Doug Winter waxes nostalgic about the 2009 coin markets in his most recent blog...
Longacre
Posts: 16,717 ✭✭✭
I was taking a read through the latest Doug Winter blog, and posted it below for discussion. He raises a few good points. I put in bold the sections that relate to my questions/comments:
(1) Although prices for certain coins have been unceremoniously lowered in value because of the sale of one or two low-end examples, is that a problem with the price reporting, or is it a problem with the way that coins are graded by TPGs? Perhaps we should all be thankful for the CAC, which ensures that only solid-for-the-grade coins get the coveted green sticker, and we don’t have the deal with the effects of low-end-graded coins on pricing.
(2) Regarding budget collectors who purchase gold in the $1,000 - $5,000 range, does anyone know if the quality at this range is easier to come by (because the coin doctors cannot be bothered with such low value coins) or is there just more value (and less risk) in buying coins at this level?
(3) Regarding the massive quantities of Saints that are being graded, are these fresh, fresh, fresh coins, or just retreads and resubmissions? One would think we are reaching the point where there are no longer large quantities of unslabbed coins (at least generic ones) that have not passed through the hands of the slabbers.
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As the 2009 Coin Market Comes to a Close, Where Are We and Where Are We Headed?
Tags: collecting advice, generic gold, Gold bullion, Liberty Head double eagles
With the year nearly over, we are heading towards a slow few weeks in the coin business followed by what is certain to be an interesting FUN Show in January 2010. As we close the year out, I thought it would be interesting to look at a few points and ask where we are and where we’re headed.
I have been through some odd coin markets (1982-84 and 1992-1994 come to mind) but what we are currently experiencing is pretty much unique. We are seeing a market where coins that were considered unfavorable a few months ago (bullion and semi-numismatic) are now what everyone wants and “real” coins are as hard to find as at any time I can remember.
The demand for generic U.S. gold, especially double eagles, remains as strong as I have ever seen. The premiums are as high as I can remember. As I write this, gold spot is at $1,140 per ounce (after having broken the seemingly unreachable $1,200 barrier last week) and an average quality MS60 to MS62 Saint is trading for $1,600-1,700. This 40%+ premium over melt for a low-end Saint is easily the highest I can recall and I think it’s pretty remarkable considering that you had to beg people to buy the exact sort of coins a few months ago at a 10% premium.
I am beginning to see some profit taking in the generic market and I think this will continue for a short period, possibly evaporating the premiums. That said, with the current sad state of the American dollar and the worldwide demand for gold, I wouldn’t be stunned to see gold break $1,500 in the next few months and a lower quality Saint to be worth close to $2,000 (!)
What about the rare coin market? It is, in its own way, experiencing topsy-turvy conditions not dissimilar to generics. The big difference is that there is good supply in the generic market but very limited supply in the rare coin market.
As I stated above, it is hard to buy interesting coins right now. Let me explain what I mean before this comment is misconstrued. If you collect Very Fine to Extremely Fine type coins or common date Walkers or Indian quarter eagles, locating coins is probably not a big challenge. But if you collect New Orleans gold or early quarter eagles or superb gem gold dollars you are probably finding it very, very hard right now to buy much. Sure, there are a few pieces around that are either terrifically overpriced or ridiculously overgraded (or a combination of both) but I’m guessing most serious collectors haven’t had an easy time adding to their collections in the last year.
The reasons for this appear pretty simple. There was a good deal of profit taking in 2005 and 2006, which brought quite a bit of material on the market but at very high price levels. The people who then bought in at the high levels either had to sell quickly (and at a significant loss) in late 2007/early 2008 or they have just decided to hold what they have and not sell their good coins at a loss. Another thing to consider is that many of the faux-collectors of the mid-decade have come and gone and most of the buyers for coins these days are serious collectors. They like the coins they own and they just aren’t interested in selling the cream of their holdings.
When I am able to buy interesting coins, they are selling well. I have noticed an uptick in demand for virtually all collector-oriented gold issues in the $1,000-5,000 range. Bigger coins seem to be selling better than smaller coins and nothing appears to be selling better than nice $2,000-5,000 Liberty Head double eagles. Yes, I am nostalgic for the days when I was regularly selling a $25,000+ rarities but I am happy to see many new collectors coming into the market and most of them heading towards the gold aisle in the numismatic mall.
Another issue we are seeing right now in the gold coin market is a real problem with price reporting. With bullion prices rising rapidly, price reporting is naturally lagging. This is compounded by the fact that certain rare date gold prices were unceremoniously devalued after one or two low-end examples sold cheaply at auction. Until we see some accuracy in this area, it will keep down the supply of interesting coins re-entering the market.
Speaking of auctions, it is interesting to note that the upcoming pre-FUN, FUN and post-FUN sales appear to be having a harder time attracting consignments than in years past. A few years ago, specialist dealers like me could use the excuse that auction companies were offering very strong competition when we moaned that we were having a hard time buying coins from collectors. Today, even the most formidable auction firms are extending their consignment deadlines in an attempt to gather more high-powered collections and individual coins.
I’ve heard fewer complaints from collectors and dealers about third-party grading in the last few months. Part of this probably has to do with the fact that most dealers are sending in Saints, Saints and more Saints to PCGS and NGC and the services tend to grade these pretty favorably. But I also think that the creation of CAC has helped to check some of the grading issues that existed in the past and I think the services are, frankly, being more careful with what they grade.
So what’s coming in the near future? As I mentioned above, I think the 2010 FUN will be strong but I am anticipating that I will come home with fewer coins than I’d like to. The name of the game in the early part of 2010 is clearly going to be gold and I wouldn’t be surprised if there is some spillover from the generics market into some slightly more exotic areas.
(1) Although prices for certain coins have been unceremoniously lowered in value because of the sale of one or two low-end examples, is that a problem with the price reporting, or is it a problem with the way that coins are graded by TPGs? Perhaps we should all be thankful for the CAC, which ensures that only solid-for-the-grade coins get the coveted green sticker, and we don’t have the deal with the effects of low-end-graded coins on pricing.
(2) Regarding budget collectors who purchase gold in the $1,000 - $5,000 range, does anyone know if the quality at this range is easier to come by (because the coin doctors cannot be bothered with such low value coins) or is there just more value (and less risk) in buying coins at this level?
(3) Regarding the massive quantities of Saints that are being graded, are these fresh, fresh, fresh coins, or just retreads and resubmissions? One would think we are reaching the point where there are no longer large quantities of unslabbed coins (at least generic ones) that have not passed through the hands of the slabbers.
*******************
As the 2009 Coin Market Comes to a Close, Where Are We and Where Are We Headed?
Tags: collecting advice, generic gold, Gold bullion, Liberty Head double eagles
With the year nearly over, we are heading towards a slow few weeks in the coin business followed by what is certain to be an interesting FUN Show in January 2010. As we close the year out, I thought it would be interesting to look at a few points and ask where we are and where we’re headed.
I have been through some odd coin markets (1982-84 and 1992-1994 come to mind) but what we are currently experiencing is pretty much unique. We are seeing a market where coins that were considered unfavorable a few months ago (bullion and semi-numismatic) are now what everyone wants and “real” coins are as hard to find as at any time I can remember.
The demand for generic U.S. gold, especially double eagles, remains as strong as I have ever seen. The premiums are as high as I can remember. As I write this, gold spot is at $1,140 per ounce (after having broken the seemingly unreachable $1,200 barrier last week) and an average quality MS60 to MS62 Saint is trading for $1,600-1,700. This 40%+ premium over melt for a low-end Saint is easily the highest I can recall and I think it’s pretty remarkable considering that you had to beg people to buy the exact sort of coins a few months ago at a 10% premium.
I am beginning to see some profit taking in the generic market and I think this will continue for a short period, possibly evaporating the premiums. That said, with the current sad state of the American dollar and the worldwide demand for gold, I wouldn’t be stunned to see gold break $1,500 in the next few months and a lower quality Saint to be worth close to $2,000 (!)
What about the rare coin market? It is, in its own way, experiencing topsy-turvy conditions not dissimilar to generics. The big difference is that there is good supply in the generic market but very limited supply in the rare coin market.
As I stated above, it is hard to buy interesting coins right now. Let me explain what I mean before this comment is misconstrued. If you collect Very Fine to Extremely Fine type coins or common date Walkers or Indian quarter eagles, locating coins is probably not a big challenge. But if you collect New Orleans gold or early quarter eagles or superb gem gold dollars you are probably finding it very, very hard right now to buy much. Sure, there are a few pieces around that are either terrifically overpriced or ridiculously overgraded (or a combination of both) but I’m guessing most serious collectors haven’t had an easy time adding to their collections in the last year.
The reasons for this appear pretty simple. There was a good deal of profit taking in 2005 and 2006, which brought quite a bit of material on the market but at very high price levels. The people who then bought in at the high levels either had to sell quickly (and at a significant loss) in late 2007/early 2008 or they have just decided to hold what they have and not sell their good coins at a loss. Another thing to consider is that many of the faux-collectors of the mid-decade have come and gone and most of the buyers for coins these days are serious collectors. They like the coins they own and they just aren’t interested in selling the cream of their holdings.
When I am able to buy interesting coins, they are selling well. I have noticed an uptick in demand for virtually all collector-oriented gold issues in the $1,000-5,000 range. Bigger coins seem to be selling better than smaller coins and nothing appears to be selling better than nice $2,000-5,000 Liberty Head double eagles. Yes, I am nostalgic for the days when I was regularly selling a $25,000+ rarities but I am happy to see many new collectors coming into the market and most of them heading towards the gold aisle in the numismatic mall.
Another issue we are seeing right now in the gold coin market is a real problem with price reporting. With bullion prices rising rapidly, price reporting is naturally lagging. This is compounded by the fact that certain rare date gold prices were unceremoniously devalued after one or two low-end examples sold cheaply at auction. Until we see some accuracy in this area, it will keep down the supply of interesting coins re-entering the market.
Speaking of auctions, it is interesting to note that the upcoming pre-FUN, FUN and post-FUN sales appear to be having a harder time attracting consignments than in years past. A few years ago, specialist dealers like me could use the excuse that auction companies were offering very strong competition when we moaned that we were having a hard time buying coins from collectors. Today, even the most formidable auction firms are extending their consignment deadlines in an attempt to gather more high-powered collections and individual coins.
I’ve heard fewer complaints from collectors and dealers about third-party grading in the last few months. Part of this probably has to do with the fact that most dealers are sending in Saints, Saints and more Saints to PCGS and NGC and the services tend to grade these pretty favorably. But I also think that the creation of CAC has helped to check some of the grading issues that existed in the past and I think the services are, frankly, being more careful with what they grade.
So what’s coming in the near future? As I mentioned above, I think the 2010 FUN will be strong but I am anticipating that I will come home with fewer coins than I’d like to. The name of the game in the early part of 2010 is clearly going to be gold and I wouldn’t be surprised if there is some spillover from the generics market into some slightly more exotic areas.
Always took candy from strangers
Didn't wanna get me no trade
Never want to be like papa
Working for the boss every night and day
--"Happy", by the Rolling Stones (1972)
Didn't wanna get me no trade
Never want to be like papa
Working for the boss every night and day
--"Happy", by the Rolling Stones (1972)
0
Comments
to get a lot of action. what happened?
" This is compounded by the fact that certain rare date gold prices were unceremoniously devalued after one or two low-end examples sold cheaply at auction. Until we see some accuracy in this area, it will keep down the supply of interesting coins re-entering the market."
who judges the price of a rare coin based on the last selling example? one would think a collector with some common sense
looks for more then one to get an idea of its value! and honestly when
it comes to gold coins most can be found selling multiple times in
many different grades over the last decade.
only a few might be tough, a handful.
I believe the answer is yes. A great many bags of Saints have been sitting in European bank vaults for the last 75 years. With the recent rise in the value of gold, some of these bags are being brought to market. Marc Emory of Heritage is agressively buying these bags; the coins are being returned to the US and sent to the grading services. In this way, Heritage is leading the way in bringing these fresh coins to market.
1. CAC and non-CAC coin prices have fallen over the past year. But sellers can price them any way they want. Non-CAC has fallen further....in all metals.
2. Quality gold coins in the $1,000-$5,000 are deceptively hard to find, even $1's, $2-1'2's and $5's. And a CAC sticker is not necessarily an all clear signal that the coin is marketable as solid (it is if sold to CAC at their then current buy price). Good luck trying to find decent incuse Indian gold in MS. While there are lots of coins in holders I only see about 20-40% that are solid for the grade. CAC's % for $20's is an eye-opener on how few solidly graded, big gold coins there are out there, esp in Saints. Simple coins like MS63 $5's, $10's, $20's just typically don't look all that appealing. The best sources are from fussy collectors who cherried them along the way. No doubt that the nicer coins have been systematically culled out over the past few years....leaving a larger % of not as nice gold coins. They may have pushed into higher holders or just put aside for a rainy day down the road.
3. I don't know if any quantity of fresh saints can dent the supply of 1 MILLION or more pieces already graded over the past 20 years. A hoard of 1,000-10,000 pieces still pales next to that. Supposedly original bags are still coming from overseas but not at the rates that they used to. But I think resubmissions count for a lot of the increasing numbers. It's no secret that the pops of MS64-66 saints has increased dramatically compared to 61-63 saints over the past 3-5 years....and it's not because of fresh any incoming supplies.
roadrunner
<< <i>Are the massive quantities of Saints fresh?
I believe the answer is yes. A great many bags of Saints have been sitting in European bank vaults for the last 75 years. With the recent rise in the value of gold, some of these bags are being brought to market. Marc Emory of Heritage is agressively buying these bags; the coins are being returned to the US and sent to the grading services. In this way, Heritage is leading the way in bringing these fresh coins to market. >>
I think you grossly over-estimate what's sitting overseas. the numbers have been rapidy dimishing to a mere trickle for years now.
Didn't wanna get me no trade
Never want to be like papa
Working for the boss every night and day
--"Happy", by the Rolling Stones (1972)
If I did the arithmetic correctly, the combined PCGS/NGC pop on 1924 Saints increased by roughly 36,000 coins (or 8%) in the last year. That is just one common date -- which means, by extrapolation, the entire series' pop probably increased by a couple hundred thousand coins. That's a whale of an increase.
Some of this is undoubtedly due to resubmissions. For example, I know of several big submitters who will buy 100 Saints, crack and resubmit them all, banking on gradeflation to make the endeavor profitable. Nevertheless, it is hard to believe that resubmissions can be the sole reason for the huge increase. Fresh coins must contribute in some (perhaps significant) way.
<< <i>
<< <i>Are the massive quantities of Saints fresh?
I believe the answer is yes. A great many bags of Saints have been sitting in European bank vaults for the last 75 years. With the recent rise in the value of gold, some of these bags are being brought to market. Marc Emory of Heritage is agressively buying these bags; the coins are being returned to the US and sent to the grading services. In this way, Heritage is leading the way in bringing these fresh coins to market. >>
I think you grossly over-estimate what's sitting overseas. the numbers have been rapidy dimishing to a mere trickle for years now. >>
I would tend to agree with the yes answer at least as it pertains to Swiss banks.
I am a relatively new (returning) collector, and I buy Doug's product in this price range. Not having looked at lots of coins, I will say though that some of this lower end stuff looks nicer in pictures (and in person) than some of the $xx,xxx.xx coins I see for sale. It's common-date no-motto Philly half eagles and eagles with dirty crevices and green or red skins vs. low-AU Charlotte / Dalonega / New Orleans semi-keys that look like they were acid-washed or proofs rubbed with a buffing cloth.
I certainly subscribe to the less-risk model of collecting in this arena. I'd much rather own the coins I own than a couple of higher-end examples.