hypothetically, if copper/silver/gold bullion was high enough, no coin would have a numismatic value higher than melt. If we woke up tomorrow to discover that copper/silver/gold were worth $1,000,000 an ounce, pretty much every coin would be valued at melt (even if key dates brought a premium over melt, it would be insignificant).
With platinum, the price is being driven by the non-numismatic market. The significant increase in platinum spot has is raising the water mark, and all but the keys are selling for melt. At some point (say, $10,000 an ounce), even the keys would be overrun by melt.
Of course, this is nothing new. Common date platinums (1997-2002) have been selling for little over melt for several years. However, as bullion increases, so does the chance that these coins are being destroyed and used for other purposes. The longer this happens, the greater the chance that the key dates will be eroded. The big question is how many common coins survive? Are the keys still keys?
There isn't a huge mintage difference between the proofs in 2003-2005. If 2003 and 2005 are being sold at melt (which they are) and 2004 have been saved from the melting pot because it is the key date, we could wake up in a year or two to discover that 2004 has a higher surviving population than the other platinum proofs, which can really mess with your head.
What should a collector do? Continue to hoard the coins that are now considered key, or buy "common" platinums at $2,000 an ounce hoping that a few years from now surviving population is small? Do nothing, hope that bullion value drops, and buy common date platinums then? I wish I knew.
<< <i>I don't completely understand the charts, but agree with the thought behind it.
As bullion price increases, ALL things go to melt. Hypothetically, if copper, silver, gold bullion was high enough, no coin would have a numismatic value higher than melt. If we woke up tomorrow to discover that gold, silver and copper were worth $1,000,000 an ounce, pretty much every coin would be valued at melt (even if key dates brought a premium over melt, it would be insignificant).
With platinum, the price is being driven by the non-numismatic market. The significant increase in platinum spot has is raising the water mark, and all but the keys are selling for melt. At some point (say, $10,000 an ounce), even the keys would be overrun by melt.
Common date platinums (1997-2002) have been selling for little over melt for several years. As bullion increases, so does the chance that these coins are being destroyed and used for other purposes. The longer this happens, the greater the chance that the key dates will be eroded. The big question is how many common coins survive? Are the keys still keys?
There isn't a huge mintage difference between the proofs in 2003-2005. If 2003 and 2005 are being sold at melt (which they are) and 2004 have been saved from the melting pot because it is the key date, we could wake up in a year or two to discover that 2004 has a higher surviving population than the other platinum proofs, which can really mess with your head.
What should a collector do? Continue to hoard the coins that are now considered key, or buy "common" platinums at $2,000 an ounce hoping that a few years from now surviving population is small? Do nothing, hope that bullion value drops, and buy common date platinums then? I wish I knew. >>
OUTSTANDING COMMENTS DAN,
Exactly we know a few (or don't know a few) things if this keeps up AND I THINK IT WILL:
1. The number of already low mintage type coins will be even lower.
2. The mintage list could be scrambled and we will not know how until its too late.
3. 2008 could see new proof key dates created but will they be lower than a 6,000-8,000 mintage proof whose issue got cut in half?
4. All these troubled infancy issues LONG term will make the set even more EVIL in the end.
This is a very exciting time to watch the market.
In the end I think its all about how long and how high. If its almost over dump your stuff now and pick it back up later for less. If its just starting and destruction looms hold onto what you have because there aren't going to be any later.
Ericj96
That's true. Though I doubt anyone on this board is actually melting their coins, just selling them for melt, presumably to people who might have non-numismatic intent.
Another thought is that the actual bullion coins, (the non-w uncirculated coins), which have always been traded for melt, might really end up with the smallest surviving populations. 1997-2003 non w uncirculateds could all end up being melted. As far as I'm aware, numismatic interest in those has been virtually non-existent for years. Of course, there needs to be some level of demand that exceeds surviving population for numismatic price appreciation to occur. Put another way, if there are 300 non-w uncirculated coin collectors (I'm picking this number out of thin air), price won't go up until there aren't enough left to satisfy the demand, and pretty much the only evidence we'll have for numismatic demand exeeding supply is when common coins bring an observable premium to melt.
<< <i>What should a collector do? Continue to hoard the coins that are now considered key, or buy "common" platinums at $2,000 an ounce hoping that a few years from now surviving population is small? Do nothing, hope that bullion value drops, and buy common date platinums then? I wish I knew. >>
As spot has moved up the price for the 06-W's has not changed much. The numismastic premium for the low mintage has evaporated. What would be a decent strategy is to sell bullion common material and buy the more uncommon key dates.
Well, I'm in big on the 2006 w uncirculated coins.
I'm not looking forward to a possible future where a coin with a mintage of 2500-3000 is "common" based on surviving population.
I don't think we're there yet. But if this market continues, I could imagine that being the case at some point in the not-too-distant future.
Of course, if platinum doubles again from here, I might be willing to lower the surviving population of 2006 w coins myself, just to help keep things in balance
On a more serious note, I believe the largest coins (and the sets) are the most at risk. I think fractionals are more immune to bullion than the big guys. If platinum increases to 3,000 an ounce from here, a 1/10 ounce coin goes from $200 to $300 (partially eaten by transaction costs). I don't know that the extra $100 provides enough incentive for someone to sell. But on a 1 ounce coin you're looking at a price increase from $2,000 to $3,000; on a 4 coin set, it's $3,700 to $5,550. That extra $1,000 to $1,850 is a big chunk of change, and provides a decent incentive to sell for melt.
So if I was going to predict a lower surviving population anywhere, it would be concentrated on the 1 ounce coins and the 4 coin sets. Expanding on that thought, the key date fractionals, especially the $10 coins, probably have greater immunity to melting-pot erosion than the larger coins.
On a more serious note, I believe the largest coins (and the sets) are the most at risk. I think fractionals are more immune to bullion than the big guys. If platinum increases to 3,000 an ounce from here, a 1/10 ounce coin goes from $200 to $300 (partially eaten by transaction costs). I don't know that the extra $100 provides enough incentive for someone to sell. But on a 1 ounce coin you're looking at a price increase from $2,000 to $3,000; on a 4 coin set, it's $3,700 to $5,550. That extra $1,000 to $1,850 is a big chunk of change, and provides a decent incentive to sell for melt.
So if I was going to predict a lower surviving population anywhere, it would be concentrated on the 1 ounce coins and the 4 coin sets. Expanding on that thought, the key date fractionals, especially the $10 coins, probably have greater immunity to melting-pot erosion than the larger coins. >>
CORRECT IMHO
Eric
That's been true up until recently. If you had a couple of 1998 proofs gathering dust, sell those and upgrade to a 2004 proof.
However, the coins that bring a premium to melt, the 2004 proof and the 2006 w uncirculated, are much more likely to be sold to a collector instead of being sold for melt. I'd guess that only a small number, if any, would end up in the melting pot, because people understand they are the keys. Meanwhile, coins like a 2001 platinum proof are at much greater risk of being melted. They are lost in the middle of the mintage range, nothing particularly compelling about them, and have been trading at melt for years. I can easily imagine that a decent percentage of those have been converted to non-numismatic use.
I think a good example is the 2005 platinum proof.
..........$100....$50....$25....$10
2004..6007...5063...5193...7161
2005..6700...5700...6400...8000
2004 proofs have enjoyed a significant premium over melt for years now, and are the recognized key to the proofs. You aren't going to find a 2004 proof for melt, even at current prices. I'd expect that a year or two from now, the surviving population of 2004 proofs will be close to 100%. 2005, on the other hand, are not nearly as desirable. Those have not brought significant premiums over melt (even while platinum was at $1500 an ounce), and now probably don't bring any premium to melt. However, there's fewer than 1,000 coins (except for the $25) separating the 2005 and 2004. If 1,000 2005 sets are sold as bullion and converted to non-numismatic use, they'd be the new key, and we wouldn't even realize it. I can easily imagine 25% or more of the 2005 platinum proofs being sold for bullion at $2,000 an ounce, which would be enough to make them significantly scarcer than the 2004.
I may just put a little chop mark on the edge to seal their fate.
<< <i>On a more serious note, I believe the largest coins (and the sets) are the most at risk. I think fractionals are more immune to bullion than the big guys. If platinum increases to 3,000 an ounce from here, a 1/10 ounce coin goes from $200 to $300 (partially eaten by transaction costs). I don't know that the extra $100 provides enough incentive for someone to sell. But on a 1 ounce coin you're looking at a price increase from $2,000 to $3,000; on a 4 coin set, it's $3,700 to $5,550. That extra $1,000 to $1,850 is a big chunk of change, and provides a decent incentive to sell for melt.
So if I was going to predict a lower surviving population anywhere, it would be concentrated on the 1 ounce coins and the 4 coin sets. Expanding on that thought, the key date fractionals, especially the $10 coins, probably have greater immunity to melting-pot erosion than the larger coins. >>
CORRECT IMHO
Eric >>
Maybe or Maybe not. If they aquire the 4 piece set they will melt all the coins and in most cases that's a large number of the 1/10 ounce coins too.
I did say the $100 coins and the 4 coin sets. Absolutely true that the sets comprise the bulk of sales from the Mint for any given year, so to the extent sets are sold for bullion value (and converted to non-numismatic use), that will lower numbers across the board. But on the individual coins, $100 coins are going to be more vulnerable than the fractionals.
It goes without saying that most anything I post here, outside of mintage figures, can be responded to with "maybe or maybe not." I'm not stating my current opinion as fact, just sharing my thoughts.
That's true. Though I doubt anyone on this board is actually melting their coins, just selling them for melt, presumably to people who might have non-numismatic intent.
This might bring more collectors into the fold, once they see that graded platinum coins are available and collectible.
there needs to be some level of demand that exceeds surviving population for numismatic price appreciation to occur.
This is good stuff!
So if I was going to predict a lower surviving population anywhere, it would be concentrated on the 1 ounce coins
And another reason the big guys are vulnerable - the higher the price, the more difficult they are to purchase, and/or to re-purchase.
Those have not brought significant premiums over melt (even while platinum was at $1500 an ounce), and now probably don't bring any premium to melt.
They have thinned out considerably on ebay. I'm not so sure that the 2005s are approaching melt, yet. The 4-coin set I sold to a board member a few months ago brought a premium, and there haven't been many since. And I'm not selling any more of my 2005's just to find out.
As Eric notes, this is a very exciting time if you have some Plats. There is really only one way to deal with this situation. Make more money and buy the mid-range ones, and buy the scarce ones, and then buy the "common" ones just for good measure. It is important to note that I didn't say sell. Actually, I might have to sell just in order to buy. Argh.
I knew it would happen.
Now, there are over 700! HMMMMM.
I knew it would happen.
<< <i>As recently as a year or two ago, I would observe that ebay had between 200 to 300 platinum/palladium listings at any given time.
Now, there are over 700! HMMMMM.
Is there a little of DUMP & RUN going on with high Platinum prices?
Gardnerville, NV
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<< <i>With Platinum at $3000 an oz there will even be 06-W's going into the melting pot. If Platinum was $3K an OZ I would sell all my MS69 $100 06-W's to a smelter with a smile. >>
Me too. I have three 2006-w 69s that may well see the pot in the next 6 months. I don't collect them and have no problems with their becoming CATS. Frankly I would rather see the coins go to the smelter because it makes the ones I hold onto even rarer.
I bet there are more than a few of the 07-w holders that feel the same way about the 4000 total 4 coin sets that sold in the last 6 months.
Ericj
That's a good question. I imagine educated guess would have to do. With classic coins, we've been able to guess at surviving population based on slab numbers. But platinums have been slabbed since 1997 - it stands to reason that some of those have been broken out and converted to non-numismatic use. Maybe we could assume that any coins graded PF or MS70 will survive the melting pot, and estimate from there.