NumisMedia Market Report: Out with the Old, In with the New

Posted on 1/17/2012

The beginning of a new year brings with it hopes for continued success all through the coin business.

While 2011 was a remarkable year for most dealers, the decline in the metals over the last several weeks has put a damper on the overall market. Many buyers typically postpone major purchases as the year ends, while others wait for the annual FUN Convention in Florida. If the metals continue in their current pattern, it should have a significant impact on the first major show of the year.

In today’s market, a significant number of advanced collectors and investors are taking advantage of major auctions to purchase rarities. One of the benefits here is that you can see how the competition feels about certain coins. If there is a lot of interest, it reinforces attitudes about demand in the overall scheme of acquisitions. Heritage Galleries will host the Official Sale at the FUN Convention, which includes a special offering on Platinum Night. This is always a very exclusive event and is sure to please many collectors. There is no end to the number of rarities offered in this sale. Competition will be quite aggressive, especially for coins that have low populations in high grades.

A look back at the year in Morgan and Peace Dollars illustrates robust advances, new highs, and stability at year’s end. At the beginning of 2011, MS 65 common date Morgan Dollars showed an FMV of $173. The year ended at $194. This is a nice increase of 12% for the year. Nonetheless, there were opportunities to make much more money throughout the year as this market had a lovely run to $263 in May before heading back down to the current level. The following chart shows month-by-month FMV for the MS 65 and MS 66 Morgan Dollar.

Morgan Dollar MS65 FMV MS66 FMV
Jan 2011 $173 $338
Feb 2011 $178 $338
Mar 2011 $193 $338
Apr 2011 $215 $369
May 2011 $263 $488
Jun 2011 $231 $500
Jul 2011 $206 $475
Aug 2011 $210 $488
Sept 2011 $210 $488
Oct 2011 $206 $475
Nov 2011 $200 $450
Dec 2011 $194 $444

As you can see the MS 66 made a more spectacular advance during the year and finished the year higher by 31%. The market making dealers in this series were so busy from April to June that they barely had time for all the bullion activity that took place.

While common Peace Dollars had the same type of advances during 2011, they did not have the consistency of the Morgan Dollars. This is simply due to the fact that Morgan Dollars are more popular. The MS 65 Peace Dollar began 2011 at $148 FMV and wound up at $185; this is up by 25%. However, although the MS 66 did rise to $690, it did not have the strength to create the kind of increases that the other coins showed. Hundreds and thousands of MS 66 Peace Dollars were trading, but the overall market was fairly balanced and there were probably more coins in the market than were needed at the time. At year’s end the MS 66 was actually down by almost 5%.

The following chart shows the month-by-month movements of the FMV for the MS 65 and MS 66 Peace Dollars.

Peace Dollar MS65 FMV MS66 FMV
Jan 2011 $148 $660
Feb 2011 $150 $660
Mar 2011 $160 $660
Apr 2011 $175 $660
May 2011 $231 $690
Jun 2011 $225 $670
Jul 2011 $200 $670
Aug 2011 $210 $670
Sept 2011 $206 $660
Oct 2011 $194 $660
Nov 2011 $190 $640
Dec 2011 $185 $630

Again the busiest months were from April to June when almost every dealer was participating in this market. They were selling Dollars to most of their customers and everyone was making a lot of money. Then the metals began to move more dramatically on a daily basis and everyone turned to Gold, Silver, and Platinum. From the beginning of July to the middle of September, Gold rose from $1,483 to well over $1,800. The daily movement of the metals demanded the attention of every dealer and the rest of the coin market was of secondary importance. How the metals will perform and the effects it will have on the overall coin market will be the theme for 2012. What you can be sure of is that Silver Dollars will continue to attract novice buyers as well as advanced collectors.

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.

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