NumisMedia Market Report: Buyers Charting the Next Big Trend

Posted on 5/10/2011

Just a short month ago, Morgan Dollars had an FMV of $215 in MS 65 and $356 in MS 66. Today they are $263 and $488, respectively.

That is an increase of 23% and 37% in less than a month. Morgan and Peace Dollars are outperforming the rest of the market including US Gold. Not only are these increases phenomenal, most dealers feel this run will continue because there is a shortage of coins in the current market. Granted, we see hundreds of Dollar bags trading every week in circulated condition, however, MS 63 and higher grades are just not available in the quantities needed to fill existing demand. Nearly every time we see miscellaneous Dollar lots offered on the Teletype systems, aggressive dealers jump in even if the asking prices seem a little too high. They know if they don’t buy them quickly, someone else will.

Silver Dollars may be charging forward, but US Gold is not far behind. Over the past two years Gold has fueled the coin market and kept it operating and healthy while the rest of the economy has been faltering. With bullion advancing almost on a weekly basis, common US Gold is on every buyer’s list. And it is not just the common US Gold that is in demand. Rare dates are also in high demand for the advanced collector. While most of the US Gold series contain various true rarities, the $20 Liberty series has many rarities, and they are attracting a wide variety of buyers at this time. The following chart shows various dates and grades of some very popular rare $20 Gold coins that have shown great progress over the last several years.

Denomination/Grade FMV April 2003 FMV May 2011
1853 O $20 Gold MS 62 $39,070 $53,330
1854 O $20 Gold AU 58 $119,670 $650,000
1856 O $20 Gold AU 58 N/A $587,500
1859 O $20 Gold MS 60 $100,750 $136,500
1870 CC $20 Gold AU 55 N/A $572,000
1871 CC $20 Gold MS 63 $162,500 $303,750
1872 CC $20 Gold MS 61 $43,690 $61,760
1879 O $20 Gold MS 60 $42,320 $102,050
1885 CC $20 Gold MS 62 $22,430 $34,450
1893 CC $20 Gold MS 63 $14,370 $34,430

Most of these $20 Liberties are quite rare; some are the finest known. Most of them have a population of just two or three coins with none grading higher. The only one with any substantial population is the 1893 CC in MS 63 with a combined NGC and PCGS pop of 34 coins. This does not diminish the fact that it is a very popular coin in this grade and will command very aggressive bids when offered in major auctions; as would any of these coins. It may be a stretch to imagine anyone acquiring a few or all of these coins in the last eight years. However, that is exactly what advanced collectors are trying to do today. There is so much interest in numismatics and in this series in particular, that high-end buyers have become obsessed with owning the best of the rarest coins. As you can see, this aggressiveness has spurred the prices to incredible heights and the current demand dictates that they should move even higher in the future.

The likelihood of these coins showing up for sale is somewhat remote, but if they do come on the market, it is almost a certainty that they would command a premium of the FMV currently listed. For example, the 1870 CC in AU 55 has only one NGC coin certified in this grade with none higher. Along with the 1856 O in AU 58 (total of four certified) these coins are the quintessence of any collection. Their scarcity by grade ranks right up with many of the top rarities in United States numismatics.

With US Gold and Silver Dollars captivating the majority of the coin market, it may be time to look at some other areas that could be ready to make significant moves in the near future. Many collectors use charts to follow the coin market and they may have noticed that several series are lagging way behind in advances. Walking Liberty Halves have started to make a strong move in the last few weeks. It began with the MS 64 grade and now MS 65 and 66 coins are beginning to show the same kind of trend that Silver Dollars have registered over the last few months. Not only is the demand robust, the quantities wanted are excessive in this market when you consider that the MS 65 had been selling in most auctions in the $90 - $100 range for the last six months. The current FMV for MS 64 common dates is now $65; the MS 65 is $163 and the MS 66 rose to $225 this month. If the demand continues, we could see increases of the magnitude approaching the current state of Silver Dollars.

Judging by the information we receive from dealers across the country, buyers in this market outnumber sellers about ten to one. As long as the economy remains status quo and gasoline prices remain outrageously high, collectors and investors will continue to purchase coins that they feel will add significant value to their numismatic and investment portfolios.

This article is a guest article written by:

The thoughts and opinions in the piece are those of their author and are not necessarily the thoughts of the Certified Collectibles Group.