LONDON (Commodity Online): In 2011, Forecast contributors in The London Bullion Market Association’s (LBMA) annual survey predict rises for all precious metals for the second year in a row.
Their average gold forecast is US$1,457, a 19.0% increase on the 2010 average price, similar to the forecast of $1,450 made by delegates at the 2010 LBMA Precious Metals Conference in Berlin last September.
Analysts predict that the average silver price will be $29.88, a 48.0% rise on the 2010 average price.
The average 2011 Platinum price is forecast to rise 12.6% from the average 2010 price, to $1,813 and palladium shows no sign of slowing down with an average 2011 price prediction of $814.65, a 54.8% increase on last year’s bumper average price.
2010 was a very good year for LBMA forecasters. Their average gold price prediction of $1,199, a 23.4% increase on the 2009 price, was just $26 lower than the actual average price of $1,225.
All metals rose as predicted, although silver and palladium exceeded almost everyone’s expectations
LONDON (Commodity Online): Along with gold and silver bullion, the prices of platinum and palladium have been on an upswing, driven by the rising demand for these precious metals commodities from emerging markets like China.
With the economies of several countries looking better and car sales set for brighter days, demand for platinum and palladium is increasing day by day.
Global bank HSBC is bullish on platinum and palladium. In an 2011 outlook on the precious metals, HSBC has maintained its platinum-price outlook at an average of $1,750 an ounce in 2011 and upping its palladium outlook to $750 from $675.
“A continued recovery in global automobile production will support both platinum and palladium prices, but should favor palladium,” it said.
HSBC said much of the growth in world auto production will come from China and other parts of the emerging world and the U.S., where palladium-rich gasoline-fired vehicles are preferred to diesel-fired vehicles, which have a heavier platinum weighting.
According to HSBC analyst James Steel, winner of an LBMA 2010 price-forecast competition in platinum, high prices in China are hurting jewelry demand, but ETF demand for both metals is likely to remain firm in 2011.
“South African platinum supply increases will be limited by a lack of power, available water, technical expertise and a strong rand,” he said.
Much palladium is a by-product of Russian nickel and South African platinum production, thus limited supply prospects for increases in these metals will limit palladium output.
“Palladium also stands to benefit from growing concerns that Russian state-owned stockpiles may be depleted,” HSBC added.
According to a report from Barclays Capital, holdings in exchange-traded products backed by platinum group metals have hit fresh peaks.
ETF holdings in by 3.4 metric tons this week, with some investors booking profits at the start of the New Year, and silver holdings eased 3 tons.
But PGM holdings in ETFs continued to grow to set a fresh record high, says the Barclays report.
Platinum holdings rose by 1,400 ounces to 1.25 million, while the rise in palladium was 10,000 to 2.25 million.
According to precious metals investment strategist Tom Lydon Platinum ETFS are going to glitter in 2011 because the platinum’s price is soaring to new heights.
Increased car sales across the world, including China, rush for platinum jewellery in place of gold and investor fascination for new precious metals products are driving up demand for Platinum ETFs.
Last year, ETFS Physical Platinum Shares (NYSEArca: PPLT) was launched in the US. It is the first physically-backed platinum focused ETF to trade in the United States.
There are a variety of ways to play platinum and palladium with ETFs and exchange traded notes (ETNs), including the following [Differences between ETFs and ETNs.]:
Recently, BNP Paribas described its 2011 outlook as “favorable” for silver, platinum and palladium, with palladium having the most potential upside due to its tight physical balance.
BNP’s 2011 average-price forecasts are $25.80 for silver that includes $27.45 in the fourth quarter of the year, compared to an expected $19.90 for 2010; $750 for palladium, compared to $521 for 2010; and $1,800 in platinum, compared to $1,613 for 2010.
(Kitco News) – The sell-off that hit precious metals prices this week could continue to spill over to next week, market watchers said.
Index rebalancing occurs next week, as traders and funds that follow the composition of the various commodity indexes will need to adjust the weightings of the various markets to be in alignment. Analysts said some of the weakness in precious metals this week was likely investors selling ahead of this annual event.
“People are attributing part of break to that – doing some pre-emptive selling. You see it year-in, year-out. This year it hurts metals because they’ve rallied so much. (These investors) are looking for markets that are undervalued,” said Darin Newsom, senior analyst at Telvent DTN.
Friday, February gold futures prices on the Comex division of the New York Mercantile Exchange settled at $1,368.90 an ounce, down 3.7% on the week. March silver settled at $28.67 an ounce, down 7.3% on the week.
If selling continues next week, that support could be broken, with the next psychologically important target of $1,350 seen as important.
Newsom said support is also around $1,317, which is another key technical chart level. A break of that region could mean a retreat to $1,250. For silver, support is in the $23-$24 range.
He’s not sure gold prices have bottomed in the short term yet. Buying interest ran out near the highs set last month, and with the dollar rising, it left the metals in a vacuum. “For next week I’m not seeing anything to change that. It would take bearish economic news or the EU to have problems – that would entice safe-haven buying,” he said.
Nesom said the dollar’s action will be something to watch for direction for all commodities. Recent dollar strength has pressured resources across the board. “I’m not a dollar bull yet, but it has room to go up. That will pressure commodities,” he said.
Ira Epstein, director of the Ira Epstein division of The Linn Group, said while longer-term gold remains strong, in the short-term trading view, a top is in place.
“Until prices get back over $1,437, rallies look to be selling opportunities…. Gold is now in a downtrend, but one that is already approaching it’s initially downside target. Can gold fall $100 or more from the $1,437 level? Why not? However, an all out collapse in price given periphery problems is in my opinion not in the cards,” Epstein said.
The periphery problems are the ones that lifted gold all last year- namely worries over European sovereign debt and gold’s increasing role as a reserve currency.
Epstein added regardless of his viewpoint, “nothing runs up without at some point taking a breather. Think of stairs. Each step has a landing pad. Prices often move up and down in stair like patterns.”
Next week brings more economic data to influence the markets. U.S. economic data this week was generally strong, which helped the dollar gain. Among some of the reports that are slated for release next week include the producer and consumer price index – inflation gauges – and retail sales.
Newsom said the government inflation reports are unlikely to show rising prices, especially considering crude oil prices didn’t move much during the reporting period. That’s unlikely to give gold a reason to rally.
Legislation authorizing the US Mint to strike American Palladium Eagle coins was approved Tuesday by the U.S. Senate and has been sent to the desk of President Barack Obama to await his expected signature.
Weinman’s Winged Liberty design shown on this silver 1916 Mercury Dime will be featured on the obverse of the American Palladium Eagle coin
The coin legislation was originally introduced by United States House of Representative member Denny Rehberg (R) from Montana to add bullion and collector proof and uncirculated Palladium Eagle coins to the US Mint’s product offerings. Currently, the US Mint strikes American Gold Eagles, American Silver Eagles and American Platinum Eagles.
The fourth option is meant as a viable alternative to the extremely popular gold and silver coins. In fact, the current market price of palladium places it almost squarely in between the two other precious metals. London Spot for the metal averaged $682.91 per ounce during the month of November 2010, whereas silver came in at $26.54 an ounce and gold stood at 1,369.89 an ounce.
“I’m pleased that my legislation cleared the final hurdle and is now destined for the President’s desk,” said Representative Denny Rehberg upon hearing the news of the Senate passing the legislation which was numbered H.R. 6166. “As the price of gold skyrockets, Palladium provides investors with an option for an alternative precious metal.”
Stipulations in the American Eagle Palladium Bullion Coin Act of 2010 dictate that the obverse and reverse designs be based on the work of noted artist Adolph A. Weinman. Weinman’s name is well-known to coin collectors as his “Walking Liberty” already graces the American Silver Eagle coin. That design was originally used on the silver Walking Liberty Half Dollar that appeared from 1916-1947 and is considered by many to be one of the most beautiful ever to be used on a coin of the United States.
The obverse of the American Palladium Eagle coins will also be a design showcased before on a circulating coin. This time, the image will be a high relief likeness of Weinman’s “Winged Liberty” which appeared on the silver dime from 1916-1945. Many know this coin as the silver Mercury Dime.
On the reverse, a much less well-known design of Weinman’s will be used. It will be taken from the 1907 American Institute of Architects medal.
Each new coin will be struck from one ounce of .9995 fine palladium with a face value of $25. The coin’s diameter and thickness will be determined by the Treasury Secretary. Proof versions will be minted in West Point. Uncirculated and bullion versions may be minted at any Mint facility.
The American Eagle Palladium Bullion Coin Act has unique design language for the collector proof and uncirculated coins stating that the Treasury Secretary shall, “to the greatest extent possible,” use different surface treatments for each year’s issue.
American Palladium Eagle Coins must be minted beginning “not more than 1 year” after the Treasury Secretary submits a marketing study to Congress to “ensure that such coins could be minted and issued at no net cost to taxpayers.”
Oil prices moved modestly higher in European session as an EU/ECB/IMF bailout for Ireland may help ease risks of contagion to peripheral countries. Currently trading at 82.82, the front-month contract for WTI crude oil rose after recording 2 consecutive weekly losses. Fuel prices also climbed as weakness in USD drove demand for commodities. Precious metals traded within narrow ranges with a positive tone. Both silver and palladium gained more than +1%, outperforming slow crawls of gold and platinum.
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The program to fund Ireland would be financed from the European financial stabilization mechanism (EFSM) and the European financial stability facility (EFSF). It would also possibly be supplemented by bilateral loans to be negotiated by EU Member States with the UK and Sweden standing ready to consider a bilateral loan. The IMF also said it ‘stands ready to join this effort, including through a multi-year loan’.
Market confidence has been boosted today but some investors, including us, worried that sovereign crisis in peripheral European economies will not be resolved after the rescue plan. The next country in focus is Portugal. Although the EU denied that Portugal may need to tap external funds as does not have the same size of problems in the banking sector as Ireland. However, the problem in Portugal is slow growth and high deficits. More importantly, if Portugal is unable to regain market confidence, it will eventually have the same fate and Ireland and Greece.
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Societe Generale said palladium, gold and silver will extend their rallies in 2011 and precious metals will outperform agricultural products. The investment bank forecasts gold price will rise to 1500 to 1600 in 2011 while silver and palladium will rise 19% and 21% respectively.
We are also bullish on precious metals and believe palladium will be the best performer in the complex. As we mentioned in the weekly report, Johnson Matthey estimates palladium demand will jump +12.26% y/y in 2010, following contraction of around -8% over the past 2 years. Although supply will increase for the first time in 3 years, surplus will only be around 45K oz, the small level since 2000. Potential supply shortage supply in Russia may result to significant palladium deficit in 2011. We find ourselves more optimistic on palladium’s outlook than Johnson Matthey, especially on Chinese demand. In the interim report, Johnson Matthey said that ‘the demand outlook for palladium is so strongly weighted towards Chinese economic and industrial growth that any softening of that growth could reduce demand, moving the market closer to balance’. While we agree that acceleration in China’s tightening measures to curb inflation and asset bubbles will slow demand for palladium, rise in living standards will increase domestic demand for vehicles. Moreover, new emission regulations will also stimulate uses of palladium as autocatalysts.
The heavy selling that began late last week continued yesterday and this morning we are looking at sharply lower prices. The market continues to worry about tighter monetary policy in China, a sharp selloff in US Treasuries and a strengthening US dollar.
The euphoria that the markets enjoyed just a few days ago on the QE2 announcement has now faded and a slew of better than expected economic releases in the US along with strong statements from the EU that they will support Ireland and Portugal has the precious metals complex on the defensive.
The physical market which had been very robust throughout the fall rally continues to see increased demand as the volatile markets have moved lower. Premiums are moving higher as delays on acquiring and shipping some products is now evident. On the technical side we look for support at $1,350.00 and below that at $1,315.00 with resistance at $1,385.00, $1,400.00 and $1,425.00. Silver should find support at $25.25 and $25.00 with resistance above at $26.00 and $26.50.
The economic calendar for the balance of the week will include unemployment claims and Leading Economic Indicators on Thursday and a speech on Friday by Ben Bernanke as he addresses the European Central Bank Conference.
In a year when demand for precious metals is only getting hotter, platinum is having its worst relative performance since 2006.
The combination of uninterrupted production in South Africa and a third year of stagnating demand has limited platinum’s gains to about 20 percent this year, 24 percent below its 2008 record. Palladium has rallied 71 percent, silver rose 59 percent and gold 27 percent.
Investors are piling into precious metals as the Federal Reserve pumps $1.7 trillion into the financial system and buys more debt to keep the economic recovery from flagging. That’s not helping platinum as much as production of the metal outstrips demand for a third year, according to data from GFMS Ltd., a research company in London.
“Platinum’s been a laggard,” said Brian Hicks, who helps manage $750 million at U.S. Global Investors in San Antonio. “Platinum has industrial uses like palladium but palladium is a tighter market and platinum is not the kind of metal that garners a lot of fund flow like gold and silver in times of uncertainty.”
Hicks sold platinum and bought gold in the third quarter. “We just decided we’d rather have more assets in gold than platinum because of a concern in a slowdown in the economy,” he said in a phone interview on Nov. 5.
Growing speculation that economic stimulus measures will fuel inflation as economies recover from the first global recession since
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World War II prompted investors to increase exchange-traded product holdings in gold, silver, platinum and palladium to 16,406 metric tons this year, according to data compiled by Bloomberg. That’s 65 percent of the 25,030 tons mined around the world, leaving less for jewelers, glass producers and automakers, the biggest industrial user, according to GFMS.
Platinum for immediate delivery fell $8, or 0.5 percent, to $1,760.50 an ounce in London.
Precious metals outperformed stocks and bonds this year as investors sought a store of value. The MSCI World Index of stocks has climbed 7.7 percent while U.S. government debt returned 8.8 percent, according to Bank of America Merrill Lynch’s Treasury Master Index.
“Nothing goes straight up all the time,” Jim Rogers, the chairman of Rogers Holdings who predicted the start of the global commodities rally in 1999, said in an interview in Oxford, England, last week. Platinum “was the hottest in the world in 2008,” he said.
Platinum may start to catch up as jewelers shun more expensive metals, according to Sanford C. Bernstein Ltd. Hedge funds and other speculators boosted bets on platinum rising, pushing so-called net long positions to the highest level since at least 1993 in the week through Nov. 2, U.S. Commodity Futures Trading Commission data showed on Nov. 5.
Platinum “jewelry demand could be supported by high gold prices,” Bernstein analysts including London-based Paul Galloway wrote in an Oct. 29 report. “Perhaps it’s time to switch.” Jewelry accounted for 41 percent of gold demand and 35 percent for platinum last year, according to GFMS.
A rally may boost the shares of Johannesburg-based Anglo Platinum Ltd. and Impala Platinum Holdings Ltd., the world’s biggest producers. Anglo dropped 8.1 percent this year. Impala has gained 3 percent. The MSCI World Materials Index of 160 commodities shares has climbed about 14 percent in 2010.
“There had been expectations through last year that platinum production was going to be significantly hit by power constraints in South Africa,” said David Wilson, an analyst at Societe Generale SA in London and the most accurate platinum forecaster in the first quarter among 11 surveyed by Bloomberg News. “The platinum market still seems to be in a reasonably healthy surplus.”
LONDON (Commodity Online): In commodity market, 2010 became a big boom for the precious metals, especially for gold, silver and palladium.
The uncertainty of several economies added to the boom for the precious metals market. Palladium’s price point has risen nearly 50 percent during 2010, nearly twice that for gold and three times that for platinum, palladium’s chemical cousin.
Price’s for palladium are reaching their highs for the decade, and these levels would be a record had not the market been distorted back at the turn of the millennium.
The two largest producers of palladium, Russia and South Africa, account for roughly 45 percent of the market apiece, with Canada and the United States splitting the remaining 10 percent.
Approximately half of this production is used in making catalytic converters for the global automobile industry, and Ford Motor Company, fearing a shortage brought on by ongoing political instability, stockpiled the metal at market-panicked prices, as noted by the severe spike in 2000. When tensions subsided, Ford recorded a financial loss of over $1 billion after prices plummeted back to reality.
The recent recession and the related drop in global manufacturing caused the dip in prices in 2008. Palladium may often be substituted for gold, silver and platinum in jewelry settings, but consumer demand is not the primary driver for demand.
Uses for the metal may start with catalytic converters, but they also wind their way through electronics, dentistry, medicine, hydrogen purification, chemical applications and groundwater treatment.
As environmental concerns continue to dictate stiffer emission controls for autos and trucks and consumers continue to be fascinated with the latest electronic gadget, whether it be a computer, mobile phone or television, palladium prices will rise to meet growing manufacturing demands.
Newer technology in the energy production market has also begun to focus on the fuel cell industry where hydrogen and oxygen are combined to form electricity. Palladium actually performs a key role in this conversion process. Intrinsic value, derived from its many complex industrial uses, heavily influences this metal’s pricing dynamics.
With both old and new technology contributing to demand for palladium, a growing concern for industrial users is the obvious investment potential of the metal for global investors. Mutual funds, ETFs and bullion safekeeping firms are avenues for retail investors to benefit from the metal’s recent price run up, but the “hoarding effect” of these entities may drive the price even higher than is market justified. A weakening Dollar in the forex market may also cause appreciation and speculation based on forex news alone.
Speculation will always follow situations such as these, leaving someone holding the proverbial “bag” at some point. However, the global recovery of the manufacturing sector will benefit palladium prices in the long run.
(Source: Resourceinvesting News)
How are rare coin prices determined? Often the question dealers will ask is: “I know what Greysheet (Coin Dealer Newsletter bid) is, but what can I ‘really’ get for it?”
In this month’s Rare Coin Market Report, I will explain how I determine the value of an individual coin. Most often I will use a variety of different pricing sources to determine the value of a coin.
The most utilized source of rare coin pricing information among dealers are the variety of Coin Dealer Newsletter publications including Greysheet, Bluesheet, Monthly Summary, and the Quarterly Supplements. Dealers also use CCE, which is the Certified Coin Exchange. Coin World Trends, Collectors Universe prices, Redbook, and Coin Prices are also utilized.
In the last several years auction prices realized have become one of the most useful and often misunderstood sources of pricing information. Let me explain a little bit about all of these different sources before I explain how I use them.
The Greysheet and Bluesheet are weekly publications and list many of the most frequently traded U.S. rare coins, BUT the values they list vary significantly.
Basically Greysheet lists sight seen bids for attractive coins. Bluesheet lists sight unseen bids for coins that might not be that attractive although they are graded correctly. Because I am looking for attractive coins, I often have to pay Greysheet bid or more for an attractive coin. If someone offers me a coin I don’t particularly like I am going to check the ‘bid’ on Bluesheet to see what the ‘basal’ value really is.
Depending on the particular coin the difference between the Greysheet and Bluesheet can vary as much as 70%. Yes, 70%!
CDN Monthly Summary is published each month and includes more of the frequently traded U.S. rare coins by date and grade including the early twentieth century gold series and most of the classic twentieth century collector series.
One of the three different CDN Quarterly issues come out every month and the three include all the other U.S. rare coin series by date. The Quarterly One issue contains half cents through quarters. The Quarterly Two contains halves through $3 gold coins. The Quarterly Three contains prices for $5 Liberty through $20 Liberty Gold Coins.
All prices for the Monthly Summary and Quarterly price sheets are for sight seen coins. There is also a supplement included with each month’s Quarterly Supplement that has prices for Proof coins not listed in the Quarterly Supplements.
Certified Coin Exchange is a dealer to dealer network owned by Collectors Universe/PCGS. Dealers pay a monthly service charge to actively bid or access the bidding information on this system. The bids are ‘live’ during the main business hours, roughly 11 to 4, Monday through Friday depending on what time zone you are in. These live bids are either S, sight seen or U, sight unseen. CCE also includes a couple of other marketing areas as well as the newer variation of the old dealer ‘teletype’ network.
Much of the information for CDN/Coin Dealer Newsletter bids comes directly from CCE. S-Sight seen bids are for coins that can be returned if the buying dealer feels they aren’t nice for the grade. U-Sight-unseen bids are for anything in the proper grade in the designated holders with no return privilege. Bids for PCGS and NGC coins are predominate although there are bids for ICG and ANACS coins.
Coin World Trends, Coin Universe prices, and Coin Values are all ‘retail’ pricing guides. Although the prices listed are GENERALLY what one would expect to pay for a NICE collector coin, I as a dealer often pay more than these supposed ‘retail’ prices for especially scarce or elusive coins.
Many of the more modern items are listed, but the values are quite subjective. Information updates are often neglected in these price sources. Many times, especially in rising or falling markets, the prices are just wrong. The Redbook or Guide to United States Coins is a fantastic source of information, BUT it is published ONCE a year and the values are geared towards the casual collector.
The last and most misunderstood source of pricing information are the ‘Auction Prices Realized’. The biggest U.S. rare coin auction houses sell thousands of coins each year at public auction. These prices most often include a 15% buyer’s fee. The information is incredibly valuable, but misinterpretation is really a problem. For a fee, you can access APR information on the PCGS website. PCGS compiles and lists coins by date and grade and has APR numbers for coins going back roughly fifteen years. Heritage Auctions have sold the most certified coins at auction and therefore their database is the largest individual auction company source. I use both the PCGS APR listings and the Heritage APR listings especially when determining an infrequently traded coin’s value.
Are you confused yet? You should be-HA! Many full time dealers don’t really understand the nuances that come with determining a coin value. If they can buy it at Bluesheet-sight unseen bid-they feel ‘safe’ because they haven’t paid any premium over the basal value. If they are only willing to pay Bluesheet numbers they are invariably going to get a high percentage of ‘ugly’ sight unseen coins. The problem with buying bargain basement material always comes down to this: YOU GET WHAT YOU PAY FOR!
To illustrate how I determine the value of a coin I am going to give you two examples. The first is for a frequently traded coin that exists in relatively large quantities, but has a huge demand. The second coin I am going to use as an example is a rare coin that might only come on the market once or twice every couple of years. Determining the value of the first coin is easy. On the second coin I will utilize virtually all the pricing sources I have mentioned previously. From that data, I will then determine both a price that I am willing to pay for that coin as well as a price I feel is fair to my customer.
Coin Number One: 1885CC Morgan Dollar MS65 PCGS. Although the 1885CC Morgan Dollar in MS65 is roughly a $1000 coin in MS65, it isn’t particularly rare but it is scarce and it has a huge demand. Not only do people love Morgans, but Carson City Morgans sell like ‘hotcakes’. Nice CC Morgans are out there, but the difference between an average coin and sight unseen coin is easily 20%. Let’s look at the bids and then I will make some observations.
Coin One:
1885CC Morgan Dollar MS65 PCGS. Mintage: 228,000. PCGS/NGC total population MS65: 5366
G/S $900
B/S $830
CCE Sight $890
CCE Sight-unseen $830
C/W Trends $1250
Coin Universe $1200
The prices vary as much as 33%. A pretty sight seen coin will cost me between $875 and a $950 to purchase in the wholesale market. To make a profit, I will charge between $1025 and $1100 for a NICE coin. If you want a sight unseen coin, I can probably sell you one for about $925 or less.
Don’t make the bargain hunter mistake. Yes, you can save $100 to $175 buying a sight unseen coin, but someday you are going to want to SELL that sight unseen coin. Sight unseen coins don’t magically become nicer sight seen coins. Both dealers and collectors are looking for NICE coins with eye appeal. Don’t settle for average. You will PAY for it in the long run.
Coin Two
1866 $3 Gold AU58 PCGS. Mintage: 4000. PCGS/NGC total population for AU58: 77.
Greysheet Bid (for a common $3 Gold type coin): $1475
The prices listed vary significantly especially between the Greysheet ‘date’ bid and the Greysheet ‘type’ bid. The ‘type’ or common bid price is for the most common date in the series while the ‘dated’ CDN Quarterly bid reflects the price for a coin with a tiny original mintage with true scarcity. The ‘type’ bid does provide a basal value, but for this illustration is not pertinent.
Both Coin World Trends and Coin Universe prices are supposed ‘retail’ prices for the date, but for a low population coin with a mintage of only 4000 they are actually a little low. The Auction Prices Realized are all over the place. How do I determine the value?
After looking at the ‘bids’ for the date I refer to the APR-Auction Prices Realized. First I see how many have sold at auction in the last several years. If the prices realized fall into a tight range, my job is easier. If several have sold for roughly the same price and this price range fall between the ‘dated CDN Quarterly bid and the Coin World Trends or Coin Universe prices, then there is a good chance that the coin is worth roughly what they have sold for at auction. Basically an ugly coin will be worth less and a pretty coin will be worth more.
If the prices realized have both a wide range and don’t fall between the CDN Quarterly bid price and Trends Coin Universe prices, then the price determination becomes more difficult. Several questions should be asked that may or may not be answerable.
First, did one or two examples fall significantly out of the price range? Second, did several sell during the same time period or in the same auction? Lots of factors drive the bids in an auction, but the biggest factor is whether the buyer paid a premium because they thought the coin would grade higher. Third, if several coins are sold in the same auction that possibly came out of a little hoard or collection, an ugly coin could bring significantly less. In addition, several examples of the same scarce coin coming on the market at the same time can depress the price realized.
Here is what I see when I examine the Auction Prices Realized. The $3910 was an exceptionally nice coin or a potential breakout. The $2875 coin was an ‘ugly’ example. The other four prices all fall within a tight range. CDN Quarterly bid is $2575. Collectors Universe price is $3700. Coin World Trends is somewhere between $2500 and $4000. The four coins in the mid price range are probably attractive coins for the grade. An attractive example is worth somewhere between $2700 and $3100 wholesale and, if priced fairly should bring $3400 to $3800 for an attractive coin.
Remember ‘bids’ are just numbers on paper or a computer screen. This is a coin I just purchased recently. I paid $2800 and ‘flipped’ it to another dealer for $3000. Both myself and another dealer were willing to pay more than CDN Quarterly bid ($2575) for this coin.
For this example the 15% buyer’s premium has to be taken into consideration also. Many folks don’t understand how this 15% or ‘juice’ affects the value of a coin. Often times this 15% is split between the auction house and the consignor. Often times a dealer consigning a coin to auction will actually get between 1.05 to 1.08 of the 1.15 that includes the hammer price and the 15% buyers fee. In other words, the consignor is actually getting a little more than the ‘hammer’ price. The auction house is willing to give up part of their 15% to secure nicer consignments.
Where does CAC fall into the mix? CAC was founded in 2007 to ‘sticker’ coins that met their requirements for both nice eye appeal and correct technical grade. Basically, they are grading the graders. CAC coins bring more money. Frankly, I feel they should. CAC has done an excellent job of ‘stickering’ coins that are not only nice for the grade, but totally original. CAC coins often bring between 5% and 50% more than current bid levels on a wholesale basis depending on the particular issue.
The information I have provided today is very subjective. A nice coin will generally bring more whereas an ugly or darkly toned coin will bring less. There are dozens of additional considerations to determining the value of a coin. My goal with this article has been to provide you the consumer with an insider look at how a dealer values a coin.
Comments and questions are always appreciated. My methodology isn’t ‘rocket’ science, but these procedures have served me well over the last couple of decades. When pricing a coin, the quality of the coin itself should be paramount. I often pay ‘WAY OVER’ bid levels for an exceptional coin. Don’t be afraid to pay extra for an exceptional coin. Most often those are the coins I sell first!
Bozarth Numismatics offers hundreds of rare U.S. coins on their website bozarthcoins.com or via eBay each month. We attend over 40 shows a year and write another column each month called Rare Coin Road Warrior. You can view either our Rare Coin Market Report or Rare Coin Road Warrior articles each month on our website bozarthcoins.com or at coinlink.com.
Legislation was recently introduced seeking the production of American Palladium Eagle bullion and collector coins. This comes two months after testimony was delivered at a House subcommittee meeting, which cited the desire among collectors and investors for such an offering.
The bill H.R. 6166 American Eagle Palladium Bullion Coin Act of 2010 was introduced on September 22 by Rep. Dennis Rehberg of Montana, where most domestic palladium mining takes place.
In 2008 and 2009, bills had been introduced in both the House of Representatives and the Senate seeking palladium bullion coins carrying Augustus Saint Gaudens’ design for the 1907 Ultra High Relief Double Eagle. One of the 2008 bills was passed in the House, but none of the others managed to move forward.
As was the case with previous bills, the current bill includes some unusual and oddly specific requirements for the palladium coins. On the other hand, it also manages to address some of the current issues which complicate other US Mint bullion coins programs.
The bill H.R. 6166 includes the following requirements for the proposed American Palladium Eagles:
- A study to analyze the market for palladium bullion investments must be performed by a reputable independent third party to ensure adequate demand for the offering.
- Bullion for the Palladium Eagles must be acquired from natural deposits in the United States, within one year after the month in which the ore was mined. If no palladium is available from this source or it is not economically feasible, other available sources may be used.
- The coins would carry a face value of $25 and contain one ounce of .9995 fine palladium. Size and thickness are to be determined by the Secretary of the Treasury.
- The obverse of the coins would feature a high relief likeness of Adolph A. Weinman’s Mercury Dime. The reverse would bear a high relief version of the 1907 American Institute of Architects Medal, also designed by Weinman. (Here is the only image of the medal that I could find.)
- Coins may be produced in both uncirculated and proof versions. (I believe uncirculated refers to “collectible uncirculated” versions as opposed to bullion versions.) If these coins are issued, to the greatest extent possible, the surface treatment of each year’s proof and uncirculated coin should differ in some material way from that of the preceding year.
- Any United States Mint facility other than the West Point Mint can be used to strike coins minted in versions other than proof. If proof versions are struck, the proof coins shall only be produced at the West Point Mint.
Palladium is currently trading at $559 per ounce, representing a gain of 37.66% for the year to date. During 2009, palladium recorded a gain of 114.75%. The all time high price was reached in $1,090 per ounce was reached in January 2001.
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Weinman’s Winged Liberty design shown on this silver 1916 Mercury Dime will be featured on the obverse of the American Palladium Eagle coin
Societe Generale said palladium, gold and silver will extend their rallies in 2011 and precious metals will outperform agricultural products. The investment bank forecasts gold price will rise to 1500 to 1600 in 2011 while silver and palladium will rise 19% and 21% respectively.
The most utilized source of rare coin pricing information among dealers are the variety of Coin Dealer Newsletter publications including Greysheet, Bluesheet, Monthly Summary, and the Quarterly Supplements. Dealers also use CCE, which is the Certified Coin Exchange. Coin World Trends, Collectors Universe prices, Redbook, and Coin Prices are also utilized.
The Greysheet and Bluesheet are weekly publications and list many of the most frequently traded U.S. rare coins, BUT the values they list vary significantly.
