By Patrick A. Heller – Liberty Coin Service
Commentary on Precious Metals Prepared for CoinWeek.com

Even though gold and silver prices are up significantly since the beginning of 2012, that doesn’t necessarily mean that this trend will continue. Buyers and sellers modify their decisions as prices change.

When you look at who is and who isn’t actively buying or selling gold and silver right now, that can give you significant clues as to where prices head in the near term.

Ever since the price of gold surpassed $1,000 for the first time in 2008, there has been significant liquidation and recycling of “scrap” gold such as jewelry and industrial products. In many instances, people who lost jobs or experienced other financial setbacks have sold assets to generate cash flow. Investment demand in the past three years has been so strong that prices continued to rise despite the increase in recycling supplies. From now into the future, however, the amount of scrap gold that could be liquidated will be smaller than it would have been because of all the gold already recycled.

The story is similar for silver. During the 1979-1980 precious metals boom, many companies acquired equipment to recycle metals. Even though prices later fell so low that it was no longer economical to acquire such equipment, it was still profitable to continue to use existing machines since the acquisition costs had already been paid. As a result, silver recycling continued at a steady pace even when prices were far lower during the past few decades.

Therefore, there is less silver available for recycling today and in the future than there would have been. Another factor to consider is that the use of silver in photography (including x-rays) has fallen sharply in the past decade or so. This is significant because a high percentage of silver used in photography is recycled. As the amount of silver used in photography has fallen, so has the amount of silver that could be recycled.

With higher prices, there would be a strong incentive for mining companies to expand production. However, it’s not quite that simple. From discovery of a mine site until full production used to take an average of about three years. With increasing environmental and other regulations, it now takes an average of about ten years to go into full scale operation.

Increasing regulations have also impacted the ability of existing mines to operate. In January, the government shut down operations at the Lucky Friday mine in Idaho, producer of about 0.5% of the world’s newly mined silver supply. Even though the mine had passed twice-a-year federal safety inspections, it was closed because of alleged problems with its state of the art mine shaft supports. The owner of the mine stated that it will take a full year to fix the alleged safety issues before the mine can resume operation.

Overall, silver mine output has been rising over the years even as global gold mine output mostly declined. Still, silver supply is just not increasing enough to match the rise in demand.

For decades, the central banks were net sellers of gold every year. That changed a couple of years ago to central banks now being net buyers of gold. The swing from being a net supplier to a net buyer has affected the supply/demand equation by about 40 million ounces a year. This is a huge impact when you consider that worldwide annual mine output may be only 70 million ounces.

Above ground inventories of physical gold and silver have dwindled over the past few decades, with supplies of both metals becoming tighter every year. Last year I received several reports of would-be buyers of multi-million dollar amounts of physical gold or silver who wanted to take immediate delivery but were unable to find sellers willing to accept their orders.

While the supply side of gold and silver is constrained, I think the largest impact on the prices of both will come from a surge in buying demand. Even though there has been an increase in demand for the two metals for industrial and investment purposes, the market has not yet experienced a sustained rush to buy physical gold and silver.

For instance, when gold and silver prices fell sharply in late 2008, there were significant delays in purchasing almost every form of bullion-priced physical gold and silver. At the most extreme, new orders for 1 ounce size silver rounds and ingots were taking three months for delivery after the buyers had paid for them. Today, in the US almost every bullion coin and bar is available for live or short term delivery. Premiums are close to as low as they have been over the past couple of years.

The recent weekly Commitment of Traders Report issued by the COMEX show that speculators have not jumped into the market. This means that the price increases have occurred without this source of demand.

China and India are the world’s two largest nations for consumption of gold and silver. What happens in those countries has a major impact on prices.

The Chinese government has been very aggressive at purchasing physical gold and silver for itself and also encouraging its citizens to accumulate precious metals. It is expanding the venues which would make it convenient for people to acquire gold and silver. There are regular stories of Chinese citizens who are unable to purchase physical precious metals because the stores are out of stock or have lines so long that it takes (literally) several hours to get service.

Demand in India is very sensitive to price. When prices fall, demand soars. When prices rise, demand tapers off until there is a sense that the market has established a base from which prices will resume climbing. Right now, buyers in India are mostly sitting on the sidelines since the price of gold broke above $1,700. So, prices rose in the second half of January without extra demand from this nation.

In Europe and the Middle East, there is strong demand for physical gold and, to a lesser extent, silver as safe havens from deteriorating currency values. Demand was especially strong in North America in March and April 2011, but is now lackluster.

Although there have been some investment funds taking positions in gold or silver, this activity has been on a minor scale.

Perhaps the most significant indicator that the rush to buy gold and silver has not started in earnest is the relatively minor importance that the two metals have in world finances. There were times in the first half of the 20^th century where the value of gold and silver mining shares and all the circulating gold and silver coins made up more than 20% of global wealth. Today that proportion of worldwide wealth is about 0.5%.

By the way, perhaps a significant indicator of where prices are headed in the near future is a decision by Endeavor Silver to inventory part of its newly mined silver output rather than sell it at current prices. I have heard that other mining companies are discussing this option, where they might only sell enough metal to fund continuing operations. It is highly unusual for mines to choose to defer cash flow in anticipation of much higher prices in the coming months.

The real rush to buy gold and silver will not be underway until there is strong demand from China and India, elsewhere in the Far East, the Middle East, Europe, and across North America. You will also see central banks and investment funds purchasing greater quantities of physical gold and perhaps silver. When fabricators and wholesalers are unable to meet demand for physical metal, prices could skyrocket. We are a long way from this position today. But it is coming and will be here surprisingly soon.

Patrick A. Heller owns Liberty Coin Service and Premier Coins & Collectibles in Lansing, Michigan and writes Liberty’s Outlook, a monthly newsletter on rare coins and precious metals subjects. Past newsletter issues can be viewed at http://www.libertycoinservice.com. Other commentaries are available at Numismaster (http://www.numismaster.com under “News & Articles). His award-winning radio show “Things You ‘Know’ That Just Aren’t So, And Important News You Need To Know” can be heard at 8:45 AM Wednesday and Friday mornings on 1320-AM WILS in Lansing (which streams live and becomes part of the audio and text archives posted at http://www.1320wils.com.

by Louis Golino for CoinWeek

For the first time since the early 1980′s gold and a possible return to the gold standard have emerged as issues in American politics.

One GOP presidential candidate, Ron Paul, has made it a centerpiece of his campaign; another, Newt Gingrich is interested in exploring the idea; a third, Mitt Romney, opposes the idea as inflationary; and Rick Santorum also supports returning to the gold standard.

1981 gold commission

During the presidency of Ronald Reagan, a gold commission was created in 1981 that included Lewis Lehrman, a longtime advocate of returning to the gold standard.

The 1981 commission was marked by strong disagreement among its members on the idea of once again linking our currency to gold. The idea basically went nowhere, and in the view of many gold proponents it was just a sop to the gold bugs.

Mr. Lehrman was one of only two members of the seventeen-member commission who actually backed the idea of a new gold standard. He helped write the minority report of the commission, The Case for Gold, that was published in 1982. He frequently makes the case for a gold standard in interviews and articles.

Last year he published a book called The True Gold Standard that explains how to go about implementing it. He also has a web site, www.thegoldstandardnow.org, which is a project of the Lehrman Institute.

The gold standard started in 1853, became official in 1900, and ended in 1971, when another Republican president, Richard Nixon, ended the convertibility of the dollar into gold.

The gold standard was replaced with a system of floating, paper-based, or fiat, currencies that many conservative economists have argued over the years is at the root of inflationary pressures.

Price inflation was almost non-existent when the U.S. was on the gold standard, but the amount of gold that was pegged to the dollar has changed numerous times in U.S. history. For example, as Alan Herbert explained recently in Numismatic News, in 1792 a dollar was worth 1.604 grams of gold, but by 1971 it was only half that amount (0.8016 grams).

2012 GOP race

Of the candidates still in the 2012 GOP primary race, four have raised or been asked about the gold issue, and several of those who dropped out earlier also support the gold standard. Only Mitt Romney opposes the idea.

Rep. Ron Paul (TX) strongly endorses the idea of returning to a gold standard. Congressman Paul is widely known a gold bug and a supporter of backing the dollar with gold because it is the only sound form of money in his view.

He is also a former coin dealer, and his personal portfolio, as revealed last year in Barron’s, includes major investments in gold company stocks.

Last year he held a hearing on this issue in his position as chairman of the monetary policy subcommittee of the House Financial Services Committee.

Rep. Paul was also a member of Reagan’s 1981 gold commission, and he was the other commission member besides Mr. Lehrman who supported a new gold standard. He also favors abolishing the Federal Reserve.

Newt Gingrich, the former House speaker from GA, has expressed an interest in exploring the idea and has also backed a proposal to form a new gold commission that would evaluate the feasibility of returning to a gold-backed dollar.

During a January policy forum, Mr. Gingrich called for a return to hard money and said “Part of our approach ought to be to reestablish something Ronald Reagan did in 1981 and that is to have a Commission on Gold to look at the concept of how to get back to hard money.”

He also said he thinks the Federal Reserve’s mandate should be limited to maintaining the stability of the dollar.

Mitt Romney, former governor of MA, was asked about the idea in a recent interview with CNBC’s Larry Kudlow, who is a proponent of a strong dollar that he calls King Dollar. Mr. Kudlow often comes across as a sceptic about gold’s bull run in his CNBC appearances. He served in the Reagan administration.

Gov. Romney, whose front runner status in the GOP primary race is under siege by Speaker Gingrich, gave the following response to Mr. Kudlow when asked on January 25 about Gingrich’s proposal: “I know that in the past when we had a gold standard, the idea that somehow it was detached from or free from any interference by Congress was simply wrong because even with the gold standard someone has to decide what is the conversion rate between the gold and the dollar.”

He added that “And Congress can inflate the dollar simply by changing the exchange rate, as was done in the past. So I don’t think there’s any, if you will, magic bullet substitute for economic restraint, for not spending more money than you take in, for having the nation that’s the most productive in the entire world.”

Former Sen. Rick Santorum of PA also supports the idea. Last June he participated, along with some of the candidates who are no longer in the race, in a tea-party bus tour that was focused on support for returning to the gold standard.

A new gold standard?

It has been estimated that based on current U.S. gold reserves a price of $10,000 per ounce would be required to return to a gold-backed dollar. Others have put the figure as high as $45,000.

Many mainstream economists say such a system would be totally unfeasible because there simply is not enough gold in the world to make it workable. That may well be true, but it goes back to the idea of the amount of gold that would be linked to a dollar, which would not be permanently fixed.

But if that were the case, a new gold-backed currency might face many of the same problems the current dollar faces, especially devaluation, or reflation, through increases in the money supply.

A more widely accepted idea is the notion that the U.S. dollar, which is currently the world’s global reserve currency, will before long be replaced by a new system that would include a number of different currencies as well as gold.

Finally, any discussion of a new gold standard raises the issue of possible confiscation of privately owned gold.

I personally do not believe it is likely that we will see another U.S. government effort at confiscation in part because the wealthiest Americans are believed to store a lot of their gold offshore in locations like the Perth Mint of Western Australia and other locations that provide secure storage.

It would be very difficult for this and other reasons to achieve anywhere near the compliance level that was achieved when President Franklin Roosevelt declared it illegal for Americans to own all but a limited amount of gold in 1933. He did so to expand the money supply during the Great Depression.

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 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 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.

by Louis Golino for CoinWeek

This is the second part of my year-end review and outlook for the coming year. The first part addressed the numismatic market. This one covers precious metals.

Bullion market

2011 has been a roller coaster of a year for precious metals. This article only addresses gold and silver, but it is also worth keeping an eye on platinum, which I believe is undervalued at today’s $1400 level.

Silver came very close to reaching its 1980 price of $50 per ounce in late April, but has declined 40% to $29 since then.

Gold hit an all-time high of $1920 on September 6*, but since then its price has usually been in the $1600-1700 range, and many analysts believe even lower prices are coming.

As of now, for the year gold is up 12%, while silver is down about 5%, and equities are basically flat for the year. Despite all the sound and fury about gold being a bubble that has burst, it continues to be the best-performing asset class, as it has for the past decade.

A lot of the recent price decline in gold is due to dollar strengthening, as investors seek the perceived safety of U.S. Treasuries at a time when the European crisis seems to loom larger every day. To help put things in perspective, in euros the price of gold is only 100 euros off its all time nominal high reached in September (1300 to 1200).

For the year that is finishing, the key questions in the precious metals realm are: Why did gold decline sharply after hitting its all-time high in August? Second, why is gold apparently no longer viewed by many investors as a safe haven asset? For silver, why did it fail to surpass $50 this past spring and decline by 40% since then?

Looking foward, for the coming year, the main questions are: Where is gold’s price headed? Is it moving towards $1500 or less as the bears predict, or will it reach new highs in 2012? And will silver continue to hover where it is now, or even decline to $20, especially if the economic recovery falters? Or will it hit new high well above $50, as silver bulls predict?

A series of macro-economic factors will help shape precious metal markets in 2012, including: the European debt and banking crisis and the possibility of European quantitative easing, what happens to the U.S. economy, the value of the dollar; and prospects for further quantitative easing in the U.S. Each of these factors is intertwined with the others.

Gold

Some analysts have begun to speculate that either the European Central Bank, or the Italian government, might liquidate some its gold to raise funds to increase liquidity, especially if the bond vigilantes continue to try to raise the cost of borrowing for Italy to unsustainable levels (over 7%). Italy will need to refinance many billions in government debt in 2012.

Italy currently has the fourth largest gold reserves in the world.

While I would not rule out the possibility of Italy selling some of its gold, I believe it is more likely that we will see increased buying of gold by central banks for asset diversification.

China, despite all the headlines indicating it is buying and mining precious metals as fast as it can, continues to hold all but 2% of its foreign reserves in dollars, as noted recently by Brent Arends in http://www.marketwatch.com. If the world continues to lose faith in the long-term prospects for the dollar, China is virtually certain to shift more its foreign reserves into gold.

A senior Chinese central bank official made just this recommendation the day after Christmas. That would be a major market mover for the price of gold.

Other countries’ central banks, including those in India, Russia, and Malaysia, have added to their gold holdings this year.

In 2012 the ongoing European debt and banking crisis is likely to put pressure on the price of gold, which may seem counter-intuitive. But as I explained in the fall, gold’s role is changing.

What has changed in gold this year is that it is now seen as a risk asset, like equities, rather than a safe haven to flock to when riskier assets are down.

But the long-term fundamentals, most analysts agree, remain very bullish, especially since governments around the world lack effective tools for dealing with the economic crisis and are likely to continue using the main tool left: currency devaluation, which reduces the value of a country’s debt, but also raises the prospects for future inflation.

Moreover, supplies continue to be constrained by the cost and difficulty of finding new deposits, and demand is strong, especially in Asia.

In the short-term, European economic troubles could result in more selling pressure on gold, but 2012 is expected to be (finally) the year of reckoning for Europe. The European Central Bank is likely to be forced to print money (quantitative easing) to monetize the debt of European countries, and this should eventually push gold over $2,000.

Silver

For silver, a different set of dynamics will play out.

Continued economic slowdown would clearly put a damper on silver prices, but silver is a hybrid metal, both industrial and precious. If the gold market reaches new and sustained highs, it is likely to bring silver along with it.

A major wild card is possible resolution of what Kitco has called “The Great Silver Debate.” That is a reference to the idea that silver prices are manipulated by the U.S. government working with large banks involved in the metals trade to suppress prices through techniques such as frequent margin hikes.

Silver bulls believe firmly that a day of reckoning is arriving in which the true extent of silver shortages will be revealed, but it is hard to say when that will happen.

Silver did not decline by 40% since late April because demand for it declined. In fact, demand for silver remains very strong, as seen in the record-number of American silver eagles sold this year and tight supplies at silver bullion dealers.

It is the disconnect between the physical and paper markets; repeated margin increases; and the need to cover losses in other trades that explain silver’s decline. In particular, paper silver speculators got spooked by silver’s wild ride after April, while large institutions have had to sell metals to raise capital. But long-term physical investors have continued to take advantage of low prices to add to their holdings.

According to Paul Tracy of http://www.seekingalpha.com, 25% more silver is consumed than mined every day. Even if one accounts for silver recycling, the shortage of silver in the world should eventually drive silver a lot higher, probably well over $100 per ounce.

Silver also seems very undervalued now since according to Mr. Tracy, silver is 17 times more abundant than gold, but one can buy 54 ounces of silver for an ounce of gold.

Lessons of 2011

Overall, I remain bullish on precious metals for the long-term based on the fundamentals of supply and demand. But we also were reminded in 2011 how imperfect the precious metals market is, and how much it is shaped by macro-economic factors, regulatory regimes, and the performance of other asset markets.

So it would be prudent not to assume that there will be a direct correlation between global economic turmoil and the price of gold and silver, in which investors flock to metals for safety. We have learned that things are more complicated than that.

Happy New Year to CoinWeek readers!

*In my December 23 article on the coin market, I said gold hit an all-time high of $1906 on August 22. This was based on a chart I found at Kitco, but the correct date and figure are $1920 on September 6.

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 Adrian Ash
BullionVault
Tuesday, 20 December 2011

Cheer up! This permanent state of emergency is doing a wonderful nothing to unwind the bubble…

SO 2012 will mark the fifth anniversary of the global financial crisis. There’s little reason to think it’s reached its end yet. Merry Christmas.

Banking and household leverage in the rich West has barely ticked lower from the credit bubble’s historic peak of 2007. Financial leverage has only been reduced by a fraction, while governments have been stuffed like a French goose with that new debt spurned by the private sector since 2008.

So why this slow, seemingly permanent pain? Because interest rates are still set at zero, with no uptick in sight – an emergency measure that’s now etched in stone. “There is a lot of financial stress out there,” the UK insolvency specialist Begbies Traynor moaned last week. “[But] if it wasn’t for low interest rates the number of insolvencies would have been twice what they are.” Twice as many debtors would have enjoyed a write-down, in short. But do you really think their creditors sleep any better knowing what’s keeping debtors in debt?

The gambit of low rates – first played in mid-2007 and now stuck – comes from studying the Great Depression of 80 years ago. If only the US Federal Reserve had slashed rates to zero, then today’s central bankers could have avoided the deflation of their grandparents. Low teaser rates under Alan Greenspan have thus become permanently low revolving rates under Ben Bernanke. Which is where the mechanics of this depression stands apart from the downturn of, say, 30 years ago.

Back then, central bankers imposed deflation by hiking short-term interest rates towards 20% per year. Today the credit crunch is priced into the weakest balance-sheets only, and in the interbank lending market, where liquidity has vanished again in 2011. Contrast with the early 1980s’ depression, when bond yields badly lagged policy in forcing through the deflation. Ten-year US Treasury yields, for instance, broke into double digits 10 months after the Federal Reserve’s overnight target rate breached that level. It wasn’t until 1983 that the curve reverted to normal, with 10-year bonds offering a higher rate of return than overnight credit held at the Fed.

The impact of this policy-driven deflation? A rise in the Dollar so strong – both in real purchasing and forex conversion terms – that it unwound all of gold’s plunge for non-Dollar investors.

That we’re living through deflation again today is plain, no matter how far the Fed and other central banks string it out. A deflation in credit, asset prices and economic activity. A deflation that doesn’t need shop prices to fall; it’s still “a deterioration of the monetary standard”, this one characterized by volatility as much as deleveraging, but also squeezing debtors every time the Dollar rises.

That in turn is squeezing creditors, of course, now terrified of default and writedowns but so far spared the actual pain. The worst of all possible worlds results. No new investment, because lenders won’t lend and debtors won’t borrow. No write-down or write-off of existing debt, lugging a permanent drag onto economic activity. And meantime the Dollar remains money the world over, proving last decade’s Cassandras early, wrong or just stupid.

Call me all three if you like; the last thing the world wanted pre-2007 or today is a rising Dollar. Not the US, China, Europe or anyone else. So just to screw the most people the most, that’s what we keep getting. But only in fits and starts. Which like the wonderful nothing achieved by zero interest rates, might just be the very worst we could ask.

Plenty of chart analysts and media hacks will tell you today that the price of gold just broke below its 200-day moving average. The smarter ones will add that it fell through the uptrend starting with the great deflation of Lehman’s collapse, too. But only in US Dollar terms, we note here at BullionVault.

Look at gold ex-the Dollar – as our bright orange line does above. The Dollar devaluation, forced through by Ben Bernanke cutting in line and slashing rates faster than anyone else in 2007-2008, worked such magic that non-Dollar investors are now – to date – wearing a much shallower top-and-drop pattern in gold so far.

This might matter. Because gold has outperformed all other assets (and very nearly all mutual and hedge funds too) since the eve of this crisis. Most people thank the inflationary response of central banks everywhere. A handful think gold’s rise might instead be due to bullion offering the perfect deflation escape – a route to extricating yourself from the debtor/creditor relationship underpinning the vast bulk of alternative homes for your savings.

Either way, a Dollar rally is rarely good for the gold price. And no one, least of all the Bernanke Fed, wants to allow a persistent Dollar rally on their watch either.

Adrian Ash
BullionVault

Formerly City correspondent for The Daily Reckoning in London and head of editorial at the UK’s leading financial advisory for private investors, Adrian Ash is head of research at BullionVault – winner of the Queen’s Award for Enterprise Innovation, 2009 and now backed by the World Gold Council market-development and research body – where you can buy gold today vaulted in Zurich on $3 spreads and 0.8% dealing fees.

(c) BullionVault 2011

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 Doug Winter – RareGoldCoins.com
CoinWeek Content Partner

To my way of thinking, early gold coins (i.e., those struck prior to 1834) and among the most collectible and interesting areas in all of American numismatics.

No, these coins aren’t cheap and they are, in reality, somewhat overvalued when you compare them to many mid-19th century Liberty Head issues. But there is a pride-of-ownership factor associated with owning a 200 year old gold coin that you get from nothing else.

1. An Overview

When we refer to “early gold,” this typically includes quarter eagles, half eagles and eagles produced at the Philadelphia mint from 1795 through 1834. I’d also like to include the Classic Head coinage of 1834-1838 as these pieces are more affordable and this article will then be of greater relevance as it will cover a more broad scope of collecting budgets.

The various types of early gold are as follows:

Quarter Eagle: No Stars on Obverse, 1796 only
Quarter Eagle: Capped Bust Right, 1796-1807
Quarter Eagle: Capped Bust Left, 1808 only
Quarter Eagle: Capped Head Left Large Size: 1821-1827
Quarter Eagle: Capped Head Left Reduced Size: 1829-1834
Quarter Eagle: Classic Head, 1834-1838

Half Eagle: Capped Bust Right, Small Eagle, 1795-1798
Half Eagle: Capped Bust Right, Heraldic Eagle, 1795-1807
Half Eagle: Capped Bust Left, 1807-1812
Half Eagle: Capped Head Left Large Size, 1813-1829
Half Eagle: Capped Head Left Reduced Size, 1829-1834
Half Eagle: Classic Head, 1834-1838

Eagle: Capped Bust Right, Small Eagle, 1795-1797
Eagle: Capped Bust Right, Heraldic Eagle, 1797-1804

The total number of types that most collectors pursue are fourteen. This includes six each of the quarter eagle and half eagle, and two eagles.

The rarest and most expensive of the individual types are the 1796 No Stars and 1808 quarter eagles, and the 1829-1834 Capped Head Left, Reduced Size half eagle.

For each of these three types, “entry level” coins will approach six figures and choice, significant pieces can run into the mid-six figures.

2. What to Buy to Get Started

Before you begin an early gold collection, I think its a good idea to spend $500-1,000 putting together a library of reference works.

The best book for new collectors is the Bass/Dannreuther reference that is published by Whitman. While it is oriented more towards die varieties than general collecting, it is still an extremely useful book.

I have written some good general articles on collecting early gold and these can be found in both the “articles” and “market reports” section of my website.

There are not many other books that deal specifically with early gold. The Akers books on United States gold coins are out-of-date but still of use. And the Harry Bass Research Foundation website (hbrf.org) has wonderful images of extremely choice gold coins in all three denominations, including extremely rare Proofs and specimen strikes.

One of the best sources of information for collectors of early gold are auction catalogs. Some of the sales held during the last few decades that had very strong holdings of early gold include Eliasberg (1982), Norweb, Bass, Keston, the “Apostrophe” sales, Archdiocese of Buffalo, Ed Price and many of the Heritage FUN and ANA Platinum night sessions. Do a search on the web for coin book dealers (there are a number of good ones) and ask for their help in putting together a nice group of 15-20 catalogs that are essential additions to any early gold library.

3. Deciding What to Collect

After you’ve decided to collect early gold, your next question is what direction is your collection going to take.

Basically, there are two paths that a new collector can take: collecting by type or specializing in a specific series and collecting by date. The path you take will depend on your budget.

Collecting early gold coins by date is ambitious (to say the least) due to the number of very rare coins in each of the three denomination. A date collection can be modified and made less expensive by deciding to collect only by date and not by variety. As an example, a collector working on early quarter eagles might opt to purchase only an 1804 with 14 stars on the reverse due to the fact that the 13 star variety is very rare and very expensive.

The decision to collect early gold is, of course, predicated on a collector’s budget. If the collector has a reasonably modest budget, my suggestion would be to focus on the half eagles struck between 1800 and 1812 in the Extremely Fine and About Uncirculated grade range. This is a great date run as there are no rare issues (except for varieties) and every coin will be available in the $7,500-12,500 range depending on grade.

If a collector has a healthy budget available, the possibilities are almost limitless. A high quality type set, featuring one example each of the fourteen issues listed above, would be challenging and numismatically significant.

Two sets that I have been able to work on for clients are date runs of quarter eagles from 1796 to 1834 and Capped Head Left half eagles from 1813 to 1829. These are both truly challenging. There is a tremendous amount of subtle strategizing inherent in both sets as they include many issues that might come up for sale once every three to five years. It can be hard to figure out what to pay for a very rare date whose last auction record was as much as a decade ago!

4. Where to Buy

As a collector you have two options on where to purchase your early gold coins: from a specialist dealer or at auction. As a dealer who specializes in early gold, I obviously would suggest that you buy from me, but the answer is not so cut and dry.

Early gold can be quite complex to collect. Many early gold coins have been cleaned or “doctored” and it takes an expert to determine which are nice for the grade and which are average. This is an area that a collector would be smart to deal with a specialist and he will need to do some research into who he should buy from, as there are only a handful of United States coin dealers who really know the intricacies of the early gold market.

Certain very rare early gold coins are almost never offered for sale except at auction, so the auction market is always going to be a factor for the collector. I suggest hiring a dealer and paying him a standard 5% fee for viewing and executing bids.

Be forewarned that you are never going to buy a good coin “cheaply” at auction. Auctions are best used to pursue very rare coins or very high grade coins. They may not be the best source for more run-of-the-mill pieces (and I am not saying this in a derogatory sense) which a specialist dealer will have access to at more reasonable prices.

Some auctions are great sources for early gold coins because they offer pieces with impressive pedigrees. I am an advocate of buying early gold with strong provenance when possible and, for better or worse, many such coins wind-up in auctions. I know of at least a few collectors who are as interested in early gold coins with pedigrees and they are in the coins themselves. They would consider buying a duplicate or even a triplicate of an issue they already own because it has a great pedigree.

5. CAC or non-CAC?

There are areas of the rare coin market that CAC has made strong inroads on and others where it has had little or no impact. In my opinion, early gold is an area where CAC has made a very strong impact. CAC typically rewards originality and as the vast majority of early gold coins aren’t original, CAC examples are often selling for premiums that range from 5% to 20%.

I think the early gold coins that are most impacted by CAC approval are common date pieces in higher grades. So many of the Capped Bust Right and Capped Bust Left half eagles that I see in MS63 to MS65 holders have been played-around with that I think a CAC stickered coin is an important purchase for the inexperienced collector.

I think CAC stickers are not as important on very rare early gold coins and more common issues in lower grades.

If you are looking at an early gold coin with a total population of a few dozen coins, you are not able to be as selective as with an issue which has hundreds of coins surviving. While I would never suggest buying a very rare early gold coin with problems (such as damage, signs of harsh cleaning, repairs, etc) I would (and will continue to) buy a coin like an 1804 14 star reverse quarter eagle or a half eagle from the mid-1820′s that was decent-looking but not nice enough to be approved by CAC.

I also note less of a premium being given to less expensive early gold coins with CAC approval but I wouldn’t be surprised if this changes as buyers of these coins are becoming more sophisticated and want nicer quality pieces.

6. Value Plays/Best Value Grades

Every collector wants to buy coins that are good value. Collectors of early gold are no different. There are some issues that I think are very good values. (important note: I think that any properly graded, choice early gold coin with natural surfaces is a good value but the following list are coins that are the best values).

Virtually all pre-1834 quarter eagles are rare and until a few years ago, they were priced at levels similar to the far more available half eagles of this era. This isn’t the case anymore and a nice example of a reasonably available date of the Capped Right design (such as the 1802, 1805 or 1807) is now a $15,000-20,000 coin.

Early quarter eagles that I find to be undervalued include the 1798 (the only relatively affordable 18th century issue) and the 1806/4.

I like the Capped Head Left type of 1821-1827 and find this to be the most undervalued early quarter eagle type. Survival rates tend to be low and the five issues of this design are often overlooked. My two favorite dates of this type are the 1821 and the 1826/5.

There are so many early half eagles that I feel are undervalued that instead of listing them by date and discussing them, I’m going to focus on “best value grades” instead.

For circulated coins, I like AU55 and AU58 grades. An early half eagle graded AU55 to AU58 is going to show minimal wear and have a decent amount of remaining luster. There isn’t a huge price spread between an AU50 and an AU58 common date early half eagle (the spread right now is a few thousand dollars at most) and if you are collecting half eagles by type, it makes sense to me to go for an AU55 or AU58.

In the Uncircuated grades, I tend to shy away from MS60 and MS61 coins (which are often “rubby”) and stick with MS62′s which, for the most part, are actually “new.”

For type collectors with higher budgets, a nice MS64 early half eagle typically makes more sense to me than an MS65 at multiples of the price. The last few common date early half eagles that I have sold in MS64CAC have been nicer than some of the low-end MS65 non-CAC coins that I’ve seen offered at auction.

Since there are not many early eagles, there are few coins that I regard as undervalued. Among the common dates, I actually prefer the 1799 to the 1801 or the 1803 given its 18th century origin.

7. Let’s Not Forget Classic Heads….

I mentioned at the beginning of this article that I wasn’t going to overlook the Classic Head quarter eagles and half eagles. These designs were produced from 1834 to 1838 at the Philadelphia, Charlotte and Dahlonega and New Orleans mints. The branch mint issues include the 1838-C, 1839-C, 1839-D and 1839-O quarter eagles as well as the 1838-C and 1838-D half eagles.

The great thing about Classic Head gold is its affordability. As an example, I just sold an absolutely beautiful 1834 Classic Head half eagle graded AU55 by PCGS and approved by PCGS for just a touch over $2,000. Nice examples of most of the Philadelphia quarter eagles and half eagles of this type can be obtained for $2,000-4,000. Even Uncirculated examples, at least in MS60 to MS62, are not out of the price range of most early gold collectors.

I would suggest that if you are purchasing a Classic Head gold coin for type purposes that you be extremely selective. These coins are not rare and really nice examples can be found with patience. Pay a little extra for original coins with great color and, if possible, buy a slightly better date like an 1837 quarter eagle or an 1836 half eagle for just a small premium over the common 1834.

Classic Head gold can be collected in a number of different ways. You can buy just two coins and have a complete type set, or you can buy eleven coins and have complete year sets of both denominations. The addition of the branch mint issues will add some cost to a Classic Head collection, but these issues are still affordable in the EF40 to AU50 grade range.

8. Some Final Words

Its hard to convey in 2000~ words the ins and outs of collecting early gold coins, but hopefully this article will serve as motivation to become involved in an aspect of the hobby that I find fascinating. If you have any specific questions about early gold, please feel free to contact me via email at dwn@ont.com and I will do my best to answer them.

by Stewart Huckaby for Heritage
CoinWeek Content Partner

Over the last few months, a member of one of the coin forums I participate in has been posting images of some of his Lincoln cents a couple of times a week, with a poll of possible grades, and he keeps track of the results as time goes by. This is a fascinating exercise, not so much because I like Lincolns — I appreciate them, but other series are more my style — but because it allows me the chance to practice my grading skills. I’m not going to say that I’m leading the standings, because I’m not. But then, Heritage doesn’t pay me to grade coins.

Third party grading services such as NGC and PCGS have done good business in recent years by encapsulating, authenticating, and assigning third party grades to coins. While I think they do an excellent job at this for the most part, this doesn’t mean that collectors can rely 100% on the grades printed on the slab. Not all coins assigned the same grade are equal.

CAC has come on the scene recently, and for a fee they will review the grades that the major grading services assign. If the coin is at the upper end of the grade, it gets a green sticker. If CAC thinks that the coin should grade higher than the assigned grade, it gets a gold sticker. Examples of both are illustrated here.

As collectors, it serves us to have an idea ahead of time what a coin’s grade is. Does the coin have a chance at a plus grade? Does the coin have a chance at a higher grade? If the coin is raw (and yes, there are still a lot of raw coins out there), what is its grade by today’s standards? Knowing this can save you money and possibly even make you money over time.

There are resources that will help you learn to grade. For many years, the ANA has published The Official American Numismatic Association Grading Standards for United States Coins; this book is now up to its sixth edition. There are several other books about grading on the market; all are good. Even the Red Book, among its many terrific features, has brief guides on how to grade each series.

coingrading.com covers Heritage Co-Chairman Jim Halperin’s book How to Grade US Coins, a classic in the field, especially when it comes to grading uncirculated coins. And if you don’t want to drag a book or six around with you when you’re visiting a coin dealer or at a coin show, PCGS has a smartphone app, PCGS Photograde, that covers grading of all US coin series.

But, no matter how many of these books you own or have read, you need to practice. This is why I participate in the forum threads I mention at the beginning; it helps to keep me on my grading toes. One of the programs I’ve run at coin clubs is to bring in slabbed with the grades covered up and have everyone in the room assign grades. There haven’t been any prizes involved, at least yet, but this gives everyone a chance to practice their grading skills. If you have raw coins, look at them, with reference in hand, and grade them. Maybe not all of them, but enough to get some practice. It will pay off in the end.