by Louis Golino for CoinWeek.com

One of the purposes of this column is to provide readers with coverage and analysis of the constantly evolving markets for precious metals because those dynamics play such a big role in today’s coin market.

After a difficult fourth quarter of 2011 when metals declined sharply, prices have been rebounding recently, and gold in particular is in a consolidation phase, building a base of support in the $1600-1700 range.

Silver and platinum have been underperforming compared to gold, although both are off their recent lows of roughly $26 and $1400. At their current levels of roughly $30 and $1500 respectively, both white metals look like a bargain to me, especially if the economy continues to improve.

As they were falling in price during the fall, commentators were again proclaiming the end of the gold bubble, or at least questioning whether gold had peaked, something which mainstream financial analysts do almost every time gold declines a few dollars.

In fact, most serious gold analysts, such as Jeffrey Nichols, a precious metals columnist for Coin World, believe gold will be several multiples of its current price in the coming years.

Mr. Nichols said recently that he thinks gold could see as much as a 50% gain in 2012 from the recent low of about $1580. “Prices of $3000, $4000, and even $5000 an ounce are very likely during the course of this long-lasting bull market, a bull market that still has years of life left to it,” according to Mr. Nichols, who regularly travels to China to speak on gold.

Europe and the Dollar

The decline in metals that took place after gold peaked in early September was driven by three main factors.

First, hedge funds and other institutional investors had to liquidate precious metals to cover losses in other asset classes that had not performed as well; second, such investors typically rebalance their portfolios at the end of a year; third, the European debt crisis resulted in a flight to quality, as investors sought the perceived safety of U.S. Treasury securities.

If the situation in Europe deteriorates, that will probably drive gold in particular to new highs, as wealthy Europeans seek to preserve their assets in the face of a declining euro.

The unusual circumstances that prevailed in the fall, when gold declined as concerns mounted about Europe, may be ending, and the more normal pattern of seeking refuge in gold, rather than the dollar, may return.

However, heightened volatility is widely expected. If the U.S. economy continues to rebound during the year, which is by no means assured, gold could face substantial temporary headwinds.
Meanwhile, both the Indian wedding season and the Chinese Lunar New Year are approaching, which helps underpin demand, since gold and silver are the most popular gifts for both occasions.

Inflation

Precious metals are often described as an inflation hedge more than anything, but I think the relationship between inflation and precious metals is more complex than most people realize. There is no reason gold and other precious metals can not increase in the absence of inflation, as has been the case for years now.

A reader commentary published in Numismatic News recently argued that because inflation is likely to remain low, metal prices will remain low, and silver may never even reach $50 again. The writer was responding to the almost constant talk one hears from some bullion watchers that hyperinflation is a looming threat in the U.S., a point most economist would dispute.

When it comes to inflation, one must distinguish between the short to medium-term and the longer-term outlook. I think one also has to make distinctions in terms of regions of the world since some currently face inflationary pressures, while others face deflationary prospects.

It is likely that while our economy is still getting back on its feet, which will take several more years at a minimum, inflation will continue to trend low within the U.S., and in Europe there are even concerns about deflation, as recession fears grow.

In China and other emerging market economies inflation has indeed trended higher in the last couple years, providing part of the impetus for gold and silver demand there, but inflation in China has begun to moderate in recent months.

It is also true that the U.S. government, through its calculation of the consumer price index, understates the real rate of inflation, probably to save money on entitlement programs that have cost of living adjustments based on the rate of inflation.

But that does not change the fact that there is little likelihood of high inflation, or especially of hyperinflation, in the short-term, though it could emerge at some point in the future, especially if the dollar continues losing purchasing power, or even collapses.

Quantitative easing

The hyperinflationists point to the two rounds of quantitative monetary easing the Federal Reserve has engaged in since the start of the current crisis and argue that all that money creation will lead to high inflation (which it may indeed, just not for some time).

In a slow economy in which people and companies are hoarding their cash, a lot of those extra dollars the Fed has printed are not circulating. They are sitting on the balance sheets of banks and corporations.

That partly explains why the monetary easing programs have not resulted in much inflation so far. The inflation we have seen has been primarily in energy costs, which are not part of what the government calls core inflation (something I have always found odd).

In fact, many gold bulls keep hoping the Fed will announce another round of quantitative easing, believing that is the sure path to higher prices.

More QE would indeed be bullish for metals because it will lead to further dollar depreciation and weakness, not because hyperinflation is on the horizon. But given all the controversy surrounding QE 1 and 2, the Fed will be very careful before undertaking QE 3, and is only likely to do that if the U.S. economy reverses course and conditions worsen substantially.

In Europe the prospects for monetary easing are much stronger, perhaps even inevitable, since it is probably the only way to deal with the debt crisis there, i.e., through reflation, or devaluation of existing debt. But that action will also lay the groundwork for the next crisis.

Interest rates

When it comes to understanding the precious metals markets and where metal prices appear to be headed, it is the interest rate, especially the yield on U.S. government debt and other supposedly safe bonds, that really matters, at least in the absence of serious inflationary pressures.

That is because if investors at some point down the road are able to receive a decent after-inflation return on assets which at least in their view are relatively risk-free, such as Treasury bonds, they will flock to them, which is likely to depress stock and metal prices. Riskier assets tend to underperform when interest rates rise.

But we are years away from any such development, and that is probably the main reason why most precious metal experts think the gold bull run will not end anytime soon. Gold should continue to do well as long as real interest rates (after inflation) remain negative. It is even possible that gold and other metals could rise after rates are substantially higher, depending on overall economic conditions.

In addition, new supplies from mine production will not be enough to satisfy expected future demand, as Mr. Nichols noted. And central bank purchases and long-term gold buyers in Asia are reducing the available supply of the metal.

Recent data out of China shows a record amount of gold was imported, as Chinese authorities seek to diversify their financial holdings. And it is illegal to export gold out of China.

The bottom line for gold and the rest of the precious metals complex in 2012 is they are widely expected to perform very well, but volatility will remain very high. Investors should expect declines of 20% like the recent one, or even more, but the trend line will likely still be up substantially in December.

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.

By Jim Kingsland for Certified Assets Management International
A CoinWeek Content Partner

In March, 2011 I took the pro silver side of a gold/silver debate in CoinAge Magazine on which metal would outperform on a percentage basis in 2011. My positive silver ideas were empowered by the freight train momentum that developed early last year for silver that eventually shot silver to within a hair’s width of closing above $50 in late April.

Obviously, my bullish outlook was destroyed thanks to the series of margin hikes that were implemented by the Chicago Merc. I’ll say it: When the real owners of the market (various giant banks), with their massive short positions in silver were about to be shellacked, the silver bulls had to be neutered (of course they and I forgot about the possibility of not one or two margin hikes, but of many margin hikes). Yes, you could argue that slower world economic growth, even good old profit taking chilled the price of silver, but those margin hikes in and of themselves are what led to the collapse of silver from its 2011 high.

In 2011, silver fell 7 percent, while gold rose 10%. While I am no longer going to take an official bullish, or bearish stance on silver, let’s say I am waiting for the opportunity to pick up MS state generic Morgan dollars (those beautiful silver coins from the late 1800′s to the early 20th century) in the $25 range. The coins should either be certified by PCGS, or NGC and encased in plastic holders. You can do the math, but I will do it for you. Since there is a slight premium for Morgans to the spot silver price, at the present $27.78 spot price, to get my $25 buy price on Morgans will require action that my bullish friends won’t enjoy. This bottoming process could take some time to play out, but who knows.

My thought is to have nothing to do with silver futures, or SLV and pick up the real thing on further dips as some very cheap insurance, not as a way to game a new silver bull market, but has a hedge. Forget about the silver to gold ratio for now. Yes, it’s out of whack historically, but then again this isn’t a late 19th century bi-metallist society that we’re living in. We are living in a deranged system where everything, including these metals, are priced in the ever vanishing power of the paper dollar (which is masked by what everyone focuses too much attention on – that dollar index). Forget about the kook internet reports of physical silver being priced well above the spot paper price. Little old me as a coin dealer can still get silver for about $1 over spot and lots of it, not just a few ounces.

The rumors of a physical shortage of silver is a sales tactic aimed at getting ignorant people to pay a big premium to the hucksters. Forget about all of the claims that silver will become so rare soon that it will be rarer than gold. That one leaves me speechless. The tall tales are fun, but none, NONE have kept silver out of an ongoing downward trend. The best apologists for silver in the business have been largely ineffective. For now, the silver market is muddled and will remain so, so long as the CME and its margin hikes remain. Funny that they haven’t since removed the hikes, now that things have calmed down. But I digress.

Insurance to offset the collapsing paper ponzi system – now that’s not so crazy. We buy insurance for all sorts of potential negative events. I believe that one day silver will become far more valuable than it is now, but let’s not be so anxious for that to happen. When this dog called silver eventually has its day, there will be many other things to be worrying about (eg. securing supplies of food, etc). Silver, and gold for that matter, should be accumulated by people who have an understanding about the monumental shift that’s taking place. What would that be? The coming end to fiat paper, back to hard money. This has happened before in society. It is unlikely to be pleasant. There are many who have admitted to me that they want nothing to do with silver, or gold – that they have faith in the present system. I am fine with that, though they register in my mind as the sitting ducks class. Lol.

By Mark Ferguson for CoinWeek – MFRareCoins.com

There have been three major trends driving the coin market during 2011 that are continuing to influence the market into 2012. All three of these trends are economically driven.

The most influential of these trends has its roots deep within the global economy. It’s the global debt bubble. Here in America that debt load reaches from individuals to municipalities, county governments, state governments, and finally the Federal government. And sovereign debt, as we all know, is in crisis mode around the globe.

As a result, gold has been a hot commodity throughout 2011 and during prior years. Many financial professionals even refer to gold as a currency. Silver has also been considered a financial metal, in addition to its industrial utility, and routinely follows the market trend on the heels of gold. Although, we’ve seen some divergence in the short-term market trends between these two metals as the gold market has reacted to economic crises, especially as its price has climbed during 2011, as shown in the charts below. This divergence is illustrated as the gold price was driven to comparatively loftier levels than the silver price during the July to August period when Congress found itself in a stalemate over raising the debt limit.

Gold began 2011 at a closing price on the London exchange on January 4 at $1,388 and ended up the 2011 year at a closing price of $1,531 on December 29. In the interim it reached a closing price of $1,895 on two consecutive days, September 5 and 6, after breaking through the $1,900 benchmark in intraday trading. The low price for gold during 2011 was a closing price of $1,319 on the London exchange on January 28.

Silver started 2011 at a London closing price of $30.67 on January 4 and ended up at a closing price of $28.18 on December 30. During the interim in 2011 silver reached a high closing price on the London exchange of $48.70 on April 28, after coming within cents of its all-time high price earlier in the day. The 2011 low was $26.16 on December 29. The silver price showed strength from mid-July to mid-September by remaining in the low $40s during that time, while the gold price continued to advance to its all-time high of around $1,900.

But those are just short-term trends. Below are charts of the gold and silver prices from January, 2000 to the present. Clearly, these two metals are in a long-term price trend that’s rising. You can see how silver prices are traditionally more volatile than gold prices. Of course, when investing in these metals, it’s difficult, if not impossible, to pick the short-term highs and lows at which to buy and sell. I urge my customers to go with the long-term trend. Don’t buck the trend. Don’t try to outguess the market. Dollar cost averaging, by purchasing at various price levels over a period of time, is often used by some of my customers to even out their costs when buying.

So, what does all this mean to the coin business? It has meant much more business for coin dealers, but higher prices for collectors who collect common date coins that are heavily influenced by gold and silver prices. On the other hand, many collectors have used these price advances as opportunities to cull out some of their common gold and silver coins and use the proceeds to purchase more expensive collector coins they’ve always wanted, but couldn’t afford.

The higher prices have also brought out into the market lots of accumulations of coins the general public has had stashed away for decades. And along with the gold and silver coins the public has sold to coin dealers have been coins of better date “collector coins.” Some better date silver coins have gone into the melting pot, as their collector values have been exceeded by their silver values. But a lot of these kinds of coins have wound up in coin dealers’ inventories.

And this illustrates another major trend in the coin hobby. Except for some die-hard collectors who have solid jobs, middle class collectors have been largely cut out of the collecting market. Job losses, debt reductions, and general caution over spending have curtailed their coin collecting activities, and some established collectors have had to become coin sellers, instead of coin buyers, for the same reasons. This trend has resulted in soft prices and lower sales for many collector coins regularly purchased by the middle class – which is the majority of people.

So if it wasn’t for all the increased business in the precious metals area, many coin dealers probably would have been forced to close up shop during the past two or three years. Instead, most dealers have had very good years in business during that time.

However, on the high end of the coin market, business has been brisk in selected areas. Investors looking for alternatives to main stream investment vehicles have been buying high end rare coins, including “trophy rarities,” in which to park some of their money.

A great example of this is the 1787 Brasher Doubloon, with the “EB” punch on the eagle’s breast, which sold for $7.395 million at the end of 2011. This is now the third rare coin that has sold for more than $7 million. The first was back in 2002 when a famous 1933 $20 Saint Gaudens gold coin sold for $7.59 million. It’s the only example of this coin issue that the U.S. government has legally allowed to be privately owned. The third coin ever to sell for more than $7 million was a 1794 silver dollar, believed by some numismatic researchers to have been the first silver dollar struck at the U.S. Mint. It brought $7.85 million during spring, 2010.

Of these three sales, the recent Brasher Doubloon sale has best demonstrated how much great American numismatic rarities have appreciated in price during the past several years. I’ve been writing regular major market reports about the U.S. coin market for the past decade or more, for several publications, and in doing so I’ve observed these transactions and have knowledge about the backgrounds of some of these coins and have talked to some of the principals involved. I know most of them well and do business with them. This Brasher Doubloon, one of just two pieces known, but also unique in its own right, is one of the most important coins in American numismatics, and for that matter, is also one of the most important coins in world numismatics.

Of the other two coins mentioned above, the 1933 $20 Saint Gaudens coin came from Europe when it surfaced, just a few years before its famous 2002 public auction sale in which the U.S. government participated – an interesting story to search for if you’re not familiar with it. These 1933 $20 gold coins were illegal for Americans to own and some numismatists believe this 1933 $20 is the famous King Farouk specimen, sold during the 1940s. Previously, it could not have been sold publicly, as it was in 2002, because of the risk of confiscation by the U.S. government, until it became the only example of this coin issue to be declared legal to own. So a previous price was never established in which to compare the 2002 sale.

Similarly, the 1794 silver dollar mentioned above was thoroughly researched by the seller and is believed to be the first silver dollar ever struck at the U.S. Mint. It was given the status and grade of “Specimen-66” by PCGS, and previous to its sale, it was extensively exhibited by the owner who has referred to this coin as a national treasure. Reportedly, the seller purchased it several years before the 2010 sale for “millions of dollars,” but its status had been elevated during the time he owned it, making it difficult to compare its price appreciation with the coin’s previous status.

So, the recent sale of the Brasher Doubloon for a reported $7.395 million, with the Ephraim Brasher “EB” punch on the breast, as compared to the other example which has the punch on the wing, is most important in illustrating the trend of the market for trophy rarities because it is a coin that has been known for years and has been exhaustively researched. It has not had a change in status like the other two important coins mentioned above have had. This doubloon was last sold at public auction during January, 2005 for $2,990,000…and now for $7.395 million in a private transaction.

So what are the people who invest such large sums of money expecting when they buy these trophy rarities? First, such buyers aren’t just freely throwing their money around, like the proverbial rice after a wedding ceremony. Negotiations for such rarities are usually well thought out, and sometimes tricky. Secondly, buyers expect these coins to at least hold their values, but hopefully to appreciate. They are looking for investments that are alternatives to risky mainstream investments, and these buyers are often expecting economic inflation during the next several years. And thirdly, another consideration taken into account is the vast price differential between these high end numismatic rarities and record-selling works of fine art, which are now bringing more than $100,000,000 on the high end.

While the coin market probably won’t see those nine figure price levels anytime soon, the reasoning is…there’s huge potential for the price of famous American numismatic rarities to close the gap with fine art, even by a comparatively small margin. Therefore, is it possible that some of the great American numismatic rarities could become worth $25 million or more, for example? Absolutely!

by Louis Golino for CoinWeek

I believe the following 2011 U.S. Mint coins offer the solid long-term potential for price appreciation based on supply and demand factors and secondary market trends of modern issues.

Higher future precious metal prices will provide additional value appreciation for these coins.

These coins are all still available from the Mint, or from coin and bullion dealers, and do not include the 2011 commemorative issues.

The commemorative issues were removed from sale two weeks ago, and already several have emerged as new modern commemorative coin keys. These include the Army half dollar in uncirculated and proof, which are new keys, and the proof $5 gold Army and Medal of Honor coins, which are the first and second lowest mintage in their series. The uncirculated $5 gold coins are the third and fourth lowest mintage coins in their series.

Some of these coins are already seeing substantial price appreciation. The uncirculated half dollar that was available for a little over $20 last month is now bringing $150 and more for MS69 examples.

Keep in mind that the track record for modern Mint coins is mixed. A lot of coins, especially commemorative issues, are cheaper now than they were when released, if one accounts for the change in metal prices.

In fact, much of the price appreciation for modern Mint issues has come solely from increased precious metal values. But there are some lower mintage coins, which carry a premium that substantially exceeds metal value. The trick is identifying those coins well before they reach their value potential.

In 2011 collectors of modern U.S. Mint products were given a wider array of product offerings, especially of precious metal coins, than in any other year, as far as I know. Coin World estimated that it would cost about $25,000 to purchase one of each of last year’s releases. This made it harder for collectors to decide which coins to purchase.

At the same time, for most of the year, silver and gold prices were high, which made many precious metal-based coins that are offered every year more expensive than they were in any previous year. This made it harder to afford last year’s coins and forced most collectors to be more selective, or to skip certain releases.

As a result, sales of some 2011 coins have lagged substantially behind those of previous years when coins were cheaper and not as many different items were available in one year.

This has opened up the possibility of some low mintage coins which can become modern keys.

2008 and 2011

Today’s collectors are better informed than earlier collectors. But some coins still slip under the radar. The 2011 Mint program had the most such coins since 2008.

In 2008, like last year, the Mint issued a lot of different coins and sets, and many of those have since become key coins, including the six fractional burnished and proof American Gold Eagles (except the $25 burnished where the 2007 coin in king); six fractional burnished and proof American Platinum Eagles; and the six fractional burnished and proof Buffalo gold coins. For more see this earlier article: http://www.coinweek.com/news/featured-news/the-coin-analyst-focusing-on-modern-key-coins/
Those 18 fractional coins make a nice set. Because the Mint does not plan to issue any more factional precious metal coins, these coins are likely to remain the keys in their series and should be good long-term bets.

The 2011 coins listed below are those which are still available at issue price which current sales trends suggest are the most likely to become keys, or second lowest mintage coins, in their respective series.

Chickasaw America the Beautiful bullion coin

This coin in bullion form is not sold directly by the Mint but is released through the Mint’s network of authorized purchasers like other bullion products. I think this one slipped under the radar for many collectors, perhaps because it does not appear to be widely known that as of early December, fewer than 25,000 of these coins were purchased by Authorized Purchasers. The AP’s can continue selling the coins this year, but the Mint can not strike any more coins, or sell any more to the AP’s.

This means that the Chickasaw bullion ATB will have the lowest mintage of any bullion or numismatic release in this series, even though it can still be purchased at the same or lower premium than a bullion American Silver Eagle, of which the Mint sold more than 40 million last year.

Given decreasing interest in this series, it is possible a future coin will have a lower mintage, or even that either the bullion or numismatic series could be discontinued. But at a bullion price and with silver at bargain levels under $30, I see little risk in picking up one or more of these and seeing what happens. If nothing else, future silver prices are almost certain to be higher.

The numismatic version of this coin, with a special vapor-blasted, satiny finish, will be released on February 9, and Vicksburg Mint release is slated for January 12. The Mint recently lowered the price of these coins to $205.

One ounce burnished American Gold Eagle

It is hard to say at this point whether the Mint will continue offering this coin in the future, and what future mintage levels will be, especially if rising gold prices force more collectors to skip this issue in future years. It is also hard to say what the final mintage levels will be for the 2011 coin.

But based on current data, this coin has excellent potential if it remains under 10,000. The latest sales figure is 8,495, and I suspect the majority of people interested in it already purchased the coin. In addition, lower gold prices make the current price attractive.

So far the lowest mintage once ounce coin is the 2008 issue with 11,908, and the lowest of any burnished denomination is the 2008 quarter ounce, with 8,883 units sold. The 2011 ounce coin
is likely to come in as the key to the ounce burnished series, and the second lowest of all burnished gold eagles.

Buffalo proof gold

The 2008 Buffalo gold coin in uncirculated and proof condition are the keys to the series and are the only coins that so far carry a substantial premium. Sales levels for the proof coin have declined substantially in recent years, perhaps because rising gold prices made the coins too expensive for many people.

So far the Mint has sold 22,805 of these coins, which is a lot less than any other year except the 2008 coin, which is the key with 18,863. While the 2008 releases seem likely to remain the keys, the 2011 coin has good future potential. The second lowest proof ounce is the 2010 coin, which sold 49,236. The final 2011 figures should be at least 20,000 less than the 2010 coin.

The Mint is still selling these coins, but it could discontinue sales at any time. There is no authorized maximum mintage, and we have no idea how many of these coins have already been made. Sales levels for last year’s coin have tapered off in recent months, which is not surprising since that coincides with the period when gold hit new all-time highs. With current gold prices in the $1600 range, these coins are price attractively at $1860.

Check soon for my recommendations for 2011-12 world coins.
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.

By Doug Winter – Raregoldcoins.com
A CoinWeek Content Partner

A popular feature of the www.raregoldcoins.com blog is the “what’s hot and what’s not” article that I write at the end of every year. As its the very end of what’s been an interesting and active year, let’s take a look at what was in demand in 2011 and what you, literally, couldn’t give away. We’ll look at a number of areas in the market and determine a “heat index” based on my personal experience in the 2011 coin market.

1. Gold Dollars

This was a mixed market area but overall it was fairly strong and in some cases it was very strong. The segments of the gold dollar market that were strongest were superb, one-of-a-kind Type One and Type Three issues (especially “wonder coins” graded MS68 and MS69) and very high quality Dahlonega issues (especially better dates such as the 1855-D, 1856-D, 1860-D and 1861-D). Areas that remained flat or trended downwards in 2011 include mid-level Uncirculated New Orleans pieces and San Francisco issues. The weakest segments of the gold dollar market included Gem common date Type Two issues and MS65 through MS67 common dates from the 1880′s.

2. Quarter Eagles

Early quarter eagles were a strong area in the market. This was especially true for attractive, original coins in the EF40 to MS63 range that were priced at $50,000 and below. A few nice 1796 No Stars quarter eagles sold in 2011 and these generally saw prices that were higher than in the previous couple of years. Early quarter eagles priced at $100,000 and up remained hard to sell, unless they were either very rare or very nice or, ideally, a combination of the two.

The Liberty Head series saw mixed results in 2011. Nice circulated Dahlonega pieces were good sellers and even Charlotte coins, at least those in the $2,000-5,000 range, sold well if they possessed good eye appeal. The very high end of the market was strong. Ultra rare issues such as the 1841, 1854-S and 1863 all saw strong price increases in 2011. The surprise “trendy date” of the year was the 1864 which, in a short period of time, saw explosive price growth as collectors realized how rare it was.

Most quarter eagles dated 1870 and later remained hard to sell, even those with low mintages. There were a few exceptions (the low mintage 1875 became popular in 2011) but this seems like an area in the market that offers good growth potential for collectors with a budget of $1,000-5,000 per coin.

2. Three Dollars

After a rough patch of five or so years, the Three Dollar market showed more strength than I can remember. Buyers were fussy and coins that were not high end were hard to sell. The most popular dates included the 1854-D, 1855-S, 1861-1864 and the low mintage issues from the 1880′s. Dates that were hard to sell included the 1854-O, 1865 and 1877. The rare Proof-only 1875 was a good seller while the not-as-rare Proof 1876 was harder to sell.

Prices on better dates in MS63 to MS65 have dropped to levels that make them prime for a promotion in the coming years. There are enough nice to very nice coins available (not factoring in common issues such as the 1854, 1874, 1878 and 1889) that I would not be surprised to see prices for nice coins rise.

4. Half Eagles.

The market for early half eagles was very quality conscious in 2011. As an example, a common date early five such as an 1803/2 in AU55 to AU58 was worth 5-10% more if it were CAC-quality as opposed to the typical washed-out, unappealing example. The grade range that really began to see price separation due to quality was MS63 to MS64. There are early half eagles in MS63 holders that are hard to sell at $25,000; the exact same issue in the same grade with a CAC sticker and real eye appeal can be an easy sale at $30,000+.

The market for very rare early half eagles was hard to gauge in 2011 due to so few pieces trading. But in the Heritage 2012 FUN sale there is a superb date run of rare half eagles including an 1819, 1821, 1825/1, 1826, 1828, 1828/7 and both varieties of 1829. I expect these coins to bring record prices and the “heat” that they generate is likely to spread to the rare but more more obtainable dates of this era.

The Liberty Head half eagle market was generally good in 2011. The areas that were strongest include collector quality Dahlonega pieces, rare Civil War dates and high quality New Orleans issues. Areas that began to show some tentative strength included No Motto Philadelphia issues in AU and Mint State grades and rare but formerly unpopular low-mintage dates from the 1860′s and 1870′s. The market for Carson City half eagles in 2011 was mixed. There were not many nice coins on the market and the better dates that did sell only brought solid prices if they were very choice.

5. Eagles

While not everyone realizes this, eagles were probably the strongest denomination in the gold coin market in 2011. Nearly all areas were as stronger or stronger than in 2010 with the exception of early eagles (1795-1804) which remained off their market highs of a few years ago. But this statement needs to be clarified. Most of the early eagles that are offered for sale are very low end for the grade. Nice early eagles sell for 10-20% premiums over their low-end counterparts.

The Liberty Head eagle series came into its own in 2009 and since then, prices have been strong for choice examples of rare and low mintage dates. In my opinion, prices of rare, low mintages issues such as the 1863, 1864, 1865, 1872, 1873, 1876 and 1877 are still very low in comparison to less rare but more popular double eagles from this era.

The Carson City eagle market was similar to that described above for the half eagles. If a coin was choice and rare, it sold for a strong price. If it were just so-so, the price ranged from decent to slightly above average. But if a real “pig” was offered (and some of the CC eagles in holders are grossly overgraded) it might bring a distortingly low price. Collectors are urged to work closely with an informed specialist and to learn how to distinguish a choice, original piece from an overgraded low-end example.

6. Double Eagles

For the last five years, the Liberty Head double eagle market has seen an inexorable march upwards in price. In the second half of 2011, this area of the market seemed to weaken a bit, probably due as much to the steep rise in bullion prices as a natural correction.

The always-popular Type One market softened a bit but remained strong. CAC approved coins brought good premiums, especially for issues like the rarer New Orleans mint coins where eye appeal was a real concern. Premiums for rare shipwreck coins remained very strong in 2011. If an S.S. Central America, Brother Jonathan or S.S. Republic coin that had a population of just a few coins was available at auction it brought many multiples of a non-shipwreck coin’s price.

The Type Two market was a bit stronger than in the last past few years. The market for common dates in MS62 through MS64 dropped rather significantly but scarcer dates (such as the 1868, 1869, 1870 and 1871) rose in AU and Uncirculated.

The bullion-related Type Three issues and the condition rarity market declined in 2011 but the market for truly rare issues (1881-1886 and 1891 Philadelphia) was strong.

7. Proof Gold

This was a strong area of the market in 2011 and part of the reason was a greater supply of choice coins than in recent memory. Strong prices were seen at the Heritage 2011 FUN sale where the Henry Miller collection, which contained dozens of superb rare date Proofs, brought very strong prices. Coins that were in demand include very low mintage issues and virtually all pre-1880 half eagles, eagles and, especially double eagles.

8. 20th Century Gold

The various 20th century series saw a mixed year in 2011. Common date generic issues saw significant shrinking in premiums over spot and in some series, coins were trading for tiny premiums.

A series that was stagnant in 2011 but which is primed for attention is the St. Gaudens double eagle. The upcoming sale of the Dr. Steve Duckor collection, to be sold by Heritage next week in their FUN auction, includes many very choice, very rare issues which are likely to bring record prices. This may not necessarily impact lower quality examples of these dates but it will clearly bring a lot of attention to a series that has been flat since the Morse Collection sale of 2005.

A series that seemed to be quietly attracting collector and investor attention in 2011 was the Indian Head eagle. I only handled a few interesting Indian Head eagles in 2011 but the coins I did own sold quickly and generally to smart dealers.

All in all, I look at 2011 as being a good year for the rare gold coin market. Not a great year but certainly a stronger one than 2009 or 2010. It was a year that rarity and originality became more in vogue. It was a year that soaring bullion prices were a big story during the first three-quarters. My firm DWN had an excellent year in 2011 and I am personally excited about the coming year and what it will bring.