We will be back January 4th, 2010. Merry Christmas and Happy New Year.

Sellouts and Year-End Deadlines

By Dave

December 23, 2009

Unless a large purchaser steps forward in the next few days, it would appear that sales of the 2009 Ultra High Relief Saint-Gaudens $20 gold piece will end with a whimper rather than a bang.

In the week ending Dec. 20, buyers took an additional 1,887 pieces to bring the cumulative sales total to 110,681. That’s not bad for an average week, but if there were potential buyers made anxious by the Dec. 31 sales cutoff, they are not showing it.

For comparison, look at the proof 2009 one-ounce gold Buffalo coin. Buyers took 922 of those coins during the same week to bring the cumulative total to 41,553.

Fractional gold American Eagles have sold out. The 2009 half-ounce number is 110,000 coins, the quarter-ounce total is 110,000 coins (yes, the same) and the tenth-ounce number is 270,000.

Buyers who are waiting for 2010 bullion coins can take not that the Mint expects to begin accepting orders for the 2010 silver American Eagle Jan. 19, some three week’s later than what has been customary for each new date.

However, market demand in 2009 was anything but customary. Some 27,843,000 is the current running total for sales of the popular silver coin.

It also appears that the four-coin 2009 Lincoln proof set has sold out at 201,107.

The Mint has a list of products that go off sale Dec. 31. On this list are the Jefferson and Madison Presidential dollar rolls and bags. Any interested buyers have had almost three years to get them, so nobody can claim a lack of opportunity

 By Dave

Price is in the Eye of the Buyer

December 21, 2009

Pricing is an eternal issue. Sellers want higher prices. Buyers want lower prices.

I had a call from a collector who said he had been active for over 50 years. He wanted to talk about an offer a coin dealer made to him about a silver dollar.

Without seeing a coin, there isn’t a whole lot anyone can do about figuring out an accurate price for anything, but the collector wanted to talk so I listened.

Since he was asking questions, I interjected a few words into the conversation.

I told him that nobody was obligated to buy a coin from him at a price that he wants. I said the dealer might not agree with the grade. He might not need the coin.

There are any number of reasons why someone won’t buy something.

I suggested the caller take the coin to others and see what they offer.

He said he did. They offered the same money.

I replied that then that would seem to be the market price of the coin.

The caller still was not happy. I think “disappointment” might be the best word to describe his mood.

I always feel helpless in calls like this.

The coin might be perfectly awful. It might be a jewel. I cannot tell. The price quoted to me was for a run-of-the-mill specimen.

After 50 years I wonder how it came down to this one coin.

Had the caller never sold anything before? I don’t know.

Had he promised his grandson a special present with money from the sale of the coin?

I don’t know.

The only real advice I can give is that every collector should be out there selling something from time to time to stay on top of the market and not let their sense of it rust away.

This might be a good New Year’s resolution for those who have not done this.

World Coin News Names Coin of the Year Winners

By NumisMaster Staff December 22, 2009

Ten outstanding 2008-dated coins have been honored with Coin of the Year Awards by World Coin News magazine.

An international panel of judges selected the winners from hundreds of nominated coins during a final round of balloting that concluded in late December. The awards will be presented Jan. 30, 2010, in a special ceremony at the World Money Fair in Berlin, Germany, by World Coin News executive editor David C. Harper.

“Krause Publications and World Coin News have sponsored the Coin of the Year Awards for nearly 30 years, and each year the entries get better and better,” said Lisa Bellavin, Coin of the Year coordinator for KP. “This round of voting was no exception. The creativity, innovation and craftsmanship shown by mints around the world is nothing short of breathtaking, and we are pleased to honor those who continue to push coin design and manufacturing to new heights.”

The winners include:

Most Historically Significant: Kazakhstan, 100 Tenge, silver, Genghis Khan
Best Contemporary Event: Israel, 10 New Shequalim, silver, Israel’s 60th anniversary
Best Gold: Latvia, 20 Lati, gold, Coin of Latvia
Best Silver: Germany, 10 Euro, silver, Franz Kafka
Best Crown: Austria, 10 Euro, silver, The Abbey of Klosterneuberg
Most Popular: United States, 1 Dollar, silver, American Eagle
Best Trade: Cyprus, 2 Euro, bi-metallic, Ancient statue cross
Most Innovative: Austria, 25 Euro, silver, Fascination Light
Most Artistic: Poland, 200 Zlotych, gold, Warsaw ghetto uprising
Most Inspirational: Canada, 2,500 Dollars, gold, Towards Confederation

Voting for the overall Coin of the Year, as well as the People’s Choice award, will conclude soon, with winners also unveiled online and at the World Money Fair.

For press inquiries, email lisa.bellavin@fwmedia.com. For more information about Coin of the Year, visit www.worldcoinnews.net.

Plenty S-Mint Morgans Remain Affordable

By Tom LaMarre, Coins Magazine

December 22, 2009

The Bland-Allison Act of 1878 gave a big boost to the San Francisco Mint. The law revived the standard silver dollar and required huge annual mintages. The Sherman Silver Purchase Act of 1890 and the Pittman Act of 1921 picked up where the Bland-Allison Act left off.

As a result, San Francisco’s silver dollar production topped the Philadelphia Mint’s in some years. Many dates are still expensive today.

The San Francisco Mint turned out#mce_temp_url#, the first year of the Morgan design. An About Uncirculated-50 1878-S is valued at less than $40.

By 1880, 18 million silver dollars were stored in the San Francisco Mint. One proposal called for them to be shipped to the East, at an estimated cost of $20,000 for every 2 million coins.

But the Philadelphia Mint had its own stockpile of dollars, and the Treasury vaults were at the bursting point.

The 1880-S dollar had a mintage of nearly 9 million. A Mint State-60 example is valued at $36, according to Coin Prices.

Another common date is the 1881-S, which is usually found well struck. Coin Prices lists it at less than $20 in About Uncirculated-50.

Heavy demand for silver dollars was reported in December 1891. Most of the Christmas coins were probably spent, but enough of them have survived that an MS-60 1891-S dollar can be purchased for less than $60.

Counterfeit silver dollars were found circulating in San Francisco in 1897. In most circulated grades, a genuine 1897-S dollar is valued at less than $20.

In 1898, Treasury officials made an arrangement with J. & W. Seligman & Co., which controlled the Anglo-California Bank of San Francisco. The bank received consignments of silver from Mexico, Central and South America and British Columbia at the rate of 10 million ounces a year.

The bank agreed to turn the silver over to the San Francisco Mint in exchange for a certificate of deposit. The bullion was then used to strike silver dollars.

Some of those 1898-S dollars may have been among the coins stolen by the San Francisco city treasurer in 1898, causing a scandal.

By the end of the year, the San Francisco Mint had struck more than 4 million silver dollars. High grade survivors are scarce, but you should be able to find a Fine-12 1898-S for around $25.

The San Francisco Mint’s greatest Morgan dollar year came in 1921, when it turned out more than 21 million. They were the first San Francisco dollars since 1904.

“The first of the resumed coinage of silver dollars, dated 1921, were released from the San Francisco Mint on May 9, on instructions from Washington to supply requests for small quantities,” Farran Zerbe wrote from San Francisco in a letter dated May 10, 1921. “Distribution was limited to not more than 100 in one lot.”

“Silver dollars, seldom seen in most parts of the country, continue in common circulation in San Francisco,” Zerbe added. “It is presumed a large release of the new dollars would drive the old ones from circulation.

“The new dollars are particularly to take the place of those melted to assist our allies in the war and therefore restore silver certificates to circulation.”

More than 21 million 1921-S dollars were struck.

An AU-50 example sells for around $20.

Examiner Bio Gold bull says sell your gold coins

December 20, 7:41 PMRichmond Coin Collecting

Editor of the widely circulated investment advisory newsletter True Wealth, Sjuggerud was arguably the most influential proponent of collectible coins as an investment. (Disclosure: I subscribe to True Wealth.)

His reasoning: “…historically, rare coins soared in gold bull markets.”

In his January 2010 issue of True Wealth just out, he’s issuing a “sell” on collectible coins.

Given the circulation of his newsletter, Sjuggerud had great influence popularizing collectible coins as an investment. Though many cautioned that collectible coin prices are extremely hard to forecast, marketers took the concept and ran with it. After all, past performance showed there was enough truth to the claim to make it credible.

But, as we know, past performance is no guarantee of future results.

Sjurrerud’s favorite was the $20 Saint Gaudens coin in MS65 grade which he advised buying in 2003 when it was priced at $905. With the Saint Gaudens today selling for approximately $2700, he says, “A 200% gain is nothing to complain about, of course. But it’s only roughly in line with the increase in the price of gold since we bought those coins. Said another way, all the profit we’ve made is from the increase in the gold price. We haven’t make any money on the collector’s premium.”

“Those coins” he refers to are a collection of major gold coins minted during the 19th and 20th centuries:

$20 Liberty

$20 Saint–Gaudens

$10 Liberty

$10 Indian

$5 Liberty

$2.50 Liberty

$2.50 Indian

In his December 2004, issue he recommended buying the set and priced it at $24,000. Today, he prices this set at $31,730 for an increase of approximately 32%.

Sjuggerud says, “…we’ve owned the set for five years. In that time gold has risen 150%. The seven-piece set hasn’t kept up with the price of gold…It’s not even close.”

Apparently Sjuggerud still has faith in gold itself as “catastrophe insurance.”

“Could gold soar some day? I believe so. Could the rare coins soar even more than the price of gold? Absolutely!

“But we gave the trade five years. At some point, I have to admit I might not have gotten it right.”

In short, be careful in the markets. Even gold, the ultimate safe haven, can throw curves.

Sjurrerud apparently believes collectible coins have thrown one curve too many

Dec. 18, 2009, 10:06 a.m. EST

Conditions for gold rally could crush other assets

Gold at $3,000 an ounce would turn world to a “terrible place,” says one analyst

By V. Phani Kumar & Myra P. Saefong, MarketWatch

HONG KONG (MarketWatch) — Several analysts predict a rise in gold prices to dizzying heights in the next two years, but if those forecasts prove true, even gold bugs will need to stay alert to ensure that gains in the metal aren’t overwhelmed by losses on other parts of their portfolio.

That’s because the economic conditions under which one would expect gold to thrive resemble an investor’s nightmare — possible hyperinflation, collapse of the U.S. dollar or a surge in yields on Treasurys — may be conditions under which other asset classes such as fixed income and equities could take a major hit.

“For gold to rise further, people have to continue to be fearful of economic recessionary conditions worsening instead of improving, political developments both at home and globally, and financial markets deteriorating instead of continuing to improve,” said Jeffrey Christian, a managing director at CPM Group.

Mark O’Byrne, a director at bullion dealer GoldCore said gold could “rally much higher in the event of another systemic crisis where large banks, corporates and or even countries go bankrupt.”

It could also go much higher in the event of serious inflation or stagflation, in the event of a dollar crisis or an international monetary crisis, or a serious geopolitical incident, he said. And “at least one of these scenarios is quite possible in 2010 or 2011.”

Those scenarios aren’t at all friendly to the rest of an investor’s portfolio.

Gold futures rose as high as $1,218 an ounce in early December before sliding back to the low $1,100 area, where it traded on Friday.

The right stuff

A number of analysts say gold could see new highs over the next few years, thanks to the flood of liquidity in the global financial system in the wake of quantitative easing measures by central banks around the world in the wake of last year’s financial crisis.

“The right fundamentals for gold … remain in place and look set to remain in place for the foreseeable future,” said O’Byrne. “This makes $3,000 per ounce gold an increasingly likely long-term price target.”

Kevin Kerr, president of Kerr Trading International said the precious metal’s “more likely to hit $3,000 than $800 in the next two years.”

“I am bullish longer term on the U.S. and global economies, but … I feel the die has been cast for lower fiat currency prices in years to come and a global shift out of the dollar and into commodities as the new reserve currency,” he added.

Kerr listed hyperinflation, more job losses in the U.S., negative interest rates for an extended period of time, efforts to price crude oil in currencies other than the U.S. dollar and attempts by China to move a larger part of its foreign currency holdings into gold as conditions that would support a further increase in the yellow metal’s prices.

A number of other commentators have also been known for their bullish views on gold.

CLSA Asia-Pacific Markets, for instance, has for a while maintained that gold could hit $3,360 by the end of this decade. Economic analyst Marc Faber, Gluskin Sheff chief economist David Rosenberg, investor Jim Rogers, investment manager David Tice have all been reported in the media as saying that gold prices could reach a range between $2,000 and $3,000.

And Amerifutures managing director Patrick Kerr lists gold purchases by central banks, “the deepest pockets of them all,” as one of his 10 reasons why gold could shoot up to between $5,000 and $10,000 an ounce.

Bear camp

But not everyone’s a bull, or just as optimistic about gold prices.

New York University Professor Nouriel Roubini, credited for predicting the financial crisis in 2006, is in the opposite camp, and recently rubbished the prospect of gold prices rising above $2,000, according to media reports. “Maybe it will reach $1,100 or so, but $1,500 or $2,000 is nonsense,” Roubini said, according to a Bloomberg News report in November, before gold futures rallied earlier this month.

William Gamble, president of Emerging Market Strategies doesn’t expect gold to rise, pointing out that he does not see high levels of inflation — certainly not hyper inflation.

“In fact, thanks to parsimonious banks, the money supply has not been growing rapidly,” he said.

Some investors are content to wait out the high volatility in gold prices, but are ready to swing into action if they drop further.

Komal Sri Kumar, chief global strategist at asset management company TCW Group, said he didn’t see gold prices rising in the near-term as the metal’s ascent to record prices above $1,200 recently was “too much too fast.”

Sri Kumar said news related to credit problems in Dubai and Greece, as well as potential risks elsewhere in Europe, would boost the U.S. dollar’s appeal and in turn hurt gold prices, which are priced in U.S. dollars.

Still, if gold prices fell below $1,000 an ounce, he said he would turn into a buyer. “The world should become a terrible place [in order] for gold to touch $3,000.”

How to play rising gold prices?

Sri Kumar said that the huge money creation by central banks around the world meant that inflation, and not deflation, was a long-term threat, and that he would look for gold prices to go up further if money creation through dollar printing continued.

Even so, he said he wouldn’t chase gold prices higher, nor set sights on gold at $3,000 right away, but rather “approach it in steps.” The answer to whether investors would make or lose money on their portfolios when poor economic conditions knock gold prices higher would depend on the composition of the portfolio, and how investors have managed to reallocate money toward gold and other hedges, he said.

He also stressed on the importance of diversifying, adding that said metal-producing companies and assets denominated in currencies of commodity exporting nations such as Canada and Australia , could also be expected to do well. At the same time, diversifying away from cash, or other investments that aren’t likely to do well, such as consumer discretionary sectors, may be necessary, he said.

“[One may still not know] whether you’re going to be better off or worse off in your total portfolio, but definitely, you’re going to be better off than if you didn’t have any gold,” he added.

Gold Drops $100; More to Come?

By Harry Miller, Numismatic News

December 17, 2009

Have we seen the top? The gold price the morning I’m writing this is exactly $100 below its peak of a week ago. Silver is down nearly $2 as well and platinum about $90. As I have been hinting, these markets were overdone and this drop was inevitable. Is the drop over, or could it drop $100 more? Only time will tell.

Consider this a buying opportunity.

The premiums on virtually all U.S. gold coins are in a state of flux, but many are not as weak as one would think with the dramatic drop in bullion prices. The supply of early type gold is not so elastic that supplies can become readily available just because bullion dropped.

In fact, gold American Eagles have had an increase in premium over the last week because of thin supplies. This is also true of silver Eagles. While I do believe many type gold premiums are on the high side, new supplies are small because most of the old European hoards of the Depression era are dispersed.

The early non-gold type coin market is active and very positive in tone especially in the pre-1850 and Seated issues. Low-grade Bust and Flowing Hair dollars have been very active. Decent-quality-for-the-grade coins command positive prices.

Early copper remains very hot and in demand in all grades with any problem- free coins bringing big premiums and even multiples of most price guides.

We Can Borrow; What’s it Mean?
December 17, 2009
By Dave

Many dealers have to borrow money to finance their inventories. It is standard business practice. It has been so to some degree for as long as I have been a collector. Some dealers over the years have made nice profits for themselves lending money to other dealers.

This is not unusual.

What brings the topic to mind this morning is that the most recent issue of Numismatic News had three full-page ads in it offering money-lending service.

What does this signify?

Does it mean the numismatic community has arrived so to speak and is becoming much more attuned to standard business practices? Are we simply catching up to the world of home equity loans, auto loans or home improvement loans?

Could it signify a growing need among hobbyists for cash? That certainly wouldn’t be good. Borrowers paying back loans might not have the money to go on buying coins at the same space as before.

Might it simply mean that Ben Bernanke’s cheap cash has finally dribbled down to the level of numismatics?

We certainly are not high on the financial food chain. It would take some time to reach our level. We hobbyists are often viewed as mild eccentrics rather than profitable financial clients.

This is a lot to ponder. It seems that by looking at it one way, it could be a negative signal for future business. By looking at it another, it might be a positive signal.

Am I on the fence on this one?

You bet I am. I will keep watching.

Monday, December 14, 2009

The Return of Gold and Silver Eagle Rationing

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