Gold Closes Up, But the Myth Lives On

Before last week’s convention, I had a discussion about the myth referred to as the “Long Beach Curse.” The prevailing sentiment is that the spot price of gold always goes down during the week of the convention. This phenomenon is often bantered amongst gold dealers deciding whether to load up or unload inventories around these major conventions. During last week’s show, gold touched an all time high, and settled on Friday about nine dollars up for the week seemingly debunking the myth. A quick review of spot prices for the last decade’s thirty shows reveals the trend has some statistical backbone. However, the true curse has been the lack of quality material available for purchase. And this isn’t limited to the Long Beach Convention.

Collectors have continued to cull their collections as economic uncertainty has caused many to tighten their belts. However, they sell off the lesser quality material first. Spending habits have become more selective with the prevailing market focused on value and rarity. When major collections and true rarities enter this market the best quality material is quickly absorbed. The dregs are then recycled through dealer inventories and the myriad of auction houses that also clamor for fresh material. But rest assured, if you’ve been selective in your purchases and your collection was purchased for the coins it contains and not the plastic that contains it, you’re in good shape. The rare coin industry is alive and well – with an emphasis on “rare.” Looking at auction records over the last couple years, it’s easy to see quality and rarity still rule in this hobby of kings.

Now, back to that myth. During the last decade the spot price of gold has gone from a $256 in 2001 to $1297 (the Friday close after the latest Long Beach). It’s hard to imagine during this meteoric rise that the price of gold in any given week faltered. But overall, there were 19 of 30 weeks that showed declines in spot gold during the Long Beach convention. During the first five years of the decade, the rate of down cycles was an astounding three of four shows.

The number of down weeks is a bit padded as several of the weeks with advances only showed modest gains of $2 or less. So if you left the show early, the spot price would have been theoretically down for that show also. Regardless, with over three quarters of the conventions showing weak or down trends, it is no wonder the rumors started. The last five years have shown an improvement on the trend, but gold was still down at more than half the shows (eight of fifteen had declines).

So there is some statistical indications as to how the Long Beach Curse gained acceptance. But again, the real curse is one we recognize with all numismatic venues. There is an extremely diminished amount of quality material. True rarities and top pop condition rarities are commanding strong premiums, while the more common and lesser quality stuff has fallen stagnate. This increasing shift in the supply and demand equation coupled with an ever stronger precious metal price makes the outlook for rare coins seem bright – if only we could find the more coins.

A quick note to thank all our customers who have recently sold us coins or collections. Many of these items were exceptionally rare and of high quality. Thanks to you we have avoided the curse.

Related posts:

1. Long Beach Coin Show and Market Report by William Shamhart
2. Expectations For The Coming Long Beach Show
3. The May Long Beach Show: A Report

Long Beach can be a mystery show. You may think you will do well and you won’t, or you may think you’ll do poor and do great. This show we did what we set out to accomplish-we bought some deals. However, had we not had these deals prescheduled, it would have been a complete bust. Even the now lone auction before the show (Goldberg) had very little Legend quality coins in it. For the first time in 10+ years, we stayed home and enjoyed the Memorial Day weekend.

Prior to”set up” day, we do whats called “lobby leaching”. That’s where we hang out at the hotels and do business (some scheduled, some not). We sensed right away this was not going to be an easy show. Many of the usual suspects had delayed their trips as well and few dealers were around to do business. We bought two coins totaling $4,000.00 Tuesday, a record low. So we gave up after two hours and went to dinner with a customer. Later we were told we missed nothing.

Typically the crowd to get in set up is large and anxious. This time, it was thin and quiet-something very unusual. Two things clearly had a major impact on dealers attendance: East Coast dealers pretty much stayed away because the Baltimore show is less than a week away. Second, it was sadly evident that a number of major dealers gave up their tables. There was no “buzz” on set up day. It was also the first time Legend made NO purchases what so ever on dealer day. There were NO Legend calibre coins to be found on the floor.

WHEN THE DOORS OPENED THURSDAY

Thursday was a complete surprise: a huge crowd showed up! There definitely was activity, however it was hard to tell if many rare coins were bought (we know generics and bullion were in demand). Also, the reduced amount of table may have given an illusion the show was busier than it was.

We had come to the show expecting to buy three deals and did. Deal #1: the Famous Bear Collection. This coin contains some fabulous handpicked mid range type coins. Deal #2: a partial GEM Type set all coins CAC. The coins are both rare and amazing! All are CAC. Deal #3: what we really traveled for, a stunning group of Early Copper coins. Between these three deals, we spent in excess of $1,250,000.00-something we had not done in over 2 years at Long Beach. We did not hear many complaints on Thursday except for the ever severe lack of coins.

THE MARKET

Checkout the results of the Heritage Auction and you will immediately see how strong the market is. They did not have any blockbuster collections and prices still managed to reach spectacular levels. The prices realized more than proved how strong demand is. There was a small group of GEM MS/DMPL Morgans all Ex PCGS Tour that brought crazy money. These coins had been off the market for many years. A collection of old holdered PR Seated and Barber Dimes brought insane prices (example $8,000.00 for a 1899 PCGS PR66 10C). Better gold coins also sold for very strong money as did pretty much anything nice and fresh. Someone at Heritage had told us that before the auction began, they had an 80% sell through.

With the stock market acting crazy, our government printing more money and expanding debt, and foreign economies now in shambles, people are seeking hard assets again. They especially seem to want better GEM gold or any choice Bust gold. Indian gold is impossible to find, but that leads the demand, We can say for a few of these series we have not seen a single GEM in the past few months! Published price guides are not helping since few if any coins are trading. We can not stress enough how critical it is for collectors NOT to be afraid of paying strong premiums in todays market. You’ll miss out on great coins. Demand is not shrinking, only the supply has been.

We expect the market to slow between the Baltimore Show and the ANA Show in early August. with so few coins to trade, dealers will take vacations and probably be content to prepare for the ANA Show. Of course if gold does something dramatic, then dealers will be there in full swing. Prices might actually drop 5-10% during this time but pick right back up as activity increases. If you want some smart buys, shop hard during the next 45 days!

Link to Complete Legend Market Report

Related posts:

1. Long Beach Coin Show and Market Report by William Shamhart
2. THE 2009 SUMMER LONG BEACH SHOW – Legend Market Report
3. Market Report – The Long Beach Show

Here we would like to highlight 4 of the World Coin Highlights, coincidentally all from the previous Goldberg’s Millennia Sale. They are as follows:

Lot 3411 Russia. Peter I, 1682-1725. Novodel Ruble struck in Gold, 1705 (Moscow).

Fr-76 (62); Sev-12; Bitkin-532; Diakov-page 87, part 1. 44.22 grams. Laureate, cuirassed youthful bust right. Reverse: Crowned, double-headed eagle with scepter and orb. Plain edge. Sharply struck with all details bold, Peter’s hair curls in higher than normal relief. The surfaces are fully prooflike on both sides, with the devices softly lustrous to frosty matte and the fields reflective with an almost watery texture. Undoubtedly a high gift of state, the coin has been carefully preserved, with minimal marks or hairlines. The reverse die shows faint radiating cracks. This is one of the most important of all Russian coins!

Struck in gold to the weight of 13 Ducats, 44.22 grams, and created from the dies of the novodel ruble of 1705 (Sev-185), this is the plate coin shown in Bitkin and Diakov which appeared in both the 1977 Soderman and the 1991 Goodman auctions and is the only specimen appearing at public auction in over 25 years. Severin mentions this particular specimen (his number 12) as well as another weighing 40.4 grams, making this one of only two known examples. He also mentions a gold 1707 rouble (no. 18) and a 1723 in 12-ducat weight, each presumably unique. NGC graded MS-63.

Among Peter’s numerous reforms, he caused his country’s coinage system to change from being the most old-fashioned in Europe to being the most up to date. His was the first coinage to employ the decimal system (dividing the Ruble into one hundred smaller units, of copper Kopecks). Part of his reform involved devaluation, which made, for the first time, the Russian Ruble equivalent in its buying power to the Polish, Saxony and Silesian thalers which had seen such free circulation within the country before. It is said that, when the first Ruble coins bearing Western-style Arabic dates were struck in 1707, it was Peter himself operating the coin press!
Estimated Value $275,000 – 325,000.

Ex Dr. Robert D. Hesselgesser Collection (5/30 – 6/1/05), lot 1751; Goodman Collection (Superior, Feb. 1991), lot 4; and Soderman Collection (Swiss Bank, Feb. 1977); Illustrated in Money of The World, coin 115. Ex Millennia, Lot 802 where it Realized $340,000

Lot 3158 Guatemala – Central American Republic. 8 Escudos, 1824-NG-M (Nueva Guatemala). Fr-26; KM-8. 26.96 grams.

Radiant sun face over row of volcanoes. Reverse: Tree on foliate ground, value on either side. Exceptional detailed strike, with only slight adjustment marks remaining. Minor faint random hairlines at centers, otherwise glittering to proof-like luster overall. Probably the finest known example of this rarity. NGC graded MS-63 Prooflike.

The Central Americam Republic was centered in Guatemala. It was totally ineffectual and dissolved betwwen 1838 and 1840 after each state opted for independence. At this time, an illiterate highwayman named Rafael Carrera pledged a vendetta against the Guatemalan president of the Central American Republic, Francisco Morazon. Carrera was backed by the conservatives in Guatemala as well as the powerful Catholic Church. He succeeeded in dominating Guatemalan politics and was named president for life. He actually did a relatively good job as president given the chaotic times. Despite his humble background, he is known as the founder of modern Guatemala (El Fundador).
Estimated Value $125,000 – 150,000.

Ex Superior ANA Sale (August 19-23, 1975), lot 2585, where it realized a hammer price of $20,000 against a $5,000 estimate (this one of the highest prices paid for a foreign coin in that sale). Ex F.C.C. Boyd Collection, acquired by Charles Wormser & John Ford, a.k.a. New Netherlands Coin Company; thence personally consigned to the ANA Sale by Wormser; Illustrated in Money of the World, coin 166. Ex Millennia, Lot 1058 where it Realized $145,000

Lot 3942 Mexico. 8 Reales, No Date-M (Mexico City, c. 1535-6). Excessively Rare — one of only 3 specimens known.

Of the highest significance for the history of New World coinage. Emphasizing the experimental nature of this issue, one can discern that this coin is a test strike. Apparent in the fields are flattened designs, indicating that the present piece was overstruck on itself at least once, if not two or more times! NGC graded EF-40.

Carlos and Joanna, or Johanna, issued the first coins from Europe for the New World. Johanna was the daughter of Ferdinand and Isabella, and heir to the Spanish throne. She married Philip the Handsome, and they had a son named Charles. Both Johanna’s mother, Isabella, and her husband, Philip, died young. By all reports this made Johanna mentally unbalanced. Her son claimed co-regency with Johanna, and had her imprisoned in the castle of Tordesilla. He then ruled in name with her, but effectively he ruled alone. So much for filial love.

Only 3 pieces were found in a shipwreck. One is held by a collector who wants one million dollars for his example. Another brought $373,750 at a Heritage sale last year at New York. The salvage group that found the shipwreck, and who at one time had all three coins in their possession, consigned it. The winning bidder, a well-known Latin-American collector, was prepared to pay much more for this coin. At the time of the sale, there were rumors of many more known examples; thus, many major buyers did not attend the sale or bid on this important coin.

Mr. Daniel Sedwick, who represented the salvage group at the sale, stated that this was the last piece from the shipwreck. Since the auction, it is now confirmed that only three of these coins are known. The discovery specimen is being offered here.
Estimated Value $250,000 – 300,000.

Illustrated in Money of the World, coin 144. Ex Millennia, Lot 1073 where it Realized $270,000

Lot 3981 Peru. 8 Reales, No Date

(c. 1568-1571), P-R (Lima). WR-1; KM-13; Sellschopp 1; Calbeto 243; Guttag 3993; Dasi 126. (Francisco del Rincon, assayer). 26.70 grams. Philip II, of Spain, 1554-1598.

Crowned arms of Castille and Leon; assayer’s initial at left. Reverse: Crowned pillars over waves, motto between; value below. Choice even strike, perfectly centered on very round flan. Very fine old collection toning. Of the highest rarity, and the utmost historical interest for New World numismatics. This is among the finest of little more than a handful of known examples.

It is thought that from 7 to 10 examples at most, in any grade, exist. The coin’s fame and desirability rests on the fact that it was the first crown-size coin of South America. Francisco del Rincon opened the first mint in the Americas in Mexico City in 1536. NGC graded AU-55.

Lima was founded by the conquistador, Francisco Pizarro in 1535. He named it the city of the kings. It became home to the Viceroyalty of Peru, and an important religious center as well. In fact, Lima was the second city of the New World behind Mexico City. Its mint was opened in 1568. The first 8 Reales coins struck there are great rarities. As stated by Wayte Raymond, “Of the greatest rarity and interest.”
Estimated Value $200,000 – 250,000.

Ex F.C.C. Boyd Collection. This coin is the Wayte Raymond plate coin (F.C.C. Boyd); and so too for Dasi (copied from the Coin Collector’s Journal, Jan.-Feb. 1947, page 13). This coin’s only auction appearance was in the Superior A.N.A Sale, August 1975, lot 2022, selling against a $2000 estimate for an astounding, at the time, $23,000. A similar but somewhat lesser example (lot 20) sold in 1988, at the Swiss Bank Coins of Peru Auction, October 1988, for an even more astounding $120,600! Illustrated in Money of the World, coin 145. Ex Millennia, Lot 1150 where it Realized $240,000

Related posts:

1. Heritage’s Upcoming Long Beach Coin Auction Highlights
2. Finest Known Russian Family 1-1/2 Rouble of 1836 Highlights Heritage’s World Coin Sessions at September Long Beach
3. Highlights of the upcoming Champion Hong Kong Auction April 1, 2009

“This special exhibit is a superb collection of historic and rare private coinage from 1787 to 1792 and early items from the Philadelphia Mint from 1793 up to 1852. The collection was assembled by Martin Logies and will be exhibited courtesy of Bowers & Merena Auctions,” said Ronald J. Gillio, Expo General Chairman.

Highlights of the exhibit include the following coins that were part of the 2009 PCGS Best of Registry winner for Large Cents Basic Set:

1793 Chain AMERICA S-2 variety formerly in the Beckwith, Collins and Naftzger Collections and graded PCGS MS65BN;

1793 Wreath, Vine and Bars Edge formerly in the Naftzger Collection, PCGS MS69BN;

1794 Head of 1793 formerly in the Garrett Collection, PCGS MS64 BN;

and 1803 No Stems S-243, PCGS MS66RB, formerly in the Helfenstein and Naftzger Collections.

During the three-day Long Beach Expo more than 1,000 dealers will be buying and selling rare coins, paper money, stamps, postcards, historic documents, antiques, estate jewelry and other collectibles. Some dealers will provide free, informal appraisals for visitors.

A free gold coin door prize will be awarded each day to a lucky, registered visitor, and a children’s treasure hunt will be held on Saturday, June 5. A half dozen educational programs and collectors’ clubs meetings will be conducted during the show and will be open to the public.

Heritage Auction Galleries of Dallas, Texas (www.HA.com), the world’s largest collectibles auction house and the official auctioneer of the Long Beach Expo, will hold a public auction of U.S. coins in conjunction with the show.

The public hours are Thursday and Friday, June 3 and 4, 2010, from 10 a.m. to 7 p.m., and Saturday, June 5, from 10 a.m. to 5 p.m.

General admission is $6 (good for all three days); $4 for members of any coin or stamp club who display a valid membership card; and $3 for seniors 65 and older. Free admission for children ages seven and younger. Discount coupons are available online at www.LongBeachExpo.com.

For additional information, call Expos Unlimited at (805) 962-9939 or the Long Beach Convention Center during the show dates at (562) 436-3636.

The Long Beach Expo is a division of Collectors Universe, Inc. (NASDA: CLCT).

Related posts:

1. PCGS Exhibit, PNG Seminar Highlight September Long Beach Expo
2. ESM Collection of Early Proof Copper Coins To Be Displayed at Long Beach Coin Show by PCGS
3. Grading Specials Highlight PCGS’ Offerings at September Long Beach Expo

The $10 million exhibit was publicly displayed during the Long Beach Coin, Stamp & Collectibles Expo in February, marking its 10th anniversary.

“The ‘Ship of Gold’ exhibit is out of dry dock” said Ronald J. Gillio, Expo General Chairman. “The eye-opening display on the convention center floor is housed in a specially-constructed 40-foot long representation of the famous ship’s hull. This will be the first public appearance of the ‘Ship of Gold’ exhibit anywhere in the country in six years.”

The exhibit is courtesy of Monaco Rare Coins of Newport Beach and involved months of work to coordinate the display with collectors who privately own and now have generously loaned many of the items for the exhibit, according to Adam Crum, Monaco Vice President.

“The ‘cargo’ on display include examples of historic assayers’ ingots as well as San Francisco Mint and California territorial gold coins with a combined value today of over $10 million. One of the highlights is a huge, 662.28 ounce Kellogg & Humbert ingot. Weighing just over 55 troy pounds, it is the fourth largest gold bar recovered from nearly 8,000 feet blow the surface of the Atlantic Ocean where the Central America sank in a hurricane in September 1857 while carrying California gold from Panama to New York City,” said Crum.

There was also one of the 13 recovered octagonal $50 gold pieces produced by the United States Assay Office of San Francisco, and the remains of a wooden cargo box that still contains approximately 110 Double Eagles as they were found on the ocean floor. Many appear to be 1857-S $20 gold pieces, apparently freshly struck at the San Francisco Mint when they were placed in the container for shipping.

Visitors to the exhibit also saw the front pages of three 1857 newspapers that published amazing stories about the shipwreck, the ordeal of survivors and the devastating economic effects created by the loss of the gold.

Bob Evans, the chief scientist on the 1980’s mission by the Columbus-America Discovery Group that located and recovered the fabulous sunken treasure, was also at the Long Beach Expo display each day to meet with visitors and present educational programs about the SS Central America, her cargo, crew and passengers.

The Ship of Gold display was first publicly presented at the February 2000 Long Beach Expo.and has seen by over a million people in half dozen other cities across the country.

Links of Interest:

• Coin Television
• SS Central America
• Long Beach Coin Expo
• Monaco Rare Coins
• Purchase this Video on CoinVideo.com

Related posts:

1. Historic SS Central America “Ship of Gold” Exhibit Returns to Long Beach Expo Coin Show
2. SS Central America Shipwreck “Ship of Gold” Exhibit Comes to ANA World’s Fair of Money in Boston
3. Giant Gold Rush Ingots at Long Beach Expo