By Steve Roach
First published in the Jan. 10, 2011, issue of Coin World
Are rare coins an investment class? They are according to the Wall Street Journal.
For the past several years, Coin World has provided a "Classic U.S. Rarities Key-Date Investment Index" for use in the Wall Street Journal's investment scoreboard.
The scoreboard tracks investment groups in the categories of stocks, bonds, mutual funds, bank instruments (bank certificates of deposit and money market accounts), money market funds, precious metals and residential real estate.
Coins are listed in the category, "Rare Coins, top investment grade," in the year-end survey.
The investment index consists of 82 coins: 15 copper coins, five copper-nickel pieces, 39 silver coins and 23 gold coins with a total 2010 value of just more than $13 million. It's a collection of coins that tracks the high end of the market, with a diverse group of rare U.S. coins in high grades.
Coin World's rare coin index gained 15.8 percent in 2006, registered a 31.9 percent gain in 2007, rose a more modest 8.8 percent in 2008 and in 2009 recorded a 7.9 percent loss.
The 2010 index measured a gain of 10.3 percent, showing the resilience at the top of the market for rarities and the increasing confidence of sellers to test their luck by offering high-value coins at public auctions. The announcement of several substantial private-treaty sales of $1 million plus coins also bolstered confidence in the top end of the market.
Broken out by categories, copper coins gained 8.3 percent in 2010, compared with a huge 37 percent gain in 2009.
Silver and copper-nickel coins rose 6.2 percent in 2010, compared with an 8.9 percent loss the prior year.
Gold coins rose 14.3 percent in 2010, nearly completely erasing the 14.7 percent loss that was registered in 2009.
On the scoreboard, in 2008, rare coins were one of the few investments that registered a gain. However, fortunes can change quickly in the investment world, and in 2009, rare coins as measured by the Coin World index were among the worst-performing investments as the housing and investment markets rebounded.
Where will coins fit among other investments in the 2010 ranking?
The Wall Street Journal will publish the scoreboard in its Jan. 3 issue.
Monday, December 27, 2010
Monday, December 20, 2010
Three Big Rarities Offered at FUN Auctions
By Steve Roach
First published in the Jan. 3, 2011, Special Edition of Coin World
For the past few years, arguably the main annual event for the rare coin market has been the massive Heritage auctions at the Florida United Numismatists convention, a major coin show that will take place during the first week of the new year in Tampa Jan. 6 to 9.
The multiday auctions and the packed bourse floor at FUN set the tone of the market for at least the year's early months, as dealers reposition their inventories, and collectors make their first buys of the year.
Some expensive coins were sold at the 2010 FUN Heritage auction, including $3,737,500 realized for one of finest known examples of the 1913 Liberty Head 5-cent coin, tying the third-place record for the largest sum ever paid at auction for a single U.S. coin.
Two other million-dollar coins traded hands in the 2010 Heritage FUN auctions: a 1927-D Saint-Gaudens gold $20 double eagle graded Mint State 66, which sold for $1,495,000, and an 1874 Dana Bickford gold $10 eagle pattern in Proof 65 deep cameo, which sold above expectations for $1,265,000.
In total, more than $36.5 million in coins traded hands at the 2010 Heritage official FUN coin auctions.
While the new year's first auction lacks an obvious million-dollar superstar on the level of the 1913 Liberty Head 5-cent piece, three exceptional coins could prove dazzling.
Perhaps the most noteworthy is an 1852-O Coronet $20 double eagle graded MS-65. It is the finest known example of the date and the catalog description states that it is "quite likely the finest New Orleans twenty of any date."
In 2009, a Specimen 63 1856-O Coronet double eagle realized $1,437,500. In addition, 1850 to 1866 New Orleans Mint double eagles enjoy a healthy popularity.
Since the offered 1852-O Coronet double eagle has been off the market for more than 30 years, it's anyone's guess as to what this grand condition rarity will bring.
Another New Orleans Mint gold coin may also soar – the finest collectible 1909-O Indian Head $5 half eagle, graded MS-66. The lot description counts 19 examples graded MS-64 to MS-66 and the issue is the key to the series. The offered example last sold publicly in May 1998 as part of the Thaine B. Price Collection for $374,000, where it was described by auctioneer David Akers as "the finest collectible example of the rarest issue in the entire series."
While the Indian Head half eagle lacks the broad popularity that Coronet double eagles enjoy, coins that are undoubtedly the "best of the best" have thrived in the current market.
A third coin that could surprise is a Proof 67 1907 Indian Head, Normal Rim gold $10 eagle, formerly in the collection of Mint Director Frank A. Leach and held by his family for more than 100 years.
It's the finest example known, and the catalog makes an argument that it may be a trial piece. With an impeccable provenance and nearly unparalleled beauty, this coin has broad mass appeal.
First published in the Jan. 3, 2011, Special Edition of Coin World
For the past few years, arguably the main annual event for the rare coin market has been the massive Heritage auctions at the Florida United Numismatists convention, a major coin show that will take place during the first week of the new year in Tampa Jan. 6 to 9.
The multiday auctions and the packed bourse floor at FUN set the tone of the market for at least the year's early months, as dealers reposition their inventories, and collectors make their first buys of the year.
Some expensive coins were sold at the 2010 FUN Heritage auction, including $3,737,500 realized for one of finest known examples of the 1913 Liberty Head 5-cent coin, tying the third-place record for the largest sum ever paid at auction for a single U.S. coin.
Two other million-dollar coins traded hands in the 2010 Heritage FUN auctions: a 1927-D Saint-Gaudens gold $20 double eagle graded Mint State 66, which sold for $1,495,000, and an 1874 Dana Bickford gold $10 eagle pattern in Proof 65 deep cameo, which sold above expectations for $1,265,000.In total, more than $36.5 million in coins traded hands at the 2010 Heritage official FUN coin auctions.
While the new year's first auction lacks an obvious million-dollar superstar on the level of the 1913 Liberty Head 5-cent piece, three exceptional coins could prove dazzling.
Perhaps the most noteworthy is an 1852-O Coronet $20 double eagle graded MS-65. It is the finest known example of the date and the catalog description states that it is "quite likely the finest New Orleans twenty of any date."
In 2009, a Specimen 63 1856-O Coronet double eagle realized $1,437,500. In addition, 1850 to 1866 New Orleans Mint double eagles enjoy a healthy popularity.
Since the offered 1852-O Coronet double eagle has been off the market for more than 30 years, it's anyone's guess as to what this grand condition rarity will bring.
Another New Orleans Mint gold coin may also soar – the finest collectible 1909-O Indian Head $5 half eagle, graded MS-66. The lot description counts 19 examples graded MS-64 to MS-66 and the issue is the key to the series. The offered example last sold publicly in May 1998 as part of the Thaine B. Price Collection for $374,000, where it was described by auctioneer David Akers as "the finest collectible example of the rarest issue in the entire series."
While the Indian Head half eagle lacks the broad popularity that Coronet double eagles enjoy, coins that are undoubtedly the "best of the best" have thrived in the current market.
A third coin that could surprise is a Proof 67 1907 Indian Head, Normal Rim gold $10 eagle, formerly in the collection of Mint Director Frank A. Leach and held by his family for more than 100 years.
It's the finest example known, and the catalog makes an argument that it may be a trial piece. With an impeccable provenance and nearly unparalleled beauty, this coin has broad mass appeal.
Monday, December 13, 2010
Morgan dollars in high demand after silver surge
By Steve Roach
First published in the Dec. 27, 2010, issue of Coin World
Gold and silver continued their assent Dec. 6, with gold hitting a record $1,432.50 and silver reaching a 30-year high of $30.73 during trading on Dec. 7.
Investors continue to be worried about the financial stability of Europe, the potential for a weak U.S. dollar, and the possibility that the Federal Reserve will expand its latest stimulus package to buy more U.S. bonds.
These factors, combined with increased demand associated with the holidays, means there is a strong likelihood that bullion prices may keep increasing.
Higher silver prices directly impact collectors in that 90 percent silver bags of coins ($1,000 face value) are now trading for nearly $22,000.
A common Franklin half dollar is worth $11 now, solely for its melt value. A 40 percent silver Kennedy half dollar is worth $4.50.
Some issues have seen a surge in demand, such as certified Mint State 63 and MS-64 Morgan dollars, which are now trading for $39 and $57 each wholesale in sight-unseen markets, compared with the $34 and $44 level where they were trading in September.
The gains for MS-65 and MS-66 Morgan dollars have been less dramatic, with these issues trading at $125 and $205 wholesale.
However, none of these increases is proportional to the increase in the price of silver, which has moved up nearly 50 percent in the past three months.
Circulated Morgan dollars show nearly unstoppable demand, with dealers paying $24 for circulated 1921 Morgan dollars and $27 for Mint State examples.
For 1878 to 1904 issues, some dealers are paying $35 for a Mint State example and $36 for Mint State San Francisco Mint issues.
Even culls – the lowest of the low in terms of grade, generally ugly coins that can have major rim damage, scratches and heavy polishing – are trading at the $22 level.
The interest in the common issues has sparked increases in tougher dates too, because as the prices for common dates increase, tougher dates become cheaper by comparison.
Peace dollars haven't quite picked up the fire, with MS-63 examples bringing $32 and MS-64 examples seeing $38 wholesale.
First published in the Dec. 27, 2010, issue of Coin World
Gold and silver continued their assent Dec. 6, with gold hitting a record $1,432.50 and silver reaching a 30-year high of $30.73 during trading on Dec. 7.
Investors continue to be worried about the financial stability of Europe, the potential for a weak U.S. dollar, and the possibility that the Federal Reserve will expand its latest stimulus package to buy more U.S. bonds.These factors, combined with increased demand associated with the holidays, means there is a strong likelihood that bullion prices may keep increasing.
Higher silver prices directly impact collectors in that 90 percent silver bags of coins ($1,000 face value) are now trading for nearly $22,000.
A common Franklin half dollar is worth $11 now, solely for its melt value. A 40 percent silver Kennedy half dollar is worth $4.50.
Some issues have seen a surge in demand, such as certified Mint State 63 and MS-64 Morgan dollars, which are now trading for $39 and $57 each wholesale in sight-unseen markets, compared with the $34 and $44 level where they were trading in September.
The gains for MS-65 and MS-66 Morgan dollars have been less dramatic, with these issues trading at $125 and $205 wholesale.
However, none of these increases is proportional to the increase in the price of silver, which has moved up nearly 50 percent in the past three months.
Circulated Morgan dollars show nearly unstoppable demand, with dealers paying $24 for circulated 1921 Morgan dollars and $27 for Mint State examples.
For 1878 to 1904 issues, some dealers are paying $35 for a Mint State example and $36 for Mint State San Francisco Mint issues.
Even culls – the lowest of the low in terms of grade, generally ugly coins that can have major rim damage, scratches and heavy polishing – are trading at the $22 level.
The interest in the common issues has sparked increases in tougher dates too, because as the prices for common dates increase, tougher dates become cheaper by comparison.
Peace dollars haven't quite picked up the fire, with MS-63 examples bringing $32 and MS-64 examples seeing $38 wholesale.
Monday, December 6, 2010
Low mintages to create new modern rarities
By Steve Roach
First published in the December 20, 2010, issue of Coin World
The U.S. Mint's Dec. 1 announcement that it is placing tighter than expected mintage limits on the new 2010 America the Beautiful 5-ounce .999 fine silver bullion quarter dollars may result in the creation of some new modern rarities.
The large (3 inches in diameter) and undoubtedly impressive coins will surely be in hot demand, especially with such limited supplies.
The bullion issues are made available to authorized dealers who then resell the coins to the market. The mintages are strictly limited to not more than 33,000 of each design – a sharp decline from the 100,000 previously announced. The Mint will charge its distributors $9.75 per coin above the price of silver.
Uncirculated examples will be offered for sale directly to collectors during the first quarter of 2011. With mintage limits of 27,000 per coin, the 2010 issues seem destined to be modern classics, as the coins relate to circulating coins, are likely affordable to many collectors, and are simply big and flashy.
Of course, the long-term demand is largely dependent on whether collectors take to the large silver coins and seek to build sets.
Time will tell about the long-term popularity of these coins, but in the meantime, the lower-than-expected mintages should provide great action for speculators and spectators alike.
The American Eagle silver bullion coins provide a comparison point, having as key to the series the Proof 1995-W American Eagle with a mintage of 30,125 pieces. Examples of that issue regularly sell for $3,000.
Collectors' difficulties in acquiring Proof 2010-W American Eagle silver bullion coins, with strict 100-coin per household ordering limits, have already created a robust aftermarket for these coins.
On eBay, ready-to-ship examples have been regularly selling for $55.
At least one major market-maker is offering $49 a coin for 100-coin confirmed orders of Proof 2010-W American Eagle silver coins. At an issue price of $45.95, this allows a profit of nearly $300 for dealers, and provides the market-maker a large group of coins to market during the holidays.
First published in the December 20, 2010, issue of Coin World
The U.S. Mint's Dec. 1 announcement that it is placing tighter than expected mintage limits on the new 2010 America the Beautiful 5-ounce .999 fine silver bullion quarter dollars may result in the creation of some new modern rarities.
The large (3 inches in diameter) and undoubtedly impressive coins will surely be in hot demand, especially with such limited supplies.
The bullion issues are made available to authorized dealers who then resell the coins to the market. The mintages are strictly limited to not more than 33,000 of each design – a sharp decline from the 100,000 previously announced. The Mint will charge its distributors $9.75 per coin above the price of silver.
Uncirculated examples will be offered for sale directly to collectors during the first quarter of 2011. With mintage limits of 27,000 per coin, the 2010 issues seem destined to be modern classics, as the coins relate to circulating coins, are likely affordable to many collectors, and are simply big and flashy.
Of course, the long-term demand is largely dependent on whether collectors take to the large silver coins and seek to build sets.
Time will tell about the long-term popularity of these coins, but in the meantime, the lower-than-expected mintages should provide great action for speculators and spectators alike.
The American Eagle silver bullion coins provide a comparison point, having as key to the series the Proof 1995-W American Eagle with a mintage of 30,125 pieces. Examples of that issue regularly sell for $3,000.
Collectors' difficulties in acquiring Proof 2010-W American Eagle silver bullion coins, with strict 100-coin per household ordering limits, have already created a robust aftermarket for these coins.
On eBay, ready-to-ship examples have been regularly selling for $55.
At least one major market-maker is offering $49 a coin for 100-coin confirmed orders of Proof 2010-W American Eagle silver coins. At an issue price of $45.95, this allows a profit of nearly $300 for dealers, and provides the market-maker a large group of coins to market during the holidays.
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