Jim Bisognani: Forget the Groundhog, Listen to the Gold Bug!

As this article posts, I am torn between addressing two exciting events:

First, it's Groundhog Day. I mean, who doesn’t want to know if Punxsutawney Phil caught sight of his rotund shadow or not? (He reportedly did, forecasting six more weeks of winter.) Second, today marks the official first day of the Long Beach Expo, which is always well received and attended.

As I am pondering the two proceedings, sitting here at my desk in New Hampshire, it is a frigid 10 degrees outside. We will be experiencing gale force winds with expected lows tonight around -15 degrees and even colder over the weekend.

Then there is Long Beach — the site of coins galore, where the forecast will be sunny and around 70 degrees during the expo’s run. Hmm… where would I rather be right now? I am sure glad that our new furnace is up and running. She will definitely get quite the workout.

On the positive, the rites of spring are a mere six weeks away as the month of February rolls around, at least according to the calendar and the beginning of the Spring Equinox. Regardless of what the rotund rodent predicts, I have to keep telling myself it's only six weeks.

As for the coin market, who really knows what will happen this winter and early spring? The coin market doesn’t have a groundhog or woodchuck to blaze a path of discovery with predictions. What I can report is that most dealers on the show circuit are anticipating more of the same. That equates to quick sales and challenges to replenish inventory. I do concur. After an inspiring FUN show, dealers and collectors have every right to be anticipating brisk and spirited activity on the Long Beach bourse. Who knows? In Southern California, anything can happen. Maybe someone on the bourse will bring a pet woodchuck along.

One accomplished collector, my friend Benny from Massachusetts, doesn’t prescribe to the whims of Punxsutawney. Yet, he is a self-proclaimed “Gold Bug.”

“I have been buying US gold coins since I was in my early teens,” says Benny.

My friend describes himself as a collector with a rich collection, but he himself is not rich. “Hey, I have gold coins so some of my casual friends think I am loaded. They always say, ‘That Benny is always buying gold; he must be loaded!’ Well, when I last checked my collection, I had just shy of 150 US gold coins.”

My friend then halted our conversation, asking me to give him a few minutes. “Ok Jim, I just checked. I have 147 gold coins, so this trip to Long Beach should put me well over the 150 threshold.”

The coins in Benny’s coffer are Quarter Eagles, Half Eagles, Eagles and Double Eagles. His collection includes examples of both Liberty and Indian Head and Saint-Gaudens varieties. My friend’s golden collection is the sum tally after 40 full years of collecting. He has only collected US gold coins — nothing really rare, just really nice eye-appealing type coins in MS 63 through MS 66 grade. About half are raw, while the balance is third-party graded.

A 1914 Indian Head $10 from NGC Coin Explorer. Click images to enlarge.

I told Benny that averages to about three and a half gold coins acquired per year over his 40-year journey down his yellow gold road.

“Hey, that is about right. It is what my budget allows. Back when I started collecting around this time in the winter or spring of 1983, common raw choice BU $20 Saints and Libs were going for under $600 each — gold spot was around $475 per ounce then. Then almost 20 years later, in early 2002, I was able to pick up MS 63 to MS 64 examples between $350 and $400 each. Boy, I wish I had more cash then. Now MS 63 coins are going for around $2,150.”

An 1851 Liberty Head $20 from NGC Coin Explorer. Click images to enlarge.

One thing Benny has noticed is that the premiums over melt for Double Eagles have been trimmed even further.

“If you look back just six months ago, around the first of August (2022); I was picking up a couple of MS 63 grade $20 Saint-Gaudens and they were right about 20% over melt value ($2,060). I remember gold spot was trading at $1,775. Now — today — gold spot is 10% higher ($1,950) than when I bought my last two NGC MS 63 $20 Saints (8/1/22), but the spread between melt for MS 63s is under 15%. Of course, the price of gold escalating is translating into a slimmer margin above melt. So even though gold prices are higher, the margins are slimmer.”

A 1913 Saint-Gaudens $20 from NGC Coin Explorer. Click images to enlarge.

What are now Benny’s favorites? “When I get on the bourse floor in Long Beach, I am going after three hand-selected MS 63 Quarter Eagle Indian Heads to bring my collection to 150! Right now, I can get certified MS 63 coins at $540 each.”

Putting that in perspective, I told my friend that six months ago, the same coins would’ve cost him $630 each. Benny quickly countered with, “That’s right, and gold spot has gone up over 10% in the same time these have come down by nearly 15%.”

I will add, historically, that the current price in 2023 is some $40 less than MS 63 Greysheet Bid was when Benny first started collecting his gold coins in January 1983!

Per Benny, the other great value is in ultra Gem $20 US gold. “Don’t miss the boat on MS 66 $20 Saints. Six months ago, MS 66 $20 Saints were $3,500. Now remember, while gold spot is up 10%, the MS 66-type $20 Saints have come down in price by 11.5%. MS 66 Saints are gorgeous, and when the spread between the much, much higher population MS 65s and MS 66s is only about $625, you get so much more coin for your buck.”

I told my friend that, by my calculation and according to the NGC Census, of all the $20 Saints graded by NGC, fewer than 2% have been designated as MS 66. He said, “That’s right, Jim; you can get a high-quality, lower pop coin at virtual bargain levels, in my opinion.”

I wished my friend good luck on his West Coast trip. Benny then quipped, “As I get older, I think I’m becoming more like a reptile or amphibian. I really like to become more active when it’s warmer out.”

I hear you, Benny: Nix the groundhog and listen to the Gold Bug.

Until next time, be safe and happy collecting!

Want to see more articles like this? Subscribe to the free NGC Weekly Market Report.