The September death of generic gold was premature
roadrunner
Posts: 28,303 ✭✭✭✭✭
One shouldn't get their gold coin advice from dealers who don't follow the spot gold market in context with currencies, bonds, stocks in general, and world events. Gold does not move in a vacuum....and neither do generic gold coins. "Unrealistic" premiums today can be bargain premiums a week to a month later. There is real demand today. Traders do count as real demand. They count big time in the stock, bond, and currency markets.
Gold supposedly died at the Philly show with SPOT moving up. This per one of the leading numismatic retailers. And they suggested it was only going to fall further even if pog moved up. About 2-3 weeks later gold was headed for new all time highs. I guess the gold miners died in Sept as well. Maybe the premiums "seemed" way too high and true the major market makers were flooded with too many coins. Well, welcome to the inefficiencies in the relatively tiny gold market. It's no secret that the gold markets in their many forms are tiny and therefore somewhat illiquid/inefficient at times. But in the scheme of trillions of dollars of paper silver and gold, honest generic gold is less than 1% of the value of the entire gold-related markets. And similarly all the hundreds/thousands of gold miners combined equal the market cap of Walmart. It wouldn't take much of a demand increase for all the gold-related items to just dry up.
The August to September price run ups were hardly too high as things are now 10-15% higher than the September peaks. Gold is $100 higher as well...is that unrealistic? At the end of the gold bull run the price of gold is going to be a lot more unrealistic than it is today. The prices of generic gold and producing gold mining stocks were absurdly cheap in September. And even the "sloppy" generic gold is doing quite well, probably no better or no worse percentage-wise than the CAC material. But I would agree that when/if things pull back again, I'd rather be sitting on quality CAC material. But there is just not enough CAC material to go around and to make a dent in the generic gold coin market.
A number of generic gold pieces are now up 30% just in the past 1-2 months. The past 2-3 days has seen a literal explosion in prices. It might not be a bad time to take some off the table for those who trade in this material. If a proof AGE/buffalo is worth $1900 then there's no reason why a CAC MS64 Saint isn't worth a similar amount imo. Both have pops in the range of 3/4 MILL to 1.5 MILL coins last I estimated. CAC MS63 $20 Libs now pushing a whopping $2500. And it seems now that the MS65 Saints are shadowing them. If one is willing to pay 15 cents for BU wheat cents by the roll (10X melt), a gem BU Saint that's far rarer at 2.5X melt doesn't seem so far fetched. BU silver dollars also fall into the same range of 2X melt but MS64-65's are several times higher.
If the big boyz aren't buying gold at a major show, that's probably the time everyone else should be buying if prices have just fallen. You can probably make more sitting on the stuff until prices rebound than you can flipping it. It's a lot less work too. Just my 2 cent observation. It's happened time and time again over the past few years. At the 2009 FUN show MS65 Saints were going begging in the $1600-1650 range. Had they been held 4-8 weeks longer they were up 30% or more. But do your own due diligence as how gold gets to its next unrealistic price can be through a systematic series of higher lows and highs or via some volatile large downswings and even bigger upswings. If you buy when it seems cheap and no one wants it because it might fall further, that's usually the right time.
roadrunner
Gold supposedly died at the Philly show with SPOT moving up. This per one of the leading numismatic retailers. And they suggested it was only going to fall further even if pog moved up. About 2-3 weeks later gold was headed for new all time highs. I guess the gold miners died in Sept as well. Maybe the premiums "seemed" way too high and true the major market makers were flooded with too many coins. Well, welcome to the inefficiencies in the relatively tiny gold market. It's no secret that the gold markets in their many forms are tiny and therefore somewhat illiquid/inefficient at times. But in the scheme of trillions of dollars of paper silver and gold, honest generic gold is less than 1% of the value of the entire gold-related markets. And similarly all the hundreds/thousands of gold miners combined equal the market cap of Walmart. It wouldn't take much of a demand increase for all the gold-related items to just dry up.
The August to September price run ups were hardly too high as things are now 10-15% higher than the September peaks. Gold is $100 higher as well...is that unrealistic? At the end of the gold bull run the price of gold is going to be a lot more unrealistic than it is today. The prices of generic gold and producing gold mining stocks were absurdly cheap in September. And even the "sloppy" generic gold is doing quite well, probably no better or no worse percentage-wise than the CAC material. But I would agree that when/if things pull back again, I'd rather be sitting on quality CAC material. But there is just not enough CAC material to go around and to make a dent in the generic gold coin market.
A number of generic gold pieces are now up 30% just in the past 1-2 months. The past 2-3 days has seen a literal explosion in prices. It might not be a bad time to take some off the table for those who trade in this material. If a proof AGE/buffalo is worth $1900 then there's no reason why a CAC MS64 Saint isn't worth a similar amount imo. Both have pops in the range of 3/4 MILL to 1.5 MILL coins last I estimated. CAC MS63 $20 Libs now pushing a whopping $2500. And it seems now that the MS65 Saints are shadowing them. If one is willing to pay 15 cents for BU wheat cents by the roll (10X melt), a gem BU Saint that's far rarer at 2.5X melt doesn't seem so far fetched. BU silver dollars also fall into the same range of 2X melt but MS64-65's are several times higher.
If the big boyz aren't buying gold at a major show, that's probably the time everyone else should be buying if prices have just fallen. You can probably make more sitting on the stuff until prices rebound than you can flipping it. It's a lot less work too. Just my 2 cent observation. It's happened time and time again over the past few years. At the 2009 FUN show MS65 Saints were going begging in the $1600-1650 range. Had they been held 4-8 weeks longer they were up 30% or more. But do your own due diligence as how gold gets to its next unrealistic price can be through a systematic series of higher lows and highs or via some volatile large downswings and even bigger upswings. If you buy when it seems cheap and no one wants it because it might fall further, that's usually the right time.
roadrunner
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<rant begins> I still can't get over Scotsman, who was listed as a Mint distributor for American Eagles when I went to their store a couple years ago to approach them as an interested customer for the regular Mint issues. Their attitude was hostile. Even in my followup with management, his attitude was totally indifferent to my needs.
I seldom see them offering any regular issue AGEs or APEs, but to their credit - they finally got off their duffs and started maintaining an auction market for the Proof and Burnished coins, and very occasionally, an occasional slabbed regular issue coin. They lost me as a potential customer though. <rant over>
Generic gold plays into the dealer community in ways that Modern Bullion doesn't, although there really should be minimal difference. The uncertainty over grading and re-grading, and slabbed vs. unslabbed with Generic gold imparts more variables into the valuation equation that require one to become a specialist in order to survive. Modern Bullion has fewer variables to worry about at the moment although as it matures it will require some specialization as well.
In the meantime, I've hit upon a strategy that works pretty well for me. Work, earn money, salt it away in Modern Bullion and move on. I like watching the home runs as they take off, but at this point it's more important for me to save, than generate alot of market activity. So, I watch as the prices rise and fall with alot of interest but not alot of angst. Regardless of the type, bullion takes care of itself.
I buy some Modern Bullion that is collectible, and some that is simply bullion - at various premiums depending upon my assessment of the potential for future price appreciation, of course. The stuff starts to make impressive piles after awhile.
I knew it would happen.
It didn't used to be that way but it certainly is now. Yeah, I could spend a good while bemoaning the current market for pre '33 but I'm out of it for now. I've got a fairly substantial box of 20 and a dozen other trader coins that are waiting for a nice opportunity at say a 38D $5 or and 08-s $10 or maybe an early small eagle and heck, I still love the early O mint stuff but for now, I'm not spending any collecting time on that area of interest and not likely to until something turns the tables more to my benefit or liking. Looking at all the picked over, over graded trash that is selling at good for the grade, problem free, fresh material prices out there has turned my switch to OFF. The formulas have just become too complicated, ski. Besides, all my '06 buffs have doubled as have my GAE's and the obvious is not lost on me.
Yogi Berra
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
For maximum protection I'd just recommend buying spot-free PCGS CAC. The coins are very liquid when sold over the phone. You get a nice quality coin at very little premium to what average stuff is selling for and pretty much keep from having to worry about downgrades down the road.
roadrunner