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Premiums on $20 Saints at All Time Lows How Much Lower can they go???
segoja
Posts: 6,112 ✭✭✭✭
With the recent run up of gold, Saints have seen the lowest premiums under/over spot I've ever seen.
Example, during the Long Beach Show gold was around $1240/oz. Saints in MS65 were bid (Wholesale) at $1525. Now gold is almost $100 higher, and the bid has gone down $15.
In MS63 (these are slabbed coins) the bid is at melt.
In Jewelry grade, bid is 97.5% of melt. Contrast this to K Rands, Gold Maples and Eagles at 99% of melt.
My question is how much lower can/will premiums go. Will 64's be at melt in the near future?
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Common "saints" should sell at retail for market melt for 1 oz fine + 1%. They really have very limited collector value.
for those not aware, Saints are 90% gold. Melt for them is 90% of spot.
Keep an open mind, or get financially repressed -Zoltan Pozsar
It sucks to say this, but alot of those Saints will wind up cracked an melted.
I loaded up on AGE's over the last few months, and I'm sitting pretty right now, but I think that I should have saved some Saints from the refinery.
If I’m not mistaken a Double Eagle is 97% gold, not 90%.
I had to double check it myself before posting
Keep an open mind, or get financially repressed -Zoltan Pozsar
Saints are .9675 oz of pure gold. Total weight is slightly over 1oz. They are 90% gold, 10% copper, but the gold content is still .9675 oz pure gold.
When I say melt, I mean spot gold * .9675 or said differently melt in my calculations if the actual gold value of the coin. Should Eagles trade at a premium greater than Saints???
Ike Specialist
Finest Toned Ike I've Ever Seen, been looking since 1986
No, they probably shouldn't, but they do.
Take advantage of this anomaly.
Melt value is based on .9675 oz. - currently approximately $1,367 vs. $1,412 gold.
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
Using the $1,240/fine oz gold quote in the opening post, my estimate of a real market value was:
0.9675 x $1240 = $1,199.70 + $12.40 (1% of 1240) = $1,212.10
Some "Saints" are so "dead common" that they should sell at a discount.
Ah, yes, forgot about the added weight to the coin. original post corrected.
Keep an open mind, or get financially repressed -Zoltan Pozsar
Unlike saints, AGEs are one full oz of gold. Based strictly on gold content they should sell for more. Premiums (cost over gold content) will vary depending on either coin.
Keep an open mind, or get financially repressed -Zoltan Pozsar
In the 80's, when information between markets was not as transparent as it is now, we would call this an easy arbitrage move and dump tons of money into the soft side.
That, and cocaine. And hookers.
I don't think I'm making my point. Lets do the exact math
AGE is 91.67% Gold Balance copper and a little silver They contain 1 oz pure gold.
$20 Saints 90% Gold 10% copper and contain .9675 oz pure gold
You have to price these at the value of gold content contained, which is what is called melt value. People are confusing the spot price of gold with the melt value of the coin.
Let me illustrate Assume spot price of $1415
$50 Gold Eagle has 1 oz of pure gold. Melt Value is 1 x $1415 = $1415. Bid is 99% of melt, or $1400.85 The premium to melt is 99%
$20 Saint has .9675 oz pure gold Melt Value is .9675 x $1415 = $1369.01 Bid is 98% of melt, or $1341.65 Premium to melt is 98%
Do not get confused by the differing amounts of gold in each coin. Bottom line on a pro rata basis, $20 Saints are cheaper on a per ounce basis than Gold Eagles.
Ike Specialist
Finest Toned Ike I've Ever Seen, been looking since 1986
I'm not familiar with wholesale prices but if someone wanted to sell me graded 65's for $100 over spot I'll play for a pretty fair number. I can probably sell 64's today for $1465 so...... I can certainly handle the swap a great many times (selling 64's and buying 65's).
In general quick upward moves in gold cause premiums to shrink. Rapid declines will enable premiums to expand.
Can premiums go down further? Sure. Can't we see sell Carson City $20 gold's sell at melt?
Why are 65 Saints premiums falling? Supply is relatively easy to obtain as demand for gold products in general are falling. Ask the mint.
AGE's are 1 oz gold. Their price will rise and fall based on bullion prices. The 33 gold piece has the call feature attached for a potential premium rise that sells for almost nothing in addition to the gold content.
About 5 years ago I was paying about $25 above spot for 62Libs. Within 6 months I was bid $200 over by a major dealer.
A crisis rarely hurts the gold market.
_I can probably sell 64's today for $1465 so_
I'm not sure you could sell a significant quantity at that on a wholesale level. Not sure you could sell one for that. If so, call me and we can make some good money.
I had a client that offered 400 MS64's to a major auction house Monday. He was offered $1395. The bid was $1435. I think they lowballed him, but that was a live case.
Selling 1 or 2 coins is NOT a market.
Ike Specialist
Finest Toned Ike I've Ever Seen, been looking since 1986
A 1924 Saint is a common coin. How common? PCGS estimates about 2 million coins known, nearly half the original mintage. Almost all are uncirculated. That’s staggering when you think about it. It’s far more than many modern coin mintages.
1924 Saints are bullion. They are old and have an attractive design but they are just too common to be considered rare coins. I see no reason why they should not trade with very limited premium.
Supply & demand. If they go to the other side of melt they'll see the melting pot in a big hurry. It wouldn't be the end of the world either.
I spent quite a bit of time on the AMEX trading phillip Morriis options. A customer would walk into the crowd and ask for the market. The specialist who ran the book might quote him 3 bid offered at 3 1/2 waiting for a response. After a pause he might say I'll buy 1000 contracts at 3 1/2. The specialist would tell him you bought 20 at 3 1/2. 3 7/8 for the balance.
There is a difference between 20 and 400. I call that need. I might pay $100 over for 20 but if you need to sell 400 then I'm going make you pay. So yes if you need to sell them all at once you'll always receive a lowball bid. Especially on a market that just rose $80 in the last 5 days. It seems like $80/hr Over the past week I've been cutting wires to my commodities broker on a daily basis and all are for margin on short gold contracts.
Would be unfortunate to lose the well designed coins to the crucible.
I’d guess the “numismatic value” of these coins is about $600. In other words, if gold fell to zero, $20 Saints would still sell for $600. With gold above that, they are basically bullion.
LIBERTY SEATED DIMES WITH MAJOR VARIETIES CIRCULATION STRIKES (1837-1891) digital album
It's about liquidity. And the spread on these slabbed MS64/65 Saints will undoubtedly widen if gold really continues to move up.....back to $1650-$1950. You need a resumption of a multi-year bull market, and get people moving somewhat out of other investment markets to help propel classic generic gold coins. The biggest nemesis are overseas hoards that continue to flow into the US and get slabbed. Until those coins are slabbed they really don't "exist" in our coin market (ie not on the pop rolls). The increasing supply continues to shred the pricing.
But there's not an unlimited number of MS64 Saints out there. A million of them slabbed. At the same time about a Million Proof 1 oz gold eagles IIRC. Which is really a pittance when you realize there's 175,000 tonnes of above ground gold in the world...and only 100 tonnes of that in choice/gem $10's and $20's Libs/Indians/Saints/proof 1 oz Eagles....a ratio of 1 to 1750. MS64 Saints and 1 oz proof AGE's once reached 2X premiums to gold when gold reached $1226 in November 2009. While we will probably never see 2X again...maybe someday we will see a 25-50% premium again? Recall that Proof 1 oz gold coins can go into US IRA's. That makes them ripe for a promotion down the road....more so than the Saints and Libs. If you think of all the bullion coins out there including regular BU AGEs and Buffs, and the foreign ones too....there aren't very many Proof AGE's. Their mintages are a pittance and they go for within 5% of melt.
The numismatic gold coins have moved into much stronger hands. And I suspect we will see premiums recover quite a bit in the next 1-10 yrs. Confidence has been shattered and Saints and Libs are now detested by most of the coin community....just the opposite of 2004-2011. It takes time to recover from that kind of drubbing.
I hope many of the most abraded coins and problem coins find their way to the smelter. It would rid the market of a lot of junk.
Did Dansco (or someone else) make a double eagle album? It would be pretty cool to start filling some of those holes at bullion prices.
The drop in price and premiums on gold extends to the $10 Indians as well. 1926 in MS 64 has a price guide value of $1,150, with current gold value of $680. A number have sold on eBay for less than $1,000
He who knows he has enough is rich.
When gold hit $850 back in '80, there were large
quantities of $20 Libs (mostly) and $20 St. G's
that were melted. (coins that were XF or less)
for PCGS. A 49+-Year PNG Member...A full numismatist since 1972, retired in 2022
They are a great deal in 63-65. Not bad idea bulk up on some close to melt. Their AGW is .9675 - so bv = that x spot. I pick out nice ones around CDN bid (non CAC). These really common I will not pay premium say over $20 bc coin has sticker. Common coins force narrow spread on the bourse
There are several "Melt Value" tables. This is one:
https://www.usacoinbook.com/coin-melt-values/
I think generic Saints face a "tough crowd:" collectors with lots of funds are going to probably prefer old gold, high grade Saints, etc. Collectors with less funds can't make spot price of gold anymore. Pure investors will probably lean toward bullion for the retirement account. I suppose this leaves generic Saints a little bit cornered: merely storage for cash, with a pretty face, (if not marred by nicks and dings)...?
This is not my opinion though. I think they're beautiful, majestic - nothing wrong with a nice hunk o' gold. As a 'buyer,' I certainly don't mind the low premiums.
I just got a PCGS MS64 CAC, it wasnt jaw dropping, but nice.
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That's true. But it would not affect the price of most MS64 and higher slabbed Saints. CAC has a high standard for MS64 Saints. And even though only about 3-5% of them make JA's cut, that sticker only ads about a $25-$75 premium. In other words, getting rid of the real low end coins that should be in 62/63 holders would not have much effect. The real issue is the price of gold and/or the demand for it. Get gold hot enough and long enough, and the large supply of choice/gem common date Saints that overhang the market will start disappearing.
Wow! In a ten year span, it dropped to one-third of its previous value. Grade inflation has really killed this hobby.
A lot of the gold, not just $20's have dropped significantly over the last 10-15 years...
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A nice date set of selected MS63 coins can be absolutely beautiful.
Like this one...
https://www.pcgs.com/setregistry/gold/20-gold-major-sets/st-gaudens-20-gold-date-set-circulation-strikes-1907-1932/publishedset/112241
(without the branch mint or other rarities that Renman put in his)
I don't know why there isn't more interest in saints at this time.
Only 18 coins in the set (basically) and most of those are doable around melt.
Even if you goof up with a bad pick, you can wait awhile until gold goes up and get it back.
Assuming it doesn't stay at $1400 forever (safe bet I think)
My Saint Set
[Deleted as I made a very embarrassing mistake, sorry].
I knew things were bad, but I hadn't tracked the generic gold market closely over time. It is disturbing to say the least.
@philographer Where did you find the chart you posted? Is this feature available for all issues?
So help me understand why you think American Eagles are pure gold??? I clearly show the precise make up, and they are not pure gold.
Please back up your opinions on facts, not what you think the facts are.
Ike Specialist
Finest Toned Ike I've Ever Seen, been looking since 1986
I think the two of you might be saying the same thing, but differently. The “1 oz.” coins are not pure gold, but still contain an ounce of pure gold. I found this:
“Gold Eagles are struck with a durable composition of 22 karat gold. The composition is comprised of 91.67% gold, 3% silver, and 5.33% copper. Coins are produced so that each size contains its stated weight in pure gold.
The one ounce coin is 1.287 inches in diameter, has a weight of 1.0909 ounces, and contains on ounce of gold.”
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
I googled PCGS price history. Enter a coin denomination, year, grade. Good luck!
He who knows he has enough is rich.
the bottom line seems to be that the common date $20 Saints in grades below MS63 have no Numismatic value right now. I find that an amazing fact.
@ReadyFireAim sure put together an amazing set. It’s not too hard to imagine an uptick in interest in carefully selected MS63-64 pieces. They simply have more character that the bullion coins.
Well stated....my point precisely
Ike Specialist
Finest Toned Ike I've Ever Seen, been looking since 1986
Maybe a little, but losing 50% of the extant coins up to MS62 wouldn’t even be noticeable to the market or collectors. They're not rare. In those grades the beauty of the design is overshadowed by the ugliness of the coin.
Start melting gems and there with ya.
First they came for the circulated Saints, and I didn't speak up as I only collected gem coins with cac stickers.
Then they came for the MS62 Saints, and I didn't speak up as I only collected the MS66 ones with old green holders.
Then they came for the the regular strike Saints and I didn't speak up as I hoarded only the high relief wired edge coins.
Then they came for the Wells Fargo Saints. I didn't speak up as I decided what the hell, and switched over to Morgans.
But before I did... they came for $20 58 CC's. I didn't feel the need to speak since I only collect 62's. Then they came for 60's then 61's than finally 62's.
Then they came for my bust dollars and I realized there is very little metal value in the coins . Then the whole industry dried up and I realized it was better value to bury my coin collection than to sell it.
A memorable quote.
It's not just gradeflation. In fact, it's more the supply of them and re-submissions that have sent the pop reports into orbit. The fresh coins keep showing up from overseas, and the pops continue to rise....faster than the number of collectors or speculators who desire them. Any decent raw choice unc will eventually slabbed. Many more still to go I think.
It extends to all generic gold coins....from the $1's to the $3's to the $20's. And it's not just grade-flation as a CAC MS64 $10 Indian is still the same quality today as in 2009....yet the price has dropped from around $2500 in 2009 to around $1200-$1400 today (ie for CAC coins).
Oops, sorry - you are correct.
I think the mechanism of my embarrassing goof was that I neglected to quote the percentages from the first part of your post, thinking I could make a more concise presentation.
Then somehow I only remembered the "1 oz pure gold" phrase and forgot the other relevant facts.
Another factor was that I recalled some foreign gold bullion coins are essentially pure gold, like the Canada Maple Leaf since 1982 is .9999 .
I don't buy or sell coins as bullion, so it's outside my regular interests.
Though I do have a MS-63 Saint that I bought decades ago when gold was rather low.
I normally think a lot more carefully before posting... I hope this isn't a trend.
I agree with most of what you say, but I do think there is sticker inflation too. I have seen multiple stickered coins for sale that I do not believe would have stickered in the early days of CAC. It is all anecdotal and really no way to meaningfully test that observation with small sample sizes though. Even assuming a consistent standard, I think all of the mess in the larger market could feasibly spill over to CACed coins too. Remember there must be a logical maximum to the CAC premium so as the low end coins drag the market down, CAC coins are not totally immune. I could say more, but I don't want to turn this into a CAC thread, and I have a pact with another poster to avoid CAC threads for at least 90 days.