Seasonal Numismatics: Dealers Embrace Respite

Posted on 7/1/2007

Summertime, and the market is lazy. But despite the sluggish atmosphere, Indian Gold is hot, as are Morgan Dollars and the Proof Two Cent series. Numismedia explores all this and more in this seasonal review.

A guest article from NumisMedia

While the coin market may appear somewhat sluggish to some observers, we remain in a cycle of growth. It may not be the rapid expansion we became used to the last four years, but we are still in a developmental phase. We continue to see new collectors entering the market while many novice collectors advance to a higher state of collecting. The summer typically slows the overall market as vacations and family activities take precedence. Dealers enjoy the time away from a hectic pace. Additionally, when big money takes a vacation, it is sure to have a major influence. When you add to this the element of the reversing metals, we are sure to see some FMV prices fall. What is of significance is that most of the declines can be traced to the more common coins with larger populations.

Nevertheless, a declining FMV may not be a sign of extreme weakness in a specific series. In some cases, prices advanced a considerable amount over a period of time and there was bound to be some profit-taking by those dealers and collectors smart enough to realize that the FMV does not continually rise. Proof Buffalo Nickels had been on a fast course to higher levels, with great enthusiasm shown by collectors. However, since the first of the year, we have seen the FMV fall for several dates in PR67. The 1913 TI was $8,480 in January and the FMV is now at $7,570. We have monitored several specimens in major auctions that did not support the previous FMV. The same can be said for the 1936-37 dates. There has been a noticeable amount of coins available and the current demand forced the FMV to lower levels. In the last couple of months, we have seen a steady downturn in values for the PR67 grade.

On a more positive note, this series is still very much in demand. Most of the other grades are still trading at or above January levels, with some dates even higher. This points out that this current market is very sensitive to grading service census numbers. First, buyers look at availability of coins in the marketplace. Then they look to the census reports to see the quantities certified for various grades. When availability is low and the census is low for the grade, it can be a combination that attracts buyers. Nevertheless, these numbers are not the same for every series. Astute buyers also take into account original mintages and popularity of the particular series.

Previously, Indian Gold was as hot as any series could be. The past year found the $2 ½, $5, and $10 Indians moving out the door as fast as dealers could purchase them. After a long stretch of demand, buyers became motivated in other directions. Supplies increased in the market and prices started to fall. First, the $2 ½ declined, while the $5 & $10 Indians remained fairly steady. Recently, the $5 Indians have started to back off slightly with some of the more common dates available at discounts along with the 1909 D, which is the most common in all grades up to and including MS66. In early January, the 1909 D had an FMV of $4,440 in MS64 and now it is $4,160; the MS65 was $19,370 compared to the current $18,230. FMV for the 1908 $5 has dropped to a small percentage above the 1909 D, thus enforcing the theory that demand has shifted away from this series at current levels.

While demand for the $10 Indian dwindled slightly early in the year, this series has come back stronger than the other two. Mint State grades of MS63 and higher have mostly increased over the past month. A further examination reveals that several of the better dates and grades have recently traded for higher levels than we reported in January. Most of the MS65 grades have increased 5% to 10%; in MS66, most issues have performed about as well if not better with the exception of a few truly rare issues. With updated trading information, we now list the following coins at much higher levels in MS66.

DateJanuary 2007July 2007
1908 NM$23,340$33,150
1908 D NM$55,250$102,050
1910 S$76,050 $115,050
1912 S$70,850$97,500
1914 S$52,000 $162,500

Some of these increases may appear to be very extravagant in nature, but what this points out is that old data may serve only as a starting point when it comes to extremely rare high-grade coins that entice more than one aggressive buyer. If the census is very low for the highest grades and a coin does not trade for some years, the next known trade can be multiples of the previous FMV.

One of the fascinating aspects of studying the coin market is the different characteristics you discover within specific series. While updating the Proof Two Cent series, we noticed the census reports of NGC and PCGS include over 220 specimens of the 1864 Large Motto certified for the Brown, Red and Brown, and Red designations. What makes this very interesting is the fact that only 100 or so coins were originally minted. Granted, we all know that some coins are resubmitted many times in an effort to achieve the highest grade possible. However, due to attrition over time, the likelihood that there are still 100 coins available in the market is not plausible. This being the case, many collectors purchase coins based on potential availability. If the actual supplies of these coins are truly that much less than reported, it would make sense that these coins along with many others could well be undervalued. We have noticed this occur in other series as well and it brings up the point that if all coins are resubmitted by about the same percentage, then there could be a plethora of dates in many series that are valued well below their long-term potential.

Morgan Dollars continue to fascinate thousands of collectors. Even though we are seeing some of the better dates in the $500 - $2,000 range selling at minor discounts lately, the fact is that they are still on many want lists and this is the method that some collectors use to buy coins. They always buy when there are opportunities staring them in the face. There are various ways to collect Morgan Dollars, from year sets to complete sets, to Carson City sets, Prooflikes, Deep Mirror Prooflikes and even NGC-certified GSA Carson City Dollars. We have noticed a new group of collectors looking for high-grade CCs and they are willing to pay the price. However, the census reports indicate that there are very few available in MS66 and higher. It also appears that these new higher prices are attracting more raw GSA Dollars to NGC for certification in hopes that high-grade specimens can be certified. Registry collectors are very competitive and they never rest, even in the summertime.

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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