OK...Gold is climbing every day...so when does the gold COIN MARKET catch on?

saintguru

Good 20th Century gold...Saints, Indians....all have been soft for a year now. I am not talking about generics or common dates.

Gold was at $640 at the first of the year. Now it's at $822.

I'd like to hear some well thought out opinions.

notwilight

I'm seeing the same thing in my MS70 FS gold buffalos which sell at a similar premium to melt as generic saints. I believe at least some of it is weak hands selling into the strength and I really expect that to end soon. --Jerry

cladking

Higher priced gold coins will only increase because of gold prices
if profits from the increased value of gold dealers' and collectors'
holdings is put back into the gold coin market. Apparently this is
not happening.

mrearlygold

What's your prediction Jay?

TahoeDale

Lots of events must occur before the better dates and grades participate in the run-up over the last year.

Dealers with large inventories of the common grades will need to turn the coins to others(dealers and investors), and then they(dealers) will have larger cash positions for buying the more expensive collectable dates.

There will need to be visible sales of the good dates, with notable increases. Then the snow ball effect, with each sale going higher.

Some of the above will occur at Baltimore, then more at FUN in January. Slow down for April(tax time and paying for prior purchases)and the summer will be so hot that new global warning reports will blame the coin market for all the heat being generated.

If you need more info, get my newsletter--only $500 a week.

Edit-I think I have had too much coffee this am.

saintguru

<< <i>What's your prediction Jay? >>



Not enough responses yet. I'll give my opinion. And that's all it is, because I would have expected it already.

RYK

I personally think that rare date gold tracks with the overall coin market, not the price of bullion. I think there is potential that increased interest in gold, due to the run-up in the spot price, could drive some speculators/investors into rare gold coins, especially if there is some latent interest in the individual in rare coins, but this may take some time and would only include a small fraction of those buying gold.

In the old days (ie. pre-1986), Americans would buy generic $20 Libs and Saints to participate in the gold market. Some probably got a little more interested in the coins and transitioned to buying better dates. Nowadays, many probably participate in gold by buying Gold American Eagles and can participate in the "rare issues" by buying reverse proofs, "W" mintmark uncs, and First Strike thingies. I myself would rather shave my head with a cheese grater, but to each his own.

In short, there is probably very little correlation between the price of gold and the market for rare date gold coins at the current time.

Longacre

<< <i>Dealers with large inventories of the common grades will need to turn the coins to others(dealers and investors), and then they(dealers) will have larger cash positions for buying the more expensive collectable dates. >>




Interesting point. Do you think the sellers of generics typically plow their bullion profits into rare date coins?

Weiss

Rare coins are rare coins. The metal on which they're struck is a very small part of the equation.

The increased prices for common date coins *might* push good pieces higher, but that's a backwards way to see appreciation.

In times like this, rare coins could actually loose steam. Remember the 1980s rush to melt everydamnthing. The spread between common coins and key date coins evaporated as the metal value pushed common coins well past their key date counterparts' "values".

Same thing happens with jewelry, same thing happens with metal work, candles, silverware, etc.

dac076

The common date stuff is always more sensitive to bullion price changes than rare coins are. A '16-d merc has almost no bullion value as a % of it's total value, versus a low grade '44-p. Maybe more extreme than with Saints, but the same principal applies.

mrearlygold

Traffic is up on our websites more than 50% in the last few weeks and I terminated some of my advertising. So people are looking. Volume on "much" better Numismatics is up although that's been my gig for a long time. My bullion business is laughable and I'm almost inclined to abandon it completely.

Coxe

The weakness in common $20 and $10 gold classics did not go unnoticed. I have heard quite a bit of it has been accumulated sight-unseen for some time now by folks in the wholesale channel. I doubt they will continue getting the bargains but will start reaping the profits. The scramble for bullion invariably will lead buyers to those larger classic generics. I wouldn't be surprised on bit to start seeing plus signs all over the sheets week after week if this >$800 is well sustained. Silver widgets, sight-unseen, might also make a comeback.

tradedollarnut

The top end of the market has already gone through the roof. Frankly, I think the reason there's an apparent lack of increases is simply because there's no supply - thus no transactions.

STONE

My opinion is that I should have put more money into silver earlier this year!!!!

Frankcoins

The coin market takes a while to catch up with the commodities market. In rising market, you can often pick up nice numismatic items at a small historical premium over melt. Flip side, in a declining market, numismatic gold takes longer to decline than the underlying metal. If you are bullish on gold (and I don't see much future of the dollar rising anytime soon) slabbed $5, $10 and $20 coins MS61 to MS64 are a good deal right now, in my opinion.

Broadstruck

Good 20th Century gold...Saints, Indians....all have been soft for a year now. I am not talking about generics or common dates.

Prices drooped hard at/after the Denver ANA show, however better date and PQ common Saints and Indians have continued to sell well above even the PCGS pricing page.

Coxe

Perhaps consider this bluesheet article from a month ago.

jmski52

It's what Weiss said, "Rare coins are rare coins. The metal on which they're struck is a very small part of the equation.

The increased prices for common date coins *might* push good pieces higher, but that's a backwards way to see appreciation.

In times like this, rare coins could actually loose steam. Remember the 1980s rush to melt everydamnthing. The spread between common coins and key date coins evaporated as the metal value pushed common coins well past their key date counterparts' "values"."

Also, what RYK said:

Nowadays, many probably participate in gold by buying Gold American Eagles and can participate in the "rare issues" by buying reverse proofs, "W" mintmark uncs, and First Strike thingies. I myself would rather shave my head with a cheese grater, but to each his own

RYK, step away from that cheese grater!

MrEureka

The link between bullion and rare coins is not as strong as you think it should be. It's not like 1979-80 when inflation fears were sending gold higher. Back then, hard assets were the most obvious form of self-protection. Today, inflation is not the big problem. The big fear is that the US economy is faltering at the worst possible time, with the Feds financially (and militarily) overextended. Today, the most obvious forms of self-protection are reducing one's debts and international diversification.

BECOKA

As long as the pricing of the coins is greater than the metal value there is no reason for them to follow the bullion market. It could be that the coins were ahead of their time in collector value and the bullion market is just catching up.

With the availability of nice new shiny coins there is less need to invest in older coins.

Frankcoins

<< <i>

<< <i>Dealers with large inventories of the common grades will need to turn the coins to others(dealers and investors), and then they(dealers) will have larger cash positions for buying the more expensive collectable dates. >>




Interesting point. Do you think the sellers of generics typically plow their bullion profits into rare date coins? >>



I certainly don't...that's a good way to unbalance your inventory. Lots of dealer's better stuff is on consignment, "memo" or swap deals, especially when prices are volatile.

notwilight

<< <i>As long as the pricing of the coins is greater than the metal value there is no reason for them to follow the bullion market. >>



So you're saying that the numismatic value is an absolute value rather than a premium to melt. I agree fully for rarities but for the subject coins I don't think I agree. --Jerry

saintguru

I read many valid points here. It's not like I don't analyze this all the time. I'm well aware that rare coins don't "follow" bullion and that's a double edged sword that I like. A POP 2 Saint will neither directly go up with a rise or go down with a fall in bullion prices.

What I do see is one very basic...SO basic...factor that is lacking in modern gold, and it's so simple that it's overlooked. There are very few if anyone, starting sets of these right now. If there were just THREE people building good collections it would be much different! There was a time for about 3 years where you had myself, Kutasi and three or four others jumping all over anything good that came along...and it was one of the reasons that the prices did advance to pretty fair levels. Great coins wouldn't last on someone's inventory for an hour, and auction coins were hotly contested.

I think that the rarities will go higher, and probably within a few months we'll start to see this. I do believe that there is a lag-effect with a move like we are seeing here in the metals. I also think there will be some new players...I know of a few in the wings. And as for the great dates in high grades....I believe that they'll appreciate 50-100% in the next 5 years.

Good commentary. Dale...try decaf, will ya?

mrearlygold

<< <i>The link between bullion and rare coins is not as strong as you think it should be. It's not like 1979-80 when inflation fears were sending gold higher. Back then, hard assets were the most obvious form of self-protection. Today, inflation is not the big problem. The big fear is that the US economy is faltering at the worst possible time, with the Feds financially (and militarily) overextended. Today, the most obvious forms of self-protection are reducing one's debts and international diversification. >>



The pentagon just announced they want 460 Billion for 2008 and that does NOT include $$$ for all the wars .

homerunhall

Coins usually lag bullion. But coins are hot. The price guides lag too. But wait until the next auction or coin show. That's where the pricing pressure will be felt immediately.

hrh

saintguru

<< <i>Coins usually lag bullion. But coins are hot. The price guides lad too. But wait until the next auction or coin show. That's where the pricing pressure will be felt immediately.

hrh >>



Pricing pressure UP, right Homerunner?

What's a "lad too"?

MrEureka

Today, the most obvious forms of self-protection are reducing one's debts and international diversification.

Although some may consider replying to one's own post to be gauche, I'll add what I consider to be obvious. Investing in gold bullion is a form of international diversification. Investing in classic US coins is not.

Does that mean that I advise against buying classic US coins? No. I like all coins, including American ones. I just don't think that buying US coins is a logical defensive play.

tradedollarnut

Some US coins are attractive to international buyers [such as proof gold to the Japanese]. Thus they could be considered to be an indirect international diversification.

MrEureka

Some US coins are attractive to international buyers [such as proof gold to the Japanese]. Thus they could be considered to be an indirect international diversification.

I certainly don't know what Japanese coin investors are thinking. I have no Japanese clients. However, it seems to me that international diversification should not be a major concern to the Japanese. The yen is undervalued due to the carry trade and is due for a major comeback. The dollar seems overvalued due to pervasive bloat in every imaginable sense. Does proof US gold make sense to some Japanese? I guess maybe to some of them, but not many.

BECOKA

<< <i> Some US coins are attractive to international buyers [such as proof gold to the Japanese]. Thus they could be considered to be an indirect international diversification.

I certainly don't know what Japanese coin investors are thinking. I have no Japanese clients. However, it seems to me that international diversification should not be a major concern to the Japanese. The yen is undervalued due to the carry forward trade and is due for a major comeback. The dollar seems overvalued due to pervasive bloat in every imaginable sense. Does proof US gold make sense to some Japanese? I guess maybe to some of them, but not many. >>



At some point isnt gold just gold? Does it matter if it was made in the U.S.?

tradedollarnut

Additionally, buying the type of coins that appeal to those who tend to be internationally diversified themselves [ie: classic rarities?] can be considered to be an indirect international diversification.

MrEureka

At some point isnt gold just gold? Does it matter if it was made in the U.S.?

It matters if it's not "modern crap".

MrEureka

Additionally, buying the type of coins that appeal to those who tend to be internationally diversified themselves [ie: classic rarities?] can be considered to be an indirect international diversification.

TDN - I think you're missing the point. The people that think they desperately need "international diversification" are the people that think they have too much exposure to the US economy. To these people, classic US rarities wouldn't seem like a very smart hedge.

BTW, one of our board members just converted a pile of darkside coins into a classic US rarity. I consider that to be a logical (and quite rare) contrarian play. But I'm not ready to call it "smart".

tradedollarnut

Andy: I see perfectly well what's going on and have considered that perhaps I am too heavily invested in the US economy with my business and coin collections. However, I know that the most likely buyer for my sets is internationally diversified himself so I consider my coin collection to indirectly serve that function for me.

It gives me a bit of comfort and reduces my urge to buy gold and a bunker in the boonies.

mrearlygold

<< <i>Some US coins are attractive to international buyers [such as proof gold to the Japanese]. Thus they could be considered to be an indirect international diversification. >>



I have Chinese customers, some of whom like proof type coins, others like classic gold coins, some like morgan dollars and believe it or not some of them like Chinese coins

The whole worlds gone coin collectin ! ( same tune as the whole world's gone country )

bidask

<< <i>Additionally, buying the type of coins that appeal to those who tend to be internationally diversified themselves [ie: classic rarities?] can be considered to be an indirect international diversification. >>

How about buying international gold? I have been.

roadrunner

Good 20th Century gold...Saints, Indians....all have been soft for a year now. I am not talking about generics or common dates.

Gold was at $640 at the first of the year. Now it's at $822.

The people stocking up out there right now are not looking for rare or better dates...they prefer a hunk of gold with some numismatic value. The $20 Libs in MS64 have gone from $1250 to $1650 now in a short period. I can only conclude that Mike Fuljenz or some similar bullion company is promoting them. Next to these, most denominations have shown fairly slow moves. But in just the last 2 weeks life has been injected into Libs $1's, $2-1/2's, $5's, $10's where little life was present. Even MS65 saints have started to stir by finally jumping from $1300 to $1400 in the last few weeks. But one major gold setback of say $50-$100 can send those right back to $1250.

I would agree with Coxe who felt that given some time staying at these levels, these coins will catch up. They lead the way like gangbusters in the spring of 2006 and then just collapsed over then next few months. I would expect the Saints and Indians that Saintguru speak's of to come to the party after generic gold is flying.
Hey, I just plunked down $2000 for a 1913 $10 Indian in MS63. I wished it were a 1926/1932 but it was too nice to pass up. It will have it's day very soon too...I hope.

Most of the gold market has been soft for the previous 18 months.
Just a long, drawn out base being built that was nudged recently by the Banks credit liquidity crunch. I do believe some of the bigger gold players have been hoarding various denominations in order to play this game again. And the time is coming to profit from that.
Frankly, I don't think there will be enough generic $1's to $10's to go around and those will see some nice price increases. And we know any number of those are already under manipulation. I recommended $2-1/2 Libs in 64 as a best buy at $950-$975 only 2 months ago.

I also feel that we might see serious price compression on generic gold at some point in time. The MS64 to MS65 price ratio has increased from 60% to 77% from May 2006 to the present. That's a 25% spread in value. Whose to say if it will revert back. We could see MS65 Saints bringing a 10% premium to bullion down the road.
No one knows how that will play out. Until generics really move out, I don't expect much change in the rarer gold coins.

roadrunner

bidask

<< <i>The link between bullion and rare coins is not as strong as you think it should be. It's not like 1979-80 when inflation fears were sending gold higher. Back then, hard assets were the most obvious form of self-protection. Today, inflation is not the big problem. The big fear is that the US economy is faltering at the worst possible time, with the Feds financially (and militarily) overextended. Today, the most obvious forms of self-protection are reducing one's debts and international diversification. >>

I agree with you.

roadrunner

Opened my mouth too soon. Saints in 65 went up another 2-1/2% just from am to pm today. Now getting ready to push to $1500 if gold continues any higher. Things are shaping up. Saints and $20 Libs are on fire.....just like a barbarous relic should.

roadrunner

jimmymac

<< <i>Good 20th Century gold...Saints, Indians....all have been soft for a year now. I am not talking about generics or common dates.

Gold was at $640 at the first of the year. Now it's at $822.

I'd like to hear some well thought out opinions. >>




come again?? just hit $830 - Asia will be waking up in a few hours - this is the buying season for Gold in India and dont forget China's hunger for the yellow stuff - $850 is just around the corner, IMO

Coxe

Yep >$830 Au and Ag at $15.75.

jimmymac

<< <i>

<< <i>The link between bullion and rare coins is not as strong as you think it should be. It's not like 1979-80 when inflation fears were sending gold higher. Back then, hard assets were the most obvious form of self-protection. Today, inflation is not the big problem. The big fear is that the US economy is faltering at the worst possible time, with the Feds financially (and militarily) overextended. Today, the most obvious forms of self-protection are reducing one's debts and international diversification. >>

I agree with you. >>




I beg to differ with the both of you - inflation is here to stay for the interim - when was the last time you bought bread or milk or gas? - inflation will continue to be a problem caused by the very things you mentioned, plus a few other negative financial influences on our economy.

northcoin

<< <i>

<< <i>

<< <i>The link between bullion and rare coins is not as strong as you think it should be. It's not like 1979-80 when inflation fears were sending gold higher. Back then, hard assets were the most obvious form of self-protection. Today, inflation is not the big problem. The big fear is that the US economy is faltering at the worst possible time, with the Feds financially (and militarily) overextended. Today, the most obvious forms of self-protection are reducing one's debts and international diversification. >>

I agree with you. >>




I beg to differ with the both of you - inflation is here to stay for the interim - when was the last time you bought bread or milk or gas? - inflation will continue to be a problem caused by the very things you mentioned, plus a few other negative financial influences on our economy. >>



I believe you are on the wrong thread. The subject here is not what will happen to bullion prices, but rather trying to make some sense out of the fact that slabbed better date gold no longer seems to be bringing the premium that was promised to many of us as purchasers who bought into the Mantra that you should buy the best grade you could afford. The reality is that we can double our money on the bullion gold coins we bought several years ago, but we are only seeing at best a 20% increase for the better date gold coins we bought at what are now their bullion valued prices.

roadrunner

Other than MS64 saints, the other Saint grades have all basically underperformed bullion. MS65's and 66's have been the worst.
It's no surprise that rarer dates are sitting back still. While I don't like it...all I can do is watch.

roadrunner

Joflax

I dumped all my coins off my watchlist at Heritage . In this environment the choice between rare coins and bullion is a no brainer(for me at least)
It will be interesting to see how many reserves are not met in Dallas.
It would also be interesting if Heritage would divulge whether the coins are being bought with Euros, Canadian dollars, Renimbi etc.
836 and climbing, silver up over a dollar in the past 24 hours

Snapdragon

Which would you rather buy in a rising gold market as an investment? A rare peice of antique gold which costs 10 or 20 times more than its bullion value and requires a buyer with a cultivated taste in numismatics to be resold for a profit?.....or.....a slab of metal that can be sold to an enormous amount of dealers with virtually no spread between the bid and ask price? Liquidity is the issue.

For the moment, the more attractive investment is the slab of metal. When the metal price begins to cool, the metal buyers will look to diversify their gold holdings into assets that hold their value better and have more opportunity for price appreciation. Like expensive Saints!

I think homerunhall said that the coin market will lag the bullion market. I agree. I prefer diversified investing so I'm not too dissappointed when one part of the portfolio underperforms. So I own bullion, bullion ETF's, bullion stocks, and modern pcgs PR & MS 70 GAE's and Commems. I haven't even started buying the old stuff yet. And I hope to be a Saint buyer eventually...if I make enough money on the metal

Snapdragon

roadrunner

.... that slabbed better date gold no longer seems to be bringing the premium that was promised to many of us as purchasers who bought into the Mantra that you should buy the best grade you could afford. The reality is that we can double our money on the bullion gold coins we bought several years ago, but we are only seeing at best a 20% increase for the better date gold coins we bought at what are now their bullion valued prices.

What went around once before is not guaranteed to happen again.
New paradigms when you least expect it. Some of the best performers in this several year old market are type coins in low circ grades, wheat cents, 1909 vdb circs, ......not exactly your major rarities. Top grade saints were in the limelight 1-2 years back.
They may not see that interest again....or maybe they will. Gem type coins have lagged this market as well. They were always the bluest of blue chips. This is a world wide gold boom with a growing Asia as part of it. The rules we saw in 1980 may not be duplicated.
There may not even be a final blowout once a peak is reached. Possibly only a settling back to a new higher price for gold to help support whatever currencies come out of this cycle on top.

roadrunner

saintguru

<< <i>

<< <i>

<< <i>

<< <i>The link between bullion and rare coins is not as strong as you think it should be. It's not like 1979-80 when inflation fears were sending gold higher. Back then, hard assets were the most obvious form of self-protection. Today, inflation is not the big problem. The big fear is that the US economy is faltering at the worst possible time, with the Feds financially (and militarily) overextended. Today, the most obvious forms of self-protection are reducing one's debts and international diversification. >>

I agree with you. >>




I beg to differ with the both of you - inflation is here to stay for the interim - when was the last time you bought bread or milk or gas? - inflation will continue to be a problem caused by the very things you mentioned, plus a few other negative financial influences on our economy. >>



I believe you are on the wrong thread. The subject here is not what will happen to bullion prices, but rather trying to make some sense out of the fact that slabbed better date gold no longer seems to be bringing the premium that was promised to many of us as purchasers who bought into the Mantra that you should buy the best grade you could afford. The reality is that we can double our money on the bullion gold coins we bought several years ago, but we are only seeing at best a 20% increase for the better date gold coins we bought at what are now their bullion valued prices. >>




Hold that mantra, ZenNot. Who "promised" what? I sure missed the 'warranty' when I stuck my neck out every time I paid up for a good coin. Had anyone started buying the good dates in high grades from 2002 on, you would have more than doubled your money on all of them! I bought a 1929 MS65 for $41K in 2004. It's worth a solid $100K today, and I actually sold it for $120K in 2006. Having seller's remorse, I bought a better one, the then unidentified Texas Bank/Browning MS65 for 110K.(now pedigreed as such) Now I have a world class pedigree and I tripled my money in the process. Any 1924-D/S, 25 D/S, 26-D MS65, 27-D/S and ALL of the "FAB FIVE" in MS65 have done easily as well. Even the ubiquitous High Relief doubled in value in that period. Let's get to present. I bought 4 big coins this year....1920-S MS64, 26-D MS65, 25-S MS65, 27-S MS66. I would say with confidence that all of these will appreciate 50-100% sometime over the next 5 years. This is where the real action will be, IMO. When it happens...I don;t know, but I know it will.

The same is true of the top-pop Indian gold. We've been in a pause period, but just wait until new bodies start showing up with $$.



<< <i>I think homerunhall said that the coin market will lag the bullion market >>



What he meant by that is the bullion moves up first, then the dated stuff follows, and if I may add, with a fury. I've seen it happen, and they can jump 20-30% from one sale to the next. How many POP 2 1925-S' are there? What's it gonna take to pry one from one of US two owners?

roadrunner

I would say with confidence that all of these will appreciate 50-100% sometime over the next 5 years. This is where the real action will be, IMO. When it happens...I don;t know, but I know it will.

I hope you do better than that Saintguru for I'm very confident silver will at least be +100% from here in 5 yrs (and likely +200% or more).
Gold should do +50% to +100% as well. Like you I'd rather own the rare saints in gem too. But if I knew today that bullion would outpace rare "anything" over 5 yrs. then I'd be in the bullion in a heart beat.

roadrunner

percyb

<< <i>Good 20th Century gold...Saints, Indians....all have been soft for a year now. I am not talking about generics or common dates.

Gold was at $640 at the first of the year. Now it's at $822.

I'd like to hear some well thought out opinions. >>



Could be the coin market is suggesting bullion prices won't hold. At some point there's an arb between the two.

percyb

<< <i> Some US coins are attractive to international buyers [such as proof gold to the Japanese]. Thus they could be considered to be an indirect international diversification.

I certainly don't know what Japanese coin investors are thinking. I have no Japanese clients. However, it seems to me that international diversification should not be a major concern to the Japanese. The yen is undervalued due to the carry trade and is due for a major comeback. The dollar seems overvalued due to pervasive bloat in every imaginable sense. Does proof US gold make sense to some Japanese? I guess maybe to some of them, but not many. >>



But it's gold nevertheless, and it has no boundaries.