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RSS FeedBy Steve Roach - http://www.steveroachonline.com
First published in the April 4, 2011, Special Edition of Coin World
One of the bigger winners among the recent issues produced by the U.S. Mint is the 2009 Saint-Gaudens, Ultra High Relief gold $20 double eagle.
The coins first went on sale the week of Jan. 22, 2009, at an issue price of $1,189.
The price of gold was $860 an ounce then, meaning that the coins were initially selling for a 38 percent premium to their gold content.
Almost immediately after the coins were released – with strict ordering limits – market makers were paying $1,650 each for the coins.
A year later, in February 2010, demand cooled. Mint State 69 coins and those in original packaging were trading at the $1,700 level, carrying a 54 percent premium, as gold had moved up to $1,100 an ounce.
Now in March 2011, the market for these coins has expanded greatly.
The mintage of 115,178 coins is well-distributed, and new collectors are being introduced to the coin for the first time. Add to the mix the increased attention that gold has been getting, and one sees the prices for this one-year type coin rising fast.
In the retail market, based on completed transactions on eBay, collectors are paying a premium for Ultra High Relief pieces with full original U.S. Mint packaging including the rosewood box, the accompanying book and the coins in Mint capsules, and for coins graded Mint State 69 by either Numismatic Guaranty Corp. or Professional Coin Grading Service.
Recently completed “Buy it Now” sales on eBay show multiple transactions at the $2,450 to $2,600 level for UHR coins in Mint packaging, and certified MS-69 coins are selling at the $2,300 to $2,500 level.
Certified MS-70 examples are generally selling at the $2,700 to $2,800 level.
With gold at $1,430 an ounce on March 14, a $2,500 price for a UHR represents almost a 75 percent premium to the gold content.
Many of the highest prices for these coins have been for NGC MS-70 Prooflike examples, which have sold on eBay for $4,500 to $5,000 recently.
The Prooflike coins represent a small percentage of the overall population.
While NGC has graded 14,220 Ultra High Relief coins, only 1,429 have been graded Prooflike. Of those 1,429 Prooflike UHR coins, 749 were graded MS-70 Prooflike. Of all the 14,220 NGC-graded UHR coins, 7,570 were graded MS-70.
That plenty of NGC Prooflike UHR coins are available is a good thing, indicating sufficient quantities exist to create a market, and thus demand, for the NGC Prooflike certified coins.
Both PCGS and NGC use the PL designation for this issue.
Another thing that the Ultra High Relief coin has going for it is that the Mint obviously took great care in producing these beautiful coins.
Coins in slabs designated NGC Early Release and PCGS First Strike are also trading for modest premiums to coins without such designations.
Steve Roach is a Dallas, Texas, based rare coin appraiser and fine art advisor who writes the world’s most widely read rare coin market analysis each week in the pages of Coin World. He is also a lawyer and helps create estate plans for collections. Visit him online at http://www.steveroachonline.com, join him on LinkedIn at http://www.linkedin.com/in/stevenroach or follow him on twitter @roachdotsteve
Mintage Numbers Collapse
January 19, 2010
By Dave
Is this the year the Mint suspends the coinage of some denominations completely?
That is a question that needs to be asked in light of the collapse of production in 2009.
Overall production dropped by 65 percent last year, or 6,593,580,000 pieces from the 2008 level of 10,141,580,000.
The 3,548,000,000 total mintage from 2009 wouldn’t even be a reasonable number for cents from one facility alone in a normal year.
Collectors who grew up wondering things like why were no half dollars produced in the years 1930, 1931 and 1932, or no quarters in 1931 and 1933, now are seeing a replay of how a weak economy causes a rapid drop in the demand for coinage.
Economic statistics showed that retail sales dropped 6.5 percent last year, something not seen since the Depression.
Fewer transactions mean less demand for coins.
Throw in desperate people raiding every coin container they ever possessed just to try to keep food on the table and the combination adds up to a drastic fall in coin demand.
In 2009 the Mint tried to manage the production reductions at an even pace. Except for dimes, the Mint was remarkably able to divide what work there was evenly between the Philadelphia and Denver Mints.
The only high level of demand occurred for gold and silver coinage. Demand for those coins reflect fear of inflation and/or the unknown by buyers.
This, too, has a parallel in the high mintages of gold $10s and $20s during the Depression before President Roosevelt banned gold ownership in 1933.
The 4,463,000 mintage for the gold $10 in 1932, the record for the Saint-Gaudens Indian Head series, was caused by the same type of panicky demand for gold that we are seeing with American Eagles today.
This demand also is reflected to a lesser degree in the mintages of the 1931 and 1932 $20s.
Roosevelt after banning gold ownership to end the panic, devalued the dollar and tried to induce inflation. By this action he proved the hoarder’s fears to be justified, but persistent deflation rather than inflation dogged the economy.
Are we in a period of similar paradox where fear of inflation actually produces deflation?
The U.S. Mint announced November 24th, 2009 that they were ceasing sales of 2009 1 oz Gold American Eagles and 2009 1 oz Silver American Eagles. They did not state when sales would resume. Prices on both are expected to increase due to strong demand and possible lack of product to sell.
If you are interested in purchasing these please call J&T Coins LLC at 866-267-6024.