THE PRICE OF GOLD and gold futures dropped yet again Monday morning, recording the seventh drop in nine trading days in May so far as industrial commodities, global stock markets and the Euro currency all sank amid Athens’ failure to negotiate a new coalition government.

Silver bullion also fell hard, touching $28.44 per ounce and losing 8.9% from the start of this month.

The price of Spanish government debt today fell yet again, pushing 10-year yields above 6.2% ahead of an auction of new bonds later today.

Greek public-sector salaries and state pensions may be unpayable “from the beginning of June” says a letter from stand-in prime minister Lukas Papadimos to party leaders, republished by Ta Nea, after May’s tranche of the international bail-out was cut and tax revenues came in below target.

“We do not think the gold bull market is over,” says a note from Morgan Stanley analysts, even though “gold has moved lower and is trading at levels not seen since December 2011.”

Viewed on a technical chart analysis, “Damage has certainly been done [but] we do not think it is irreversible,” they add, pointing to a sharp rise in speculative “short selling” by gold futures traders now expecting prices to fall further.

“The last time positioning was at these levels, prices embarked on a move higher, rallying to near $1800 per ounce. We are buyers of gold here.”

The rise in speculative short-selling of gold futures is “disconcerting” however, says Marc Ground at Standard Bank, because “while investors have over the past few weeks appeared cautious of running too short on gold, this fear seems to have evaporated.”

Over in the currency markets – where the Euro fell to new 4-month lows vs. the Dollar at $1.2860 – “We continue to target $1.20 for Euro/Dollar,” says Ground’s colleague, currency strategist Steve Barrow.

“Whether this takes time, or comes in an instant, could depend on the outcome of Greece’s political impasse.”

Energy, metal and food prices all sank once more Monday morning as European stock markets lost more than 2% of their value, with Madrid losing 3% and Athens dropping 5.3%.

At the weekend Swedish central banker Per Jansson said that “of course the question [of a Greek exit] is discussed.” Irish central bank chief, and fellow European Central Bank policymaker Patrick Honohan told journalists that “technically, it can be managed.”

“We wish it to be possible for Greece to remain in the euro but Greece must live up to its commitments,” a spokeswoman for the European Commission said Monday morning.

If Greece breaches the agreed terms of its bail-out deal then staying in the Euro would be “an impossible equation and I think in that sense it is an irresponsible statement,” said Finland’s Europe minister Alexander Stubb today about the ongoing calls for an end to cuts in Athens.

German chancellor Angela Merkel meantime suffered a drubbing in a state election on Sunday, with her Christian Democratic Union drawing only 26% of the vote in North Rhine-Westphalia, giving the coalition of Social Democrats and Greens a winning majority of 50%.

Price inflation in Germany’s wholesale markets rose sharply in April, new data showed today, while industrial production across the 17-nation Eurozone fell much harder than forecast, down 2.2% year on year.

On the FX market, the Euro today hit fresh 42-month lows vs. the British Pound, but fell less quickly than gold futures or bullion, with the gold price for Eurozone buyers slipping beneath €39,100 per kilo for the first time this year.

For Indian buyers, “The weakness of the Rupee is countering the fall in the Dollar gold price,” says Jeffrey Rhodes, global head of precious metals at INTL Commodities DMCC in Dubai, speaking to the Wall Street Journal.

“That’s likely to act as a drag on demand in the world’s biggest market.”

“There is hardly any work these days,” complains a Jaipur goldsmith to The Times of India. “First the 21-day long jewelers’ strike and now the increasing gold prices have rendered us jobless.

“It is getting tough for us to survive.”

India’s imports of gold bullion fell by two-thirds last month compared with April 2011.

Gold futures on the Multi Commodity Exchange in Mumbai today slipped back to a 5-week low, down 3.3% from early May’s new all-time highs.

Adrian Ash

BullionVault

Adrian Ash is head of research at BullionVault, the secure, low-cost gold and silver market for private investors online, where you can buy gold today vaulted in Zurich on $3 spreads and 0.8% dealing fees.

(c) BullionVault 2012

Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.

By Charles Morgan with Hubert Walker

If you’re anything like me, then you occasionally submit coins to one of the major Third Party Grading companies to preserve them, attribute them, or to add to your collection of certified coins.

I look at a lot of raw material in the hopes that my grading eye is good enough to cherry nice coins from dealers’ inventories. Most dealers don’t have the time or the expertise to accurately appraise all of their holdings, which means that an eagle-eyed collector always has a shot to buy something significantly undervalued.

This, more than anything, is why I like to collect moderns. With classic coins you have a mature market, and really nice pieces can be very, very expensive. If a dealer acquires an exceptional 1935-S Peace dollar, you can be sure that this coin won’t be brought to market until it’s been sent in for certification. This coin nearly doubles in value for every notch up the MS grading scale it climbs, leaving precious little, if any, wiggle room for a buyer to come out ahead.

This is not to say that I don’t like classic coins. I love them. It’s just that you will never have the opportunity to buy high-quality classic coins relatively near face value, and with older raw coins you’re taking a risk that someone’s tampered with it to make it appear better than it is. Besides, I love being the person who pulls out something especially noteworthy, gets it encapsulated, and preserves it for future generations of collectors.

I realize that traditionalists might argue that a high-mintage modern coin such as a 1998 quarter with an asking price of close to $500 in a top pop grade is a poor investment. They might point to the fact that certified population totals are bound to multiply significantly over time and that downward pressures on price are bound to erase the existing premiums on these coins placed by registry set collectors who are vying for leader board positions. I don’t argue to the contrary. Supply and demand are now, and will always be, the key factors for pricing in the numismatic marketplace.

Having said that, are we to believe that the same rules of supply and demand that apply to 18^th and 19^th century coins will not also apply to moderns? Is there truly “enough” demand for the 1921 Morgan to buy up the 70,000+ mint state examples that PCGS alone has graded? Not to mention NGC, ANACS, ICG or any of the tens of thousands of raw coins sitting in dealers’ inventories? Certainly not. Furthermore, I ask, do you ever see a point when we’ll see a similar amount of modern material graded and certified by a reputable grading company? The answer to this question remains to be seen but there will come a point where it won’t be economically feasible to continue submitting certain modern releases, and attrition will eat away at the total number of raw coins until it becomes a rare thing to pull top pop coins from the wild.

But what shouldn’t be open to debate is the fact that these superior quality coins aren’t going to find themselves, and the longer we wait to look, the less likely it is that we’ll be able to preserve enough high-grade specimens to satisfy future demand. From the 1930s through the fifties and early sixties, coin-crazy collectors were pulling out numismatic treasures en masse. Thanks to the development of a sophisticated grade-centered marketplace, a second wave of numismatic extraction is possible. To give you a leg up on the competition, I’d like to provide you some of my coin selection and submission secrets.

I. Decide Which Coins to Submit

The most important step is selecting which coins to submit, and this requires research teamed with patience and a good eye. Circulating coins don’t get delivered from the mint to the consumer’s hand in a perfect state of preservation, nor are all coins created equally. A variety of factors like planchet condition, the quality of the strike, and die state, can impose limits on how high the grade for a Mint State condition coin can be. Other, more subjective factors, such as eye appeal, also play a role in determining a coin’s “value”. Consider eye appeal. I always tell people, “Eye appeal is ‘I’ appeal”. In other words, if the coin doesn’t appeal to you visually, why would it appeal to anybody else?

A coin with great eye appeal can command stronger prices than a grade that is technically a notch or two stronger on the Sheldon Scale. Grade alone does not determine the desirability of a coin. As a submitter, I would just as soon submit a coin with great eye appeal as submit one that is technically freer of grade-limiting flaws.

If the first thing you do when considering a coin at a coin shop is look at the grade marked on the holder, then you should reconsider your approach.

II. Upside is Not the Only Factor When You Have Coins with Great Eye Appeal

I purchased a 1982-D Washington half dollar, a robustly common silver commemorative coin. The only thing rare about the coin is finding a coin shop that doesn’t have a dozen of them. On one particular visit, I decided to look through every single one of them the shop had, which was about fifty.

I’d hoped to find a super nice one that might grade out MS-69, either for my own pleasure or for profit as the coin is scarce in that grade. It should come as no surprise, that after about twenty-five minutes of looking, I realized that none of the coins would qualify as “nearly perfect”.

What I did find, however, was a beautiful piece with deep reflective mirrors. This is the business strike, mind you. Bold reflective mirrors are not the norm. The reflectivity of the fields gives the devices a near cameo appearance. It’s what I’d call a prooflike coin.

Taking a look at PCGS’s price data and population reports, I knew that this coin had plenty of downside risk and not much in the way of upside potential. My best case scenario is that the coin will come back MS-68 and have some potential market value. This is certainly not the type of coin that I would feature in a submission, but is the kind of coin I’d throw in to round out an order.

Not much upside here. Prices in red represent net loss if certified in those grades.

My Washington came back at MS-66. I think PCGS got it right and while the coin is certainly not premium quality, the prooflike strike may command a premium in the future should I try to sell it. But the process of searching through a stack of coins, and finding something fun and unusual, was well worth my investment.

The second coin is a 1961 proof dime. I enjoy cherrying silver era proof sets from the inventories of cash for gold and silver shops. I recommend you do the same, as these proof sets tend to come from collectors instead of institutional sources. On one stop I found four separate proof sets with at least one cameo’ed coin. I found a 1961 set in a Capital holder with a cameo’ed Franklin half, a 1961 in original government packaging with a cameo’ed dime, a 1957 proof set with a cameo’ed dime, and a 1958 proof set with a cameo’ed nickel.

Of all of these pieces, the 1961 dime had the best cameo. It was blast white on the obverse and reverse, plus it came in a crisp, well-maintained mint package. These aren’t especially expensive coins, even in cameo, but it is difficult to find cameos in silver era proof sets since most of them have been pored over by dealers and collectors. Finding three in one stop is highly atypical.

Like the 1982 Washington half dollar, a later date silver proof- even one with a cameo- is not in and of itself submission-worthy. These are clearly add-on coins to a larger order, but it is the type of coin I want to have preserved.

When the dime came back PR68CAM, I was pleased. A tidy little profit from a proof set I bought at melt, and I have three more cameos to go.

III. Wobble Your Coins under a Grading-Quality Lamp

The biggest mistake you can make in evaluating a coin is looking at it under less than ideal light. Hairline scratches, abrasions, and breaks in luster can all be camouflaged without exposing the coin to light coming from all directions. Also, collectors typically are at a disadvantage by not having a vast pool of coins at their disposal to study and get a feel for the nuances of each date, mint, and series. This comes with time. Unfortunately, when it comes to paying $15 to $30 per submission, time is money.

Your best tool for identifying quality coins is the fine art of “wobbling” (my hat is off to friend and fellow numismatic writer, Rob Ezerman, who coined the term). A proper “wobble” and close inspection can help you separate the contenders from the pretenders. To wobble a coin, hold it by the rim with your fingers and gently and slowly adjust the angle at which light strikes the surface until you’ve observed the coin from a number of directional light configurations. Professional graders evaluate hundreds to thousands of coins a day, so the quickest way for them to downgrade a coin is to look for hairline scratches that reflect light. Wobbling your coins and finding these issues yourself will save you time, money, and lots of frustration.

Remember: a premium quality coin will dazzle no matter how light strikes it. A coin of lower quality will reveal hidden problems when tilted just right.

Use previously-graded coins as a point of reference, but keep in mind that even slabbed coins must be viewed in proper grading light to give you a good indication of quality.

IV. Diagram Your Coins

I also like to sketch out the coins I submit for grading. I do this by filling in a circle with flaws that I find when I’m evaluating a coin. You can use any standard word processing software to print pages with circles large enough to draw inside of them.

Sketching out your coins, starting from the 12 o’clock position and going clockwise around the perimeter is a great way to “save” a record of your inspection. This process also aids in the type of pattern recognition skill that will be essential for you to develop when trying to pre-screen premium quality coins.

In the periphery, make note of the coin’s eye appeal, die state, strike quality, and any problems you think might hurt the coin. Before you make your final decision, look at the coins again and refer to your notes. The better you get at evaluating your coins, the fewer surprises you find during the second review.

V. Stage Your Submission

If you submit several coins from the same date or the same series, it’s best to employ the following strategy to get the best results:

1. 1. Insert your coins into the Saflip facing the same direction. Coin graders give more weight to the obverse than the reverse, so let the coin slide out of the holder obverse first. It saves the grader time and gives them more time to look at your coin.

1. 2. Order the coins in ascending order based on what you feel the grade will be. Graders spend but a few moments looking at your coin before assigning a grade. This skill requires excellent pattern recognition and the ability to visually remember cues gleaned during inspection. Stack the deck in your favor by inching up the quality of the coins one after another.

VI. Keep a Spreadsheet of Your Submissions

Be fastidious about your TPG submissions. The key is to predict as accurately as possible what your ROI (Return on Investment) will be once you get your coins back. I find that two rounds of grading help me decide on the final lineup of pieces I submit. My spreadsheet concept is simple: I list the coins by series, date and mint, and enter in my expected grade for the piece. I also list the coin’s purchase price and the grading cost, plus the potential “values” the coin will have at one grade lower than my expected grade, at my expected grade, and one grade higher. It is rare that I under-grade my own material; most of my coins come back where I thought they would be, or one or two grades lower. When they come back lower, I refer back to my diagrams and compare them again to the coin in the holder. I try to learn from my mistakes.

By the way, I use Microsoft Excel on a Mac but there are alternatives. Apple has Numbers for the Mac, and you can find all sorts of free software available on download sites like www.tucows.com and www.majorgeeks.com. I haven’t used any of the free programs, however, so I can’t vouch for them. There’s also Google Docs, which anyone with a Google or Gmail account can use for free. One good thing about Google Docs is the ability to share your work online with other collectors if you so desire.

VII. Conclusion

Having an accurate picture of what to expect is key when doing a cost analysis of the submission. Also, when it’s time to sell your coins, it’s good to know how much margin you’ll have.

Over time, as you become more familiar with coin grading and the TPGs different standards for a particular series, your accuracy will increase. Your spreadsheet and diagrams will serve as a historical record of all of your submissions and will show you how far you’ve come in assessing the quality of the coins you purchase for your collection.

* * *

Everyone approaches collecting differently. What’s your advice? Share it with us in the comments below.

Flip of a Coin:

If you’ve ever collected an error coin, you owe Arnold Margolis (1925-2012) a debt of gratitude. Margolis worked for NBC for 35 years as a Senior Video Control Engineer, but his real passion was mint errors. He served as a member of the Board of CONE and was the first president of NECA (both now united as CONECA), was the publisher of Errorscope and Error Trends Coin Magazine, and the author of a number of great numismatic books, including: How Error Coins are Made in the U.S. Mints and The Error Coin Encyclopedia.

The design of the 2013 Girl Scout Commemorative dollar has been revealed. Up next, designs for the 2013 Five Star Generals commemoratives and the 2014 Civil Rights Act of 1964 commemorative dollar.

PCGS has just graded one 1982-D Washington half dollar MS-70, which leaves the 2011 Army half dollar as the only modern commemorative business strike release to not grade higher than MS-69. My take on that coin can be found here.

WHOLESALE MARKET gold prices touched their lowest level since the first week of January Friday, hitting $1574 an ounce before recovering some ground, while stocks and commodities fell and US Treasury bonds gained, with dealers in major gold buying countries reporting continued limited demand for precious metals.

Silver prices fell to $28.54 an ounce – also a four-month low, and 6.1% down on last Friday’s close.

Heading into the weekend, spot market gold prices looked set for a 3.7% weekly loss by Friday lunchtime in London. Based on PM London Fix Gold prices, the week ended 2 March was the last time gold fell further in a single week.

On the currency markets, the Euro fell to its lowest level against the Dollar since January 23 – two days before the Federal Reserve published policymakers’ interest rate projections for the first time, showing a majority expected near-zero rates until at least late 2014.

The US Dollar Index – which measures the Dollar’s strength against a basket of other currencies – hit its highest level since March 16 this morning.

“When the market gets very nervous, then they buy Dollars and gold finds it difficult to rally,” says Jesper Dannesboe, senior commodity strategist at Societe Generale in London.

“Given what’s going on in the markets at the moment, any rally will probably just be a bounce before another setback.”

The Reserve Bank of India ordered exporters to convert 50% of their foreign exchange holdings to Rupee Thursday, a day after the currency closed at an all-time low against the Dollar in Indian trading.

Despite the central bank’s move, however, the Rupee again fell against the Dollar on Friday, at one point coming within 0.6% of Wednesday’s low. Rupee gold prices however still traded slightly lower this morning. The most heavily traded gold contract on Mumbai’s Multi Commodity Exchange, the June delivery contract, touched its lowest level in over a month during Friday’s trading.

“Slowly deals are taking place as market is in the falling mode,” one dealer told newswire Reuters.

“Traders will try to catch the bottom…[but] people will not be willing to maintain huge inventory in a falling market and only resort to need-based buying.”

Over in China – behind India the world’s second-largest gold buying nation last year – some gold dealers say they expect to see gold demand growth fall this year.

“Chinese consumers share a quite pronounced tendency in which they usually buy gold when prices are rising and refrain from purchasing when prices are conceived to be on a downtrend,” says Xin Zhihong, vice president at Shanghai jeweler Lao Feng Xiang.

“Some consumers are now sitting on the sidelines…the expectation that gold prices will always rise and that gold’s value can only appreciate seems to have faded.”

“It’s the worst start of the year [for Chinese gold demand] since the financial crisis in 2008,” adds Emily Li, brand general manager at Chow Sang Sang, the second-biggest gold jeweler in Hong Kong.

China’s gold imports from Hong Kong – seen by many as a proxy for overall imports – rose 59% month-on-month in March, figures published this week show. The 63 tonnes figure however was 39% down on last November’s all-time high, while the volume of gold heading from China to Hong Kong also rose, leaving net exports in March at 38 tonnes.

Chinese consumer price inflation fell to 3.4% last month – down from 3.6% in March, according to official data. Growth in retail sales and industrial production also slowed, while figures published Thursday show exports grew by 4.9% year on year in April, compared to 8.9% y-o-y a month earlier.

The lower CPI figure “confirms that inflation is trending down and that the policy focus will remain on promoting growth,” reckons Zhang Zhiwei, Hong Kong-based China economist at Nomura.

“The weak export data yesterday put more pressure on the government…probably policy loosening will become more likely going forward.”

Here in Europe, the Spanish government is set to miss its deficit targets in both 2012 and 2013, with both Spain and Italy expected to fall back into recession, according to European Union forecasts published Friday.

The forecasts, produced by the European Commission, show that Spain’s deficit for this year is expected to be 6.4% of GDP – compared to an EU target of 5.3%. In 2013, Spain is expected to have a 6.3% deficit-to-GDP ratio, versus a target of 3%.

Despite the news, yields on 10-Year Spanish government bonds fell slightly this morning, dipping back below 6%.

France meantime is forecast to meet its 2012 deficit target of 4.5% of GDP. Next year, however, the Commission says it expects the French government deficit to be 4.2% of GDP, meaning that France, like Spain, would miss the 3% target. The Commission has the power to fine governments that miss EU targets.

“Without further determined action…low growth in the EU could remain,” said Olli Rehn, European Commissioner for economic and monetary affairs, adding that there are “large disparities between member states”.

In Germany, consumer price inflation remained unchanged at 2.1% last month, official figures published Friday show.

German inflation however is likely to be “somewhat above the average within the European monetary union” Bundesbank head of economics Jens Ulbrich told the German parliament finance committee this week.

Greece, which is still without a government after Sunday’s election, must stick to its reform plans or it risks having bailout payments stopped, German foreign minister Guido Westerwelle said Friday.

“If Greece strays from the agreed reform path, then the payment of further aid tranches won’t be possible,” said Westerwelle.

Over on Wall Street, JPMorgan recorded a $2 billion trading loss in the first quarter of the year, Q1 earnings published Thursday show.

“This puts egg on our face,” said JPMorgan chief executive Jamie Dimon, who blamed “errors, sloppiness and bad judgment” for the losses.

Investors meantime are “losing faith” in commodity hedge funds, Reuters reports.

“For people that only came in when the noise about commodities started a couple of years ago, they have basically done nothing,” one investor told the newswire.

Ben Traynor

BullionVault

Editor of Gold News, the analysis and investment research site from world-leading gold ownership service BullionVault, Ben Traynor was formerly editor of the Fleet Street Letter, the UK’s longest-running investment letter. A Cambridge economics graduate, he is a professional writer and editor with a specialist interest in monetary economics.

(c) BullionVault 2012

Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.

Numismatic Guaranty Corporation (NGC), a Florida-based independent coin certification and grading company, announced today it has graded 25 million coins – becoming the first grading company to reach this milestone.

Mark Salzberg, chairman of NGC, considers this milestone a great triumph. “It’s remarkable to look back on the collections we’ve seen as we approached the 25 million coin mark,” said Salzberg. “We’re grateful to the collectors and dealers who continue to choose us as their trusted grading authority.”

Throughout its 25 years in business, NGC has been instrumental in expanding the coin industry both in the United States and abroad. The company has helped facilitate the acceptance of third-party grading and authentication internationally, and is a leader in providing comprehensive web resources, available at NGCcoin.com, that enable collectors and dealers to make more informed buying and selling decisions.

After 25 years and 25 million coins, the company’s continued growth is evident. NGC’s submissions have come from 43 different countries and include coins from 2,600 years in history.

NGC graded the first Chinese coin to break $1 million at auction, the 1910 Yunnan Spring Dollar, as well as the South Africa 1898 Single 9 Pond, the Russia 1755 Pattern 20 Roubles and the Ecuador 1862 Quito GJ 50 Francos – all among the most significant and valuable World coins.

Important United States coins certified by NGC include four of the five known 1913 Liberty “V” nickels, seven of the 15 1804 dollars, two Brasher doubloons, and a number of other million dollar rarities.

In 2008 NGC launched its Ancient coins division, which soon certified the “Alphaeus Master” Hadrian Sestertius that sold for more than $2 million at auction. NGC-certified coins continue to achieve record results at auctions and private treaty sales.

“This is an important milestone that we’re quite proud of, but as always we remain focused on the future of the hobby,” said Salzberg. “We’re as committed as ever to developing new services and products that protect the hobby as a whole and increase confidence among our loyal customers.” For more information on NGC and the benefits of coin grading, visit www.NGCcoin.com.

About Numismatic Guaranty Corporation (NGC)

NGC, the world’s largest and most respected third-party coin grading service, was founded in 1987. From the beginning, NGC has committed itself to developing an impartial, trusted standard of consistent and accurate grading. To uphold this commitment, NGC’s full-time grading professionals are no longer active in the commercial coin marketplace, and are prohibited from buying or selling coins to ensure impartiality. As NGC has grown to become the leader in third-party grading services, we have maintained a steadfast and uncompromising commitment to this standard.

Dear Rare Coin Enthusiast,

The U.S. Rare Coin Market is vibrant and active. Collectors, dealers, and investors continue to buy rare coins, bullion, and numismatic collectibles with enthusiasm. We are constantly amazed at how actively our customers are searching for coins! Yet, while we are experiencing strong demand on both our website and in our Ebay store the word ‘picky’ is often used when a customer or dealer describes his purchasing desires.

PICKY is good. Being ‘choosey’ and particular when spending your hard earned dollars is right and proper. You need to both ‘get what you pay for’ and be ‘happy with your purchase’. While both Sherri and I would love to see you spend your money with Bozarth Numismatics, we won’t always have the coins you are looking for. This month I am going to break down what you as a coin customer will have to ‘REALISTICALLY’ pay for a nice coin whether that purchase is through a known dealer or through auction.

Because of a large quantity of poor quality merchandise on the market we have recently seen some lower prices reported in several of the market’s pricing guides. Nevertheless, the ‘picky’ customer knows when to pick his battles and ‘step up’ with that premium for really Choice numismatic material. Unfortunately the vast majority of coins on the market are just average. When you see record prices reported for certain coins you will almost always find that these coins were either potential upgrade coins or very scarce items that do not appear on the market often.

The foremost pricing authority in the rare coin market today is the Coin Dealer Newsletter. The Coin Dealer Newsletter, who I admittedly have been a little hard on lately, has added some very neat and informative features to their publications recently. With the addition of Mark Ferguson to their staff, I believe they are making great strides in the right direction. Mark is not only a sharp guy, but he is an experienced numismatist and did a marvelous job of coordinating and reporting ever changing price levels while he was with Coin World. Coin World’s loss is Coin Dealer Newsletter’s gain. When it comes right down to value, almost ALL U.S. rare coin transactions start with the ‘Greysheet’ bid.

But what should I pay for this coin? Most coin dealers have a little gambler in them. Truth be told, even dealers don’t know what to pay for a lot of coins at any given time. When you add in the fluctuations of the market, the fact that a dealer just can’t stock everything (although a lot of us would love to have the unlimited budget to do so), and the quality and liquidity factors you really have a problem determining what to pay. Dealers weigh several factors when making an offer on a coin.

First, you check the price guides. Second, you see what other similar items have sold for recently. Third, you contemplate whether or not you will have a customer for the item or have to stock it for a period of time, and lastly you pull a ‘rabbit out of your hat’! Seriously, you weigh all the information you have and make any offer. Because of experience, most dealers do this very quickly. A nice scarce coin that is priced ‘right’ will not be available for long. Dealers KNOW they won’t make money on everything they buy. Yet, they ante up and play the hand.

You, as a collector, have disadvantages and, believe it or not, advantages. A collector has the luxury of buying what THEY personally want to collect. The collector also has the luxury of time. Buying nice rare coins and holding them for the long term will almost always be rewarding. The two big disadvantages of being the collector are their budget and the lack of NICE material. The rare coin market goes up and down. The astute collector is always buying nice coins for their collection.

Taking advantage of timing can pay huge dividends in the future. RIGHT now, for example, is a great time to buy rare coins. Price levels for a lot of great rare coins are lower right now than they have been for over a decade. When you find the ‘right’ coin don’t hesitate. Odds are you will have to pay more in the future IF that particular coin is even available. The big question is what to pay?

The vast majority of collectors don’t have the luxury of a good coin show in their area. Because of the internet, you can shop for coins from the comfort and security of your home or office. The collector can buy coins from dealer websites or price lists, coin publications, TV shows, and through a great number of online auctions without leaving their ‘seat’. The premiums you will have to pay are actually pretty close among competitive and reputable dealers or auction houses.

In my opinion, you should NEVER buy coins from TV. Frankly the ‘cost’ of offering items on TV makes buying from TV shows a horrible play. In addition the sheer volume a TV promotion must sell makes the items they are selling ‘average’. One of the first lessons I ever learned in the rare coin business goes something like this: If you can buy a bucket full of them regardless of the price, they are not scarce let alone rare. Remember the secret to a good promotion is a ready supply!

Let me breakdown how most dealers and auction houses make their money.

Dealers with websites or price lists mark up their coins depending on the market at that time, their cost, and how much overhead they have to ‘cover’ before their profit margin. Depending on the price level for a particular item the mark up can range from as little as 5% to 50% in most cases. A dealer selling items priced at under a $100 each will generally have to mark up their items AT LEAST 25% to 50% to cover their overhead and make a profit. On more expensive item dealers are able to work ‘closer’. On items over four figures a dealer will often work on 10% AFTER credit card charges and shipping and insurance costs. On bullion items this mark up can run as low as 3%, but you often have to pay ‘UP FRONT’ because of the volatility of the market.

Most auction houses charge a ‘buyers’ premium. This buyer’s premium varies but most often the bigger U.S. auction houses charge a 15% buyer’s fee. Recently Stacks/Bowers raised their buyer’s fee to 17.5%. In the last couple of years, I have encountered several auction houses that charge as much as a 20% buyers fee. The buyer’s fee covers the cost of selling the item and a profit margin for the auction house. There is NOTHING wrong with a buyer’s fee but….as little as fifteen years ago a 10% buyers fee was normal and going back two decades auction houses actually charged a commission to the seller.

The biggest problem with auctions for example lies in the way they work. First you view the auction lots and determine what you want to bid. Second you bid against an unknown number of other bidders. What is the problem? In my experience, if I pick out ten coins I really want and bid on them, I end up with the two or three (out of the ten) I least wanted. If I ‘stretch’ to buy a great item the quality has to ‘be there’ or I have buried myself price wise.

Ebay operates differently and represents an incredibly huge global market. Ebay charges the seller (just like coin auctions in the old days). When you bid on an item you are bidding what you are paying. In fact, not only are you getting what you bid on for the amount you bid, but most often there are NO shipping and insurance charges. The seller pays the freight. Yes, the fees the seller pays are still part of the cost, but….you know where you stand at ALL times.

The larger coin auction houses have changed their fee structures over the last couple of decades to hide the numbers so to speak. For example, when you pay a 15% buyers fee often times the seller gets part of that 15%. The hammer price (what you bid before the 15%) in addition to a portion of the 15% buyer’s fee go to the seller. Why is that?

The auction houses are competing against one another for the ‘juiciest’ and ‘freshest’ consignments. Depending on the consignment quality they might offer 7% of the 15% buyer’s fee to the consignor. Recently Stacks/Bowers raised their buyer’s fees to 17.5%. Once again, they are playing with the numbers. Now because they are charging a 17.5% buyer’s fee they can offer up to 110% of the ‘hammer price’ to the best consignors. What is the difference? The difference is that they believe they will get more consignments and bidders will not notice they are paying more? In addition, if you are a big buyer who spends more than 50K in their auction you only have to pay a 15% buyer’s fee. What a great deal-except for the collector.

In my opinion, you can buy great coins at a reasonable price from ALL of these venues (except TV). BUT….and here is the rub…make sure you know how the system works. Frankly, knowing what your ‘bottom line’ is going to be ahead of time can make ALL the difference. Remember ‘PICKY’ is good.

Bozarth Numismatics Inc is a full service rare coin dealer. We buy and sell PCGS, NGC, and CAC graded and approved high grade U.S. coins. We sell coins at shows and on both our website bozarthcoins.com and in our Ebay store bozarthnumismaticsinc. Because of our extensive show and buying travel schedule we can often locate those ‘hard to find’ items. We offer free confidential want list services and will call or email you ‘first’ if we locate an item for you. Thanks and Best Regards, Vic Bozarth/The Rare Coin Road Warrior.

Our Show Schedule for May and June include the following shows:

ANA Spring Show Denver, CO May 9-12 TABLE

Texas Numismatic Assoc. Ft. Worth, TX May 17-19 TABLE

Long Beach Coin Show Long Beach, CA May30-June 1 Attending

NGC Trade & Grade Las Vegas, NV June 12-14 TABLE

Greater Chicago Show Tinley Park, IL June 20-22 TABLE

Whitman Coin Expo Baltimore, MD June 28-30 TABLE

by Louis Golino for CoinWeek

Many analysts regularly predict the break-up of the euro zone and even of the European Union, but in reality neither development is likely, especially in the near future.

While it is true that the prospects for a Greek exit from the euro look increasingly likely in the aftermath of the recent Greek elections, it is a mistake to lump together all European Union countries having economic and financial problems.

Greece is clearly broke, and its politics are becoming increasingly polarized, as seen for example in the votes garnered by the Greek neo-Nazi party last Sunday. At this point it is likely that either the coalition government that emerges will voluntarily choose to leave the euro, or it will be forced to do so because the EU will refuse to keep bailing out Greece since is not expected to continue the austerity policies and economic reforms of the previous Greek government.

A Greek exit from the euro will certainly increase global economic uncertainty, rattle financial markets, and may worsen Greece’s economy, but at this point, it is getting close to inevitable. It is hard to imagine how Greece would fare outside the euro zone given how weak its new currency will be in relation to other currencies, but it is even harder to imagine how it will remain inside.

Besides, once the world comes to term with Greece’s euro exit, we are likely to see an improvement in the outlook for Europe and the global economy, which may well drive the value of the euro higher, at least for a while, which is also a plus for U.S. exports. And while the world can deal with Greece leaving the EU, a break-up of the entire euro zone would have much more serious implications.

France, which elected a Socialist president for the first time since 1981 last Sunday, is a much different story. Its new president, Francois Hollande, is a former protégé of the previous Socialist president, Francois Mitterrand, who was a staunch ally of the U.S. and who helped engineer German unification. Moreover, the euro currency was largely his idea.

Hollande is likely to take many steps designed to reassure financial markets that his country will remain within the mainstream of the EU. He will try reach some kind of compromise with German leader, Angela Merkel, about the right balance between growth and austerity. The sticking point with Germany will be convincing it to pursue a more expansionary economic policy by raising wages and agreeing to do more at the EU level to provide liquidity in the form of euro bonds.

The area where France under Hollande is likely to be a significant concern is the structural economic front. He has called for undoing many of the reforms of his conservative predecessor Sarkozy, such as raising the retirement age, but over time I think he will abandon many of his electoral promises in this regard. If not, financial markets will punish France by raising the cost of financing its debt.

The bottom line as far as the euro crisis is concerned is that a way will likely be found to keep the currency and the union intact, but both will remain under great pressure for many years, and the possibility of a break-up of the euro zone will continue to loom in the background.

James Rickards, who is the author of the best-selling book, Currency Wars, and a prominent analyst on global financial issues, predicts that the euro will emerge as the ultimate victor of the global currency wars. He also explains that both the U.S. and China will work to prevent a collapse of the euro because both countries do so much trade with Europe and in order to avoid the economic chaos that would follow a break-up of the euro zone.

In addition, while the U.S. remains mired with a dysfunctional political system that seems incapable of coming to terms with its long-term debt and deficit problems, the euro crisis is forcing EU countries to take big steps towards addressing their own problems. The alternative to reform in Europe is bankruptcy, economic collapse, and a further rise in political extremism.

Some analysts, especially in the U.S., question the idea that Europe is doing more than the U.S. to address its problems by pointing to continuing high levels of debt to GDP ratios in many EU countries. While that is true in some cases, most glaringly of course in Greece, it ignores the fact that many EU countries, including some of those most at risk in the current crisis, have not been profligate spenders and are not heavily indebted, relatively speaking. The main examples of the latter are Italy and Spain, whose main problems are driven by rising interest rates demanded by bond buyers.

So how does all this relate to the outlook for precious metals?

The starting point is to understand that the ongoing global economic crisis has resulted in a situation in which the outlook for metals and other asset classes is driven less by economic fundamentals and more by monetary conditions and currency wars.

In other words, over time issues like supply and demand, central bank purchases of gold, and so forth will shape the outlook for metals, but in the short to medium term, they are more likely to be driven by competitive devaluation of the U.S. and Chinese currencies and the ongoing crisis in Europe. In the coming weeks and months, the euro crisis will keep downward pressure on the euro, and that will drive the dollar up and gold and other metals down.

But in all likelihood both Europe and the U.S. will before long be forced to do more quantitative easing to try to stimulate their economies, as will the Bank of England and Bank of Japan. That is because economic growth will remain sluggish, and they are largely out of options. Those actions will of course be bullish for gold and other precious metals.

In addition, if the U.S. continues on its current path, it will face the mother of all financial crises if the dollar were to lose its status as the world’s reserve currency. The dollar is the main reason the U.S. is currently able to continue financing its rising debts.

As far as metals are concerned, it is true that there are many bullish developments. But it is also important to note that retail demand for metals globally is under pressure at the moment. China and central banks may be buying gold, but mints all over the world are seeing the demand for bullion gold and silver coins decline sharply compared to last year. Many bullion coin buyers are clearly worried about declining prices over the past year.

This is indeed a good buying opportunity for those looking to add to their bullion positions, but be prepared for continuing pressure on metal prices from developments in Europe and around the world. So far, even sharply lower prices have not resulted in a surge of coin buying. If global economic uncertainty increases as the euro crisis festers, there may be even bigger bargains down the road.

But once the focus shifts to the U.S. election and our economic problems later this year, I would not be surprised if the dollar reaches new lows and metals see new highs. Remember that last year’s congressional showdown over the debt limit coincided with the period when gold prices peaked.

Louis Golino is a coin collector and numismatic writer, whose articles on coins have appeared in Coin World, Numismatic News, and a number of different coin web sites. His column for CoinWeek, “The Coin Analyst,” covers U.S. and world coins and precious metals. He collects U.S. and European coins and is a member of the ANA, PCGS, NGC, and CAC. He has also worked for the U.S. Library of Congress and has been a syndicated columnist and news analyst on international affairs for a wide variety of newspapers and web sites.

Numismatic Guaranty Corporation (NGC) has created a special presentation label for coins featured in Top 50 Most Popular Modern Coins.

This newly released book lists the Top 50 Most Popular Modern Coins in terms of popularity, scarcity and affordability. Each coin listed in the book includes a detailed history, images, statistics and a graph displaying its ranking on a 5-point scale. Additional information includes retail prices for uncirculated and proof coins where applicable and in two NGC grades, as well as mintage tables for commonly collected series.

Modern US coins offer collectors an opportunity to build a collection of beautiful coins on a modest budget. This book is a valuable tool for immersing yourself in this dynamic market.

“One of the goals of Top 50 Most Popular Modern Coins was to help collectors to find their path in collecting modern coins.”

According to the authors Eric Jordan and John Maben, “this book includes the most accurate distribution figures known for modern coins up to 2010.”

“Modern coins continue to become more popular year after year, and this book is an excellent starting point for a collector,” said Mark Salzberg, NGC Chairman. “NGC’s special certification label should appeal to collectors seeking to build a certified collection of the coins included in the book.”

Top 50 Most Popular Modern Coins is published by KP Books and is currently available for purchase on www.numismaster.com, elsewhere online and at book stores.

There are two ways to have coins featured in the book encapsulated in NGC’s special label:

• Raw (uncertified) coins may be submitted for grading using NGC’s Modern Special or higher tier service with the instruction TOP 50 MODERN written prominently on the submission form. No per invoice submission minimums apply, but coins to be encapsulated with this label MUST be submitted on their own submission form separate from coins receiving other labels.

• Coins already encapsulated by NGC may be submitted for ReHolder Special Label service for $13 per coin with the instruction TOP 50 MODERN. Again, coins to be encapsulated with this label MUST be submitted on their own submission form separate from coins receiving other labels.

Please make sure coins to receive this label appear on their own submission form as mixed label submission for this special label cannot be honored. All submitters must have an active submission account, such as a NGC Collectors Society account. Questions regarding the special label and submitting coins to NGC should be directed to NGC customer service at service@NGCcoin.com or 1-800-NGC-COIN (642-2646).

About Numismatic Guaranty Corporation (NGC)

Founded in 1987, NGC has become the global leader in rare coin authenticating and certifying, having graded more than 24 million coins. With a presence in the U.S., Switzerland, Germany, Singapore, Taiwan, South Korea and China (Guangzhou and Hong Kong), NGC provides customers with an independent, impartial source of grading integrity and guarantee of authenticity. The trusted choice for thousands of collectors and dealers worldwide, NGC’s record of uncompromising standards has helped to foster greater stability throughout the rare coin marketplace.

Contact: Janell Armstrong
Marketing Coordinator
+1 941-360-3990 x 236
jarmstrong@ngccoin.com

By Charles Morgan and Hubert Walker for CoinWeek

The 2011 U.S. Army half dollar has been selling for a significant premium in 2012, despite the fact that it is a coin virtually nobody wanted to buy last year. The budget-priced item features an army surveyor and two soldiers carrying sandbags on the obverse, and a minuteman on the reverse. The coin is cluttered with inscriptions, and the date (especially on the business strike version) is buried in the churning clouds of exhaust created by a launching missile. At first glance it resembles the Washington Monument- but it is in fact a missile, soaring off into the sky, set to level some remote target…. hardly an image that corresponds with the words “Service in Peace”.

The Army hasn’t enjoyed a peacetime posture in over ten years. This is just one of the many curious aspects of this ill-conceived design.

Cluttered and incongruous motifs aside, the coin was released into a crowded marketplace of military-themed commemorative coins stretching back to 2003’s West Point commemorative dollar. Militarism has been on Congress’ mind as of late, and much legislation has required the mint to keep churning out commemoratives for a consumer base whose demand for the coins has been in steady decline. Considering that both of this year’s silver commemorative releases continue the military theme (the U.S. Infantry dollar’s connection is obvious, the Star Spangled Banner dollar celebrates the penning of a song written during the War of 1812 and depicts Fort McHenry), and next year’s scheduled Five Star Generals set will make it four years running, there seems to be no end in sight for “war” coins.

It seems that the trend is down, down, down for military-themed commemoratives. Perhaps the market has become oversaturated in recent years.

While the law authorizing the Army half dollar set a mintage limit of 750,000 coins (a number the mint haven’t hit since the 1994 World Cup half), only 39,464 uncirculated Army half dollars and 68,349 proofs were sold. These low totals led Coin World’s Associate Editor Steve Roach to proclaim that the coin had an extremely low mintage[2]. Those following the mint’s production reports through the latter part of last year were well aware of this fact, yet the coin still trickled out at just $19.95 a pop until December 31^st.

But now industry types want you to be aware of just how “scarce” these coins are, which is driving demand and consequently an increase in price. If you’re thinking about buying now, be careful not to spring the trap set for you. One large dealer I spoke with off the record admitted that his dealership was a “market maker” for the coin, having literally hundreds of pieces. He offers the coin in NGC holders for $95 and raw for $80. For dealers, turning a profit of $60 per piece on a coin they’ve held in inventory for such a short amount of time is good business. For collectors, it’s time for reflection. If you weren’t in a hurry to buy this coin when it was cheap, why do you want it now that it costs 400% more?

Furthermore, as “scarce” as the Army half is, and specifically as “scarce” as uncirculated specimens are, you find mintage totals for the Medal of Honor and Army dollars nearly as low. Yet you don’t hear industry experts proclaiming how scarce those two coins are. The difference may just be a few thousand pieces- but that’s all relative when it comes to feeding coin dealers’ hype. As collectors, we must be savvy and pick our spots so that we have the most leverage possible. While dealers do deserve to make a living providing collectors with valuable coins and expert advice, we should always look out for our own interests. The current selling spree of the Army half is one of those instances where collectors and dealers interests do not exactly meet. Time will tell if I’m right or wrong about this modern commemorative, but there is one thing I am certainly right about. If you are buying the Army half now, you are five months too late.

Flip of a Coin:

Back to the well again: special Silver Eagle sets seem set to become an annual tradition. At least this year the mint is prepared to meet demand.

At least a few of the Ike Group consortium’s hand-picked CAC Ikes received the coveted gold sticker, a testament to the well-trained eyes of the series’ specialists.

With ANACS working on a revamped website that allows for instant cert verification, could the industry’s oldest grading company soon rejoin NGC and PCGS as eBay authorized TPGs?

James Earle Fraser’s iconic Indian Head Nickel Buffalo Nickel turns 100 years old next year. The change in design was prompted by an effort to beautify American coinage. It’s hard to imagine such a campaign taking place these days.