An oversupply of U.S. Gold in the marketplace has created tremendous buying opportunities for collectors seeking coins near dealer prices.
Over the past month, we have observed myriad opportunities that were not available
a year ago. The main reason for this transition is that there is an overabundance
of U.S. Gold in the marketplace. Supplies are far in excess of current demand and
that brings up an important note: premiums on common date U.S. Gold are the tightest
we can ever remember. That presents tremendous buying opportunities for the collector
who is always in search of coins near dealer prices. This is as close as you are
going to get without starting your own business.
A year ago at this time, gold bullion was in the $580 range; today it is at $663.
With an increase like that, you would think that common U.S. Gold would be higher
by the same percentage. However, such is not the case. Twenty Dollar Liberty in
MS62 is up only $40 in MS62 and the MS64 is actually down by nearly $300. The MS64
Saint Gaudens was $1,030 last year and it is at the same FMV right now. In MS65
last year, the FMV was $1,640, while today it is $1,480. The $10 Gold Liberty may
be one of the best buys in the market today if you feel prices are destined to rise
again in the near future. The premium for nice AU coins is barely above the melt
level on a wholesale basis. In MS61 last year, the FMV was $430 and today it is
only a dollar higher at $431. In MS62 through MS66, the FMV is markedly lower today.
One of the chief reasons there is so much supply today might be a direct result
of the modern issue bullion coins that the U.S. Mint is producing. A vast amount
of money has been spent on modern issues with little left for truly rare coins.
Most dealers feel this is bound to change in the not-too-distant future.
One of the areas we have seen grow over the last several months is Seated Dollars.
All grades are in demand and the FMV has risen across the chart. Further, there
are not that many available and only occasionally do you see them offered at reasonable
levels. In many cases, our FMV is only a starting point for the buyer and seller
to get together. After the five or six most common dates, the rest of the issues
are not easily acquired. When you start comparing the census reports for NGC and
PCGS, you quickly realize how few of these coins are actually certified in the market.
When you allow for coins that are submitted repeatedly, the total numbers dwindle
even further. In early January of this year common Seated Dollars No Motto were
$1,050 in MS60 and today the FMV is $1,780; in MS63, it was $4,190 compared to the
current $4,380. The With Motto variety in MS60 was $990 and today it is $1,690;
in MS63, the FMV was $2,910, but has jumped to $4,410. It shows how quickly an issue
can move when dealers and collectors figure out how difficult a series can be.
A deeper look at the Seated Dollars certified census of most dates reveals that
there are no more than 500 specimens certified by NGC and PCGS together in all grades.
That is for the most common Seated Dollars; the better dates are usually in the
range of 200 pieces total. Major auctions will typically include a variety of better
dates in high grade. In the past year, auction results have afforded us the opportunity
to update many FMV prices where we did not have listings previously. For a few issues,
just the fact that they appeared in an auction allowed the market to see how the
FMV has increased from the last time we had viable trading information. The 1851
in MS63 had an FMV of $46,000 last year at this time, while today we list it as
$66,880; in MS64, it increased from $63,970 to $85,630. Looking at the census of
this specific date you find that a total of nine coins have been certified by NGC
and PCGS in MS63, while the MS64 indicates only seven specimens with two grading
higher. With advanced collectors still holding millions of dollars and looking for
the right opportunities, you can see that it would not take too much effort for
this series to take off.
One area that seems to have lost favor in the last couple of months is the Gold
Commemorative category. Most issues from MS63 to MS66 appear to be down at least
10% since early January. The 1915 S Pan-Pac Gold $1 had an FMV of $3,170 in MS65,
but is now at $2,770. The 1926 Sesquicentennial was $6,550 in MS65, but now features
an FMV of only $4,860. This is what can occur when market-making dealers in specific
areas just completely drop their support. The second tier of support is considerably
lower and causes some sellers to panic and create further discounts of previous
FMV. There also appears to be an oversupply of $20 High Reliefs on the market. All
of last year, it seemed that whenever they were for sale, there was always a willing
buyer. Now, it looks like someone with the wherewithal could buy about 20 coins
in MS63 to MS65. This time last year the FMV for the MS64 was $37,940 but has dropped
to a current FMV of $31,560. The MS63 has fallen about $5,000 as well.
This mixed market has created some concerns for many numismatists. Those astute
enough to have seen these signs in the past realize it is all a part of a cyclical
market. We had seen this market run for at least three years with no real testing
to the downside. Granted, we saw a few series maneuver back and forth a few times
but the downturns quickly reversed and prices came back to near previous levels.
There were still more buyers than sellers much of the time in most series. Now we
are finding more sellers than buyers and this is occurring in more than just a few
series. Some dealers feel it is weakness, while others think it is a time of opportunity.
It will be a matter of time before we can decide which hypothesis is correct. One
thing is certain: those taking advantage of opportunities when they appear are the
ones profiting the most.
In the span of one year, we have seen every mint state grade from MS62 to 66 of
the 1920 S $10 Indian trade, usually at a major auction. They have traded from $60,000
to just over $400,000. However, possibly the most desirable coin in this series
was recently purchased in the Heritage Auction at the Charlotte ANA. It realized
$1,725,000; it is graded MS67 and is the only specimen certified by either of the
two major services. This coin symbolizes the uniqueness of not only this coin and
series, but numismatics as well. It is why we climb the mountain; it is why we collect.
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.