Economic uncertainty, sovereign risk in western markets and appetite for gold from Asia to underpin market

The World Gold Council (“WGC”) expects that demand for gold will be strong during 2010, driven by growing demand for jewelery in China and India as well as an increase in European and US investment in the context of continued economic instability, sovereign risk and the threat of a ‘double dip’ recession.

According to WGC’s Gold Demand Trends report, published today, demand in India and China will continue to grow driven by jewelery demand, in spite of high local currency gold prices. In Q1 2010, India was the strongest performing market as total consumer demand surged 698% to 193.5 tonnes. In China, demand proved resilient; demand increased 11% in Q1 2010 to 105.2 tonnes.

This strong demand is despite high local gold prices, which on May 12 in India increased to Rs 56,032/0z, the highest level for the year, while at the same time in China prices reached an all-time high of RMB8,480/oz, suggesting that consumers in India and China are becoming accustomed to higher gold prices.
Concerns over Greece’s public finances and debt contagion fears in Europe have led to strong buying in particular for gold coins, bars and gold exchange traded funds (ETFs) during May which may show up in the Q2 2010 figures. While momentum in ETF tonnage paused during Q1 2010, gold ETF flows started to rise strongly again in April and May as investors sought less volatile investments in which to protect their funds against economic turmoil. On 20 May the GLD SPDR Gold Trust held a record 1,200 tonnes, with a value of US$46.88 billion.

Aram Shishmanian, CEO of the World Gold Council commented:

“Currently, European gold investment demand is exceptionally strong, especially from German and Swiss investors. This is mainly attributable to concern over public debt levels in the Eurozone and the potential inflationary impact of the European Central Bank’s (ECB) announcement of the US$1 trillion rescue package to purchase Eurozone government bonds to address the Greek debt crisis.”

“With the global economic recovery still burdened by high and rising debt levels in Western economies, as well as the renewed threat of recession driving down the US dollar and equities, the outlook for gold as a liquid, reliable asset class and as a store of wealth remains highly favorable.”

According to the WGC, global jewelery demand in non Western countries will continue to recover after reaching 470.7 tonnes in Q1 2010. Economic recovery in Europe and the US will add to this demand, as a potential return to restocking in the jewelery sector is likely, given that existing inventories have been run down since the first half of 2009 to very lean levels. This should provide fundamental support to the gold price. (more…)

By Laura Sperber – www.legendcoin.com

Congratulations are in order for Steve Contursi the owner and seller and the Nothern California Collector (the Cardnial Collection) who now owns the WORLDS MOST EXPENSIVE COIN! The Neil/Carter/Contursi specimen 1794 Flowing Hair silver dollar.

We knew it was a matter of time before something like this would happen. You had a hungry collector with funds who cherished a unique coin. He didn’t really have many choices for the date. So it was matter of passing or paying the price. We do know for a fact, there were at least TWO other seriously interested collectors as well who wanted to own it. The new owner simply paid more than the others.

For those who feel the price is extreme, we do not. The coin is unique, high quality, and wildly historical. There is nothing else like it. We strongly believe should the new owner have the long term holding power, when sold, this coin will yet again break all pricing records.

Also, we strongly believe within the next year, the $10,000,000.00 price barrier will be broken. There are two coins that will easily do it when they come to market (not if-Legend has made an offer on one for much more).

Having a gigantic sale that creates a record price just adds to consumer confidence in the high end maket. The DOES trickle down to ALL levels as well (I’m sure we’ll read on the chatrooms how teh typical ebay buyer does not care-but it does affect them). Collectors love auctions because they believe they were only one bid on top of someones elses. In this case, buyers of the rarest coins like seeing the highest levels have activity and move up in value.

OUR COMMENTS ABOUT GOLD

From last weeks Market Report: Gold has heated up and is back in demand. We did warn you! However, we are not certain this week gold won’t take a short breather.

Gold did take a dump. We think the price will fluctuate around $1,100-$1,200.00 for a while. This does not mean by any stretch that the demand for gold coins or bullion has slowed. In fact, since the fall we have heard from even more people who want to own better gold coins. We have virtually no one selling us any gold of any kind (including generics).

A CORRECTION TO A STATEMENT

We stated that we did not know of any $10,000,000.00+ collections on the West Coast. OOPS! We forgot about a few amazing copper collections-and now one heck of a Early Silver Dollar Set! Our thinking really was about Morgans, Gold, and Type. So this furthers our point that there are so many HUGE collections holding many great coins scattered all over. We are sorry about the narrow minded thinking.

Coin Rarities & Related Topics #1 – News and Analysis regarding scarce coins, coin markets, and the coin collecting community

A New Weekly Column By Greg Reynolds

I. Today’s Theme

I maintain that the demand for rarities, while not readily apparent or provable, is very strong, and that reports of minimal supply in 2010 have been overstated. There have been considerably more transactions of rarities, so far in 2010, than even most dealers realize.

Yes, it is true that there are far fewer rarities in auctions during the first six months of 2010 then there were during the first six months of any other year since 2004 or earlier.

The diminishing supply of rarities consigned to major auctions is at the forefront of the ‘news.’Consider that Heritage’s ‘Central States’ convention Platinum Night, on April 29, 2010, contained only a shadow of the offerings in Heritage’s CSNS Platinum Nights in 2009, when the “Joseph Thomas” collection was featured, and 2008, when David Queller’s complete set of silver dollars was offered, including an 1804 that realized $3,737,500! All coin auction firms have experienced declines in consignments of rarities, not just Heritage.

Widely published reports of a dearth of available rarities are not entirely true, at least not in every respect. There is considerable volume in private trading of rarities, more so during the last three months than during the period from Feb. to mid-May 2009. Discussion and examples follow.

II. Introduction to My New Column

Before discussing private sales of rarities, I wish to welcome readers to this inaugural installment of my new column. While my articles tend to focus on SPECIFIC coins, coin issues, collections or auctions, each weekly ‘Rarities & Related Topics’ column will include discussions of several items that may only be loosely connected. This first column will be longer than most subsequent columns. Much has occurred in coin markets since my reports relating to events in Orlando in January. (Click to see Platinum Night review, 1913 Liberty Nickel, or Proof Denver Mint Double Eagle articles.)

I have already written about the coin that has received the most attention since the FUN Convention, the PCGS graded MS-68+ 1901-S quarter. In this column, I become the only analyst reporting on private transactions of rarities so far this year, including Great Rarities. (more…)