News and Analysis on coins, coin markets, and the coin collecting community #24

A Weekly Column by Greg Reynolds

The purpose this week is to put forth clear, constructive points regarding the collecting of modern U.S. coins. Readers who are already familiar with modern coins may wish to skip to section three, where John Albanese, Jeff Ambio and I provide advice and guidelines for collecting modern coins.

Before the rare U.S. coin auction climate starts to heat up again, I am continuing to address issues that are of interest to beginning and intermediate collectors. This week, I am revisiting the topic of modern coins, partly because many readers last week falsely and unfairly concluded that I was condemning modern coins. I was not saying that only pre-1934 coins should be collected and I was not referring to the artistic elements of the designs of coins minted after 1934. I was discussing the FACTS that distinguish classic from modern U.S. coins.

Indeed, there is a need to clarify some matters relating to recommendations for collectors and values in the marketplace. Last week, I wrote a two part series on 1933/34 being the dividing line between classic coins and modern U.S. coinage. (Please click to read part 1 or part 2.) Two weeks ago, I covered dealer recommendations regarding modestly priced coins for beginning and intermediate collectors.

Jeff Ambio certainly understood my central points last week. Ambio is the author of three books regarding U.S. coins and is one of the leading cataloguers of coin auction lots. In regards to “the 1933/34 diving line, I [Jeff] agree with your basic contention that coins minted prior to that period are much scarcer than those minted after. I [Jeff] also agree with your opinion that collectors paying huge sums of money for post-1934 coins in high grades should reconsider their buying strategies.”

The collecting of State Quarters is discussed in the second section. Strategies for collecting modern coins are addressed in the third section.

I. Commonality of Modern Coins

Although post-1934 coins are generally extremely common in contrast to pre-1934 U.S. coins, people who very much like post-1934 coins and enjoy collecting them should do so. Last week, in part 2, I emphasized that people should not spend large sums on a post-1934 coin solely because such a coin is, or is claimed to be, a condition rarity.

Indeed, I am against the rather common practice of spending thousands of dollars for common coins. For example, auction records reveal that a considerable number of businesses strike Roosevelt dimes have each sold for thousands of dollars.

Generally, I am very concerned about people spending even $35 over face value or bullion (‘melt’) value for a very common coin. Mint errors and recognized unusual varieties are different topics. I am herein referring to standard issues. I am aware that the 1955/1955 Double Die cent is scarce overall. It is, though, a mint error, or, at least, an accidental issue. U. S. Mint officials did not plan in advance for the numerals and some other devices of these cents to be doubled. Errors and unusual varieties require separate discussions, and tend to be exceptions to rules. (more…)

News and Analysis regarding scarce coins, coin markets, and the coin collecting community, #23-Part2

A continuation of a Weekly Column by Greg Reynolds

Usually, this column is published each Wednesday morning and not at other times. I came to believe, however, that this week’s topic is of tremendous importance and warrants two parts. [Click Here to View Part One] My survey of sophisticated collectors and expert dealers, shockingly, indicated that, while most realized that 1933/34 is the traditional dividing line between classic and modern U.S. coinage, few remembered or ever knew the primary reason. U.S. coins minted before 1934 are much scarcer than U.S. coins minted after 1934. Indeed, though there are a few exceptions, regular issue U.S. coins minted after 1934 are common.

From the perspective of a collector, this is the most important and clearest dividing line in the whole history of U.S. coinage. As the basis for this dividing line is not well understood, I feel compelled to explain and prove its importance. I presented logical points and evidence in part 1, and I provide more evidence herein. I then discuss one major reason why it is imperative to emphasize this dividing line now; many people are spending substantial or even vast sums for very common coins, usually without really understanding the factors involved and the traditions of coin collecting in the U.S.

IV. Walking Liberty Half Dollars

As the somewhat recent sharp rises in the price of silver has affected the values of circulated Walking Liberty Half Dollars, it makes sense here to consider those that grade AU-50 or higher. As no Walkers were minted in Philadelphia that date from 1922 to 1933, it may not be suitable to analyze comparative values for Philadelphia Mint halves in terms of the 1933/34 dividing line. Therefore, I refer to Denver and San Francisco Mint halves. Of all the Denver Mint Walkers minted prior to 1934, the 1929-D is the least expensive and the least scarce.

In AU-50 grade, a 1929-D half is worth about three to more than ten times as much as any Denver Mint half dating from 1934 to 1945, with one exception, the 1938-D. The 1938-D is the only regular issue exception, of the half dollar denomination, to the 1933/34 dividing line between relatively scarce U.S. coins and relatively common coins. The 1938-D half is scarce, much more so than any other Denver Mint half dollar issue in the 1930s or later.

In regard to San Francisco Mint halves, there is no such exception. In AU-50 or higher grades, any pre-1934 S-Mint Walker is worth substantially more, usually from two to more than ten times as much, than any San Francisco Mint Walker from 1934-S to the last S-Mint Walking Liberty Half, 1946-S. In relative terms, pre-1934 San Francisco Mint halves are ‘very scarce’ and post-1934 San Francisco halves are quite common. (more…)

By Steve Roach
First published in the Nov. 1, 2010, issue of Coin World

Gold is currently the engine that is driving the rare coin market.

It seems that Coin World’s Market Analysis of late has been alternating between gold one week and everything else the next week. However, an emphasis on gold is appropriate as the market has never seen gold hit the levels that it is currently hitting.

On Oct. 11, the price of gold hit a record London PM fix of $1,351 an ounce and at one point during the day hovered at $1,360.

On Oct. 12, the banking investment firm Goldman Sachs raised its gold price forecasts to $1,400, $1,525 and $1,650 for three-, six- and 12-month horizons, citing falling interest rates and a slowdown of the U.S. economic recovery.

Other investment firms are similarly bullish on the prospects of gold to continue rising in value.

Gold is up nearly 25 percent in 2010, and if trends continue, gold will be heading for its tenth consecutive annual gain.

The U.S. Mint’s release of Proof 2010-W American Eagle gold coins in early October has taken pressure off the secondary market for earlier 1-ounce issues.

At an issue price of $1,585, the 2010 1-ounce coins are trading at the same level as older issues in the wholesale markets, where several dealers are paying up to $1,600 an ounce for coins available for immediate shipment to fill orders from wholesalers who still have customers demanding these coins for inclusion in Individual Retirement Accounts.

As of Oct. 12, the Mint’s Web site posts an expected delivery date of Oct. 27 for new orders of Proof 2010-W gold American Eagles.

The recent announcement that the Mint will produce Proof 2010-W American Eagle silver coins has also cooled off the market for earlier coins tremendously.

Immediately after the news about the Proof 2010-W silver coins broke, market makers reduced their buy prices for Proof silver American Eagles from $55 to $45, in line with the Mint’s $45.95 price of the Proof 2010-W coins when they go on sale Nov. 19 at noon with a household limit of 100.

The Mint has not given any indication of how many Proof 2010-W American Eagles silver coins may be produced.