By Laura Sperber of Legend Numismatics

For the record, we expect Baltimore to be a VERY strong show. Why?

There have not been any major shows since Long Beach-which has been a forever 45 days ago. Gold has been on a tear lately. And there have been no major additions to the ever shrinking supply of nice coins.

We fully expect to see the usual suspects running wild looking to buy gold coins before the show begins. Sadly, they will still be cracking out and messing with the coins, but at least they are much more reserved in what they buy. We used to see guys buy coins for “crackout” if they felt they had even a 20% chance. Plus, some upgrades are not worth doing thanks to the new market order (inferior coins selling for so much less).

Still, many dealers who do deal in gold have sold a lot of gold all of the sudden (amazing, only a month ago the big firms wouldn’t even look at generics) and rare gold coins are now selling as strong as ever. Without a major show, it has been impossible to replace them. We’re not so sure the supply of anything at Baltimore will be sizeable.

The price of gold generally does NOT effect the rare coin market. However since there is just so little of anything out there, cash rich dealers will seize the opportunity and buy cool coins to put away because they seem cheap. The rise in gold is definately giving rare coins a bounce up right now.

A SUGGESTION OF WHAT TO BUY

Every day we get asked what should I be buying? As much as we hate making public recommendations, we are going to do so only because we can’t believe how some areas are simply lacking real demand and are selling way too cheap.
(more…)

By Doug Winter – RareGoldCoins.com

The recent Coin World “Coin Values” (or Trends as we long-time dealers call it) features a number of price reductions in the various Liberty Head gold series. This has caused some interesting pricing anomalies that have major ramifications for collectors of rare date gold coins.

The grade range that appears to be severely affected by the Trends revisions is AU50 to AU58. This makes sense as this is the grade range that, in my opinion, has been most severely compromised by the grading services over the years. I think this especially true for the AU55 and AU58 grades; a range that includes many coins that are marginal quality at best.

A number of factors caused these values to be reduced by the Trends editor(s). One is, of course, auction prices. As I have stated a number of times in the past, one of the biggest problems with coin pricing is the fact that one bad apple can literally spoil the whole bunch. Let me give you an example. Let’s say that Trends in AU58 for a specific Charlotte quarter eagle was $9,000 in AU58. Then let’s say that a really, really low end example in an AU58 holder sells at auction for $4,000. Does this mean that the price of this issue should suddenly be cut in half?

I would argue that it shouldn’t. But I would also argue that a compression of values for rare date gold is inevitable.

Value compression is not without precedent. Two of the most famous examples that I can think of are the Iowa half dollar (worth $85 in XF and $100 in MS65) and the Roanoke half dollar (worth $160 in XF and $180 in MS64). The reason why values become compressed for a specific coin is that the market believes that a premium is unmerited. In the case of the Roanoke half dollar, the reason is obvious: because of the cluttered design, an AU58 Roanoke looks essentially no different from an MS64. For better or worse, this is what has happened with certain branch mint gold coins due to erratic grading standards.
(more…)

By Doug Winter – RareGoldCoins.com

I had an interesting experience at the Long Beach show that I thought was worth sharing. A new-to-the-market collector/investor came up to my table and asked to see my “best coins.” I was happy to share them with him and pulled out a gorgeous 1802 quarter eagle in PCGS AU58 and a lovely 1798/7 eagle in PCGS AU55. After some back-and-forth negotiating, I could see this deal was not going to get done. The reasons why it didn’t are what I want to briefly discuss.

Now let me say in advance that the individual that I was dealing with is younger than I am, better looking than I am, smarter than I am and without a doubt much, much richer than I am. He’s someone whose family has had tremendous success investing in other areas and he is a recent convert to the rare coin market. But I think he’s approaching coins from a totally wrong perspective.

This guy likes deals. And he likes sexy, interesting coins. In other words, he wants to buy the best coins that I (or other dealers) have but he wants to buy them at levels that are unqualified, unquestionable “deals.” Good market or bad market, I don’t see this happening.

One thing that I have learned as a dealer in the last few years is that really good coins are really hard to find. Most of the great old-time collections have been dispersed and you just don’t see many “old time Gems” any more. Any when you do, like in the instance of the recent Naftzger Collection of late date Large Cents, the pent-up demand for the fresh, superb coins is so strong that they sell for crazy prices.

The investor I mentioned comes from a real estate background and he is, no doubt, used to panic sellers who have a nice piece of property but who are in over their heads and have to bail. Quickly. This doesn’t really seem to happen much anymore in the coin market. The speculators who bought the “deals” in the last Bull Market are the guys who bought the overgraded, overrated “stuff” that, in retrospect, maybe wasn’t such a good deal after all. The guys who bought the great coins and paid up for them aren’t selling. They aren’t selling because they don’t have to and because they know that what they have can’t be easily replaced. The “stuff” is what you tend to see, over and over, in auctions.
(more…)