Shortage of great objects affect high-end art, rare coin markets

By Steve Roach - http://www.steveroachonline.com
First published in the April 11, 2011, issue of Coin World - http://www.coinworld.com

The same thing could be said about the American Numismatic Association National Money Show – held March 17 to 19 in Sacramento, Calif., and the European Fine Art Fair held the same week in Maastricht, the Netherlands: great and fresh objects are getting increasingly hard to find in this market.

From the Maastricht reports, it seems that many of the big paintings, including a $47 million Rembrandt painting that last sold at auction in 2009 for $33.2 million, had been previously offered in the last several years (pictured below). The lack of fresh material has led many market observers to conclude that people are holding onto their treasures rather than selling them.

At the Heritage auction held at the ANA show, the top lot was familiar – a 1796 Draped Bust, Small Eagle half dollar graded About Uncirculated 58, which realized $207,000. That was the same price that it realized the last time it crossed the Heritage auction block in August 2008, at the ANA World’s Fair of Money auction, meaning after the 15 percent buyer’s fee is taken into account, the seller encountered a loss.

Yet, fresh objects that are at the top of their class and of documented rarity and quality continue to exceed expectations.

At European Fine Art Fair, many of the best works are sold at the VIP preview, an event held before "regular people" even get a chance to see them. The reports of works sold early had a common denominator: they were high-quality, rare and not previously offered in recent memory.

Just one other six-figure coin sold at the Heritage ANA auction – a 1792 Washington, Roman Head cent graded Proof 64 brown (pictured right).

While part of the English Conder token series, it has popularly been collected as part of the Colonial coin market segment, its acceptance confirmed by its inclusion in A Guide Book of United States Coins, or the "Red Book."

It realized $100,625 – substantially more than the $66,125 that a Proof 61 brown example realized in a January Heritage auction.

Nearly every post-ANA dealer report noted that good quality and rare coins are becoming hard to buy in this market and dealers are having trouble building inventories of the tough and handsome coins that collectors covet.

Most great coins, and great objects of most collectible asset classes, are in secure hands right now and not moving in the markets.
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

2009 Ultra High Relief gold $20 on the move upward

By 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

Silver and gold continue their bull runs; Proof American Eagles gain

By Steve Roach - http://www.steveroachonline.com
First published in the March 28, 2011, issue of Coin World - http://www.coinworld.com/

Silver topped its 31-year high again, closing at $36.60 an ounce March 7 in the London market. Gold closed at $1,437.50 March 7.

Investors are clamoring over hard assets like bullion, driven by instability in North Africa and the Middle East, concern about debt in European countries like Greece and Portugal, along with statistics that often paint a grim picture of the U.S. debt level.

The United States recorded its biggest monthly deficit ever on March 7, estimating a $223 billion deficit for February. It marked the 29th straight month of deficits.

International markets responded with weakened demand for the U.S. dollar, which in turned drove up prices for gold and silver.

On March 8, gold and silver prices declined a bit as the price of oil dropped on speculation that members of the Organization of Petroleum Exporting Countries would increase production to meet increased demand.

Several major wholesale dealers have stepped up their pricing for Proof American Eagle gold bullion coins with original Mint packaging including cardboard outer box, velvet inner box and certificate of authenticity.

On March 1, one major wholesale dealer was paying $1,585 an ounce for these coins, then raised the prices to $1,600 an ounce, and then on March 7 raised them again, to $1,650 an ounce.

Proof American Eagle gold bullion coins with original Mint packaging are currently drawing strong market attention.

In contrast, the same buyer is purchasing Proof American Eagles with incomplete Mint packaging or in third-party grading service slabs for $1,500 to $1,525 an ounce.

What a difference a box or a certificate of authenticity makes!

Just a box and papers for a 1986 American Eagle 1-ounce gold $50 coin – with no coin – can trade for as much as $150, and a market exists for other years at the $100 level.

Proof American Eagle silver bullion coins are stable in wholesale markets at the $51 level as the additional supplies of the 2010 issues seems to have taken the edge off of the supply crunch that brought these to the $57 level last year.

The market does differentiate between the 1986 to 2008 issues and the 2010 issues, preferring the earlier issues to a certain extent.


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

Gold hits all time record high; silver dollars still blazing

By Steve Roach - http://www.steveroachonline.com

First published in the March 21, 2011, issue of Coin World - http://www.coinworld.com/

Gold reached an all time high on March 2, breaking $1,440 an ounce and hitting $1,441.30 an ounce during the day's trading in the New York bullion markets before closing at $1,435.70.

Silver continued to build on its gains from last week, reaching a high of $35.02 an ounce during the day before closing at $34.68 an ounce.

Unlike gold, which is at an all-time high, silver has some room to go to reach the $50 an ounce that it briefly traded for in 1980 before crashing to $16 an ounce at the end of the year and dropping to less than $5 an ounce in 1982.

In what feels like a broken record over the past month, Mint State generic Morgan dollars, certified by either Professional Coin Grading Service or Numismatic Guaranty Corp., continue to reach even higher prices and trade at substantial volumes.

Dealers are now offering $59 for MS-63 coins, $79 for MS-64 dollars and $155 for MS-65 Morgan dollars. These are relatively steep increases from last week's wholesale prices of $53, $73 and $146, respectively, which themselves were jumps up from the week before.

In wholesale trading, Peace dollars are going for $53 for MS-63 examples, $61 for MS-64 coins and $130 for MS-65 pieces. Just last week they were $46, $54 and $123, respectively.  (Pictured is a MS-65 Peace dollar certified by PCGS, image courtesy of HeritageAuctions.com)

Some major coin shows are approaching that will test the market.

The American Numismatic Association National Money Show, also known as the Midwinter ANA, will be conducted March 17 to 19 in Sacramento, Calif., followed by the Whitman Coin and Collectibles Expo in Baltimore March 31 to April 3.

Some dealers won't be attending the ANA National Money Show because of concern about California's tax laws under which conducting too much business in the state of California exposes dealers to potential tax liabilities.

Tax issues are also threatening the Baltimore Whitman show as current state legislative action may eliminate the bullion and coin sales and use tax exemption for transactions over $1,000, as reported in the March 14 issue.

Nearly all major dealers will be attending at least one of these shows, providing a test to see if the attention precious metals are currently attracting will also increase value perceptions for other aspects of coins.

***

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