The globalization of the rare coin market

By Steve Roach - http://www.steveroachonline.com
First published in the October 10 issue of Coin World

The rare coin market continues to expand globally, while closer to home the fall coin show season is in full swing.

For sure, it’s been a busy month for the coin market. The Long Beach Coin, Stamp and Collectibles Expo was held Sept. 8 to 10, and the next weekend the Whitman Philadelphia Coin and Collectibles Expo took place.

Just a few weeks later is the inaugural American Numismatic Association fall National Money Show, set in Pittsburgh Oct. 13 to 15. The coin market then gets a much-needed breather until the Whitman Baltimore Expo, Nov. 17 to 20.

It’s been a huge few weeks for coin auctions with more than $115 million being sold at auction in the past six weeks, including $71 million sold at the summer ANA auctions in August, $34 million at the Heritage Long Beach auctions, nearly $6 million at Larry and Ira Goldberg Auctions pre-Long Beach sales and $4.5 million at the Stack’s Bowers Galleries Whitman Philadelphia auctions.

The Stack’s Bowers auction saw strong prices for numerous early American pieces that saw bidding that went beyond the realm of the specialists, including a rare 1781 Nathanael Greene at Eutaw Springs medal with documents from the Continental Congress on its presentation that sold for $86,250. Its strong price again confirmed the importance of provenance to today’s collectors.

Also noteworthy, the Heritage world and ancient coin auctions at Long Beach realized $20.4 million, showing the increasing globalization of the rare coin market and the ability of U.S. based coin firms to reach beyond U.S. coins to expand their bidder pool.

Equally impressive is that Heritage noted a 97.74 percent sell-through rate by value — meaning that the top lots found buyers.

Among the rarities changing hands was a legendary Marcus Junius Brutus Ides of March silver denarius, which sold for $546,250. It is undoubtedly among the most famous ancient coins, with a recognizable design that transcends the rare coin market.

As bidders continue to compete for a finite number of rarities, the most logical way for the coin market to expand and for prices to increase is by enlarging the pool of bidders. The global expansion of the coin market will hopefully bring more deep-pocketed international buyers into the U.S. coin market.

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 who writes on legal topics involving fine art and collectibles, 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

Provenance matters when valuing rare coins

By Steve Roach - http://www.steveroachonline.com
First published in the October 3, 2011, Special Edition issue of Coin World

Coin collectors love knowing the provenance — or the ownership history — of the coins in their collection.

An original Proof set offered at the Sept. 8 to 9 Heritage auction at the Long Beach Coin, Stamp and Collectibles Expo in California provided collectors a rare chance to acquire pieces from a nine-coin set that was purchased from the Philadelphia Mint in 1910 and passed down in the same family through the generations.

According to Heritage, the set was purchased by a Mint employee with the last name Wesson, who left the set to his grandchildren. These coins were passed down to the consignor who offered the coins as individual lots, each graded by Numismatic Guaranty Corp.

For a Proof set including gold coins to stay intact for more than a century in generally high grades is rare, and the set offered something for collectors of more modest budgets as well as coins appealing to the monied set.

Three pieces sold for less than $500 each: a Proof 65 1910 Liberty Head 5-cent coin and a 1910 Barber quarter dollar graded Proof, Environmental Damage, each sold for $460, while a Proof 63 Barber dime sold for $488.75.

The noted “environmental damage” on the quarter dollar is perhaps a consequence of the set’s original storage method — a paper envelope likely high in sulfur that reacted with the silver over the years.
A Matte Proof 1910 Lincoln cent graded Proof 64 Red and Brown brought $862.50 and a Proof 64 Barber half dollar sold for $1,322.50.

It was the gold coins that made the set special, and their “freshness” to the market, combined with their quality and documented ownership history, produced very high prices for these four admittedly rare issues.

A Proof 67 1910 Saint-Gaudens $20 double eagle realized $161,000, a 1910 Proof 67 Indian Head $10 eagle brought $138,000, a 1910 Proof 66+ Indian Head $5 half eagle brought $77,625 and a Proof 64+ Indian Head $2.50 half eagle sold for $27,600.

Collectors now covet “Roman Finish” Proofs of 1909 to 1910, as they mediate between the dull Matte Proof finish of the prior several years and the brilliant reflective Proofs of the 19th century. These “Roman gold” coins demand connoisseurship from today’s collectors and they have been called an acquired taste.

Contemporary audiences were resistant to purchase Roman Finish Proofs from the Mint, and the Mint melted many of the examples it struck. While the Proof 1910 double eagle has a published mintage of 167 examples, many were melted, and today, less than half of the original mintage is available for collectors to purchase.

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 who writes on legal topics involving fine art and collectibles, 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

Even as silver market soars, ATB 5-ounce quarters cool off

By Steve Roach - http://www.steveroachonline.com
First published in the September 26, 2011, issue of Coin World

As bullion continues to soar, one series whose fate is tied to silver comprises the America the Beautiful .999 fine 5-ounce silver quarter dollars.

The Mint offers two versions of each issue: bullion examples that are available to authorized purchasers at a $9.75-per-coin premium over the price of silver, and Uncirculated collector versions that receive a “vapor blast” finish, have a P Mint mark and are sold individually by the U.S. Mint directly to collectors.

The release of the 2010 bullion pieces at the start of this year caused a frenzy at the Florida United Numismatists show in January, as the Mint had announced that only 33,000 sets would be produced. A handful of authorized purchasers sold the five-coin sets for around $950 to collectors, the dealers hindered by cumbersome restrictions set by the Mint regarding the distribution of the sets.

At the FUN show, five-coin sets were selling for as much as $2,700, with a wholesale market of $1,800 to $2,000 that lasted for the next month, falling to the $1,500 level by mid-February. Prices have settled at that level today, although as the price of silver has increased from $30 in February to around $42.50 as of Sept. 8, the premium over bullion value has shrunk.

The Mint has increased mintages for the 2011 ATB 5-ounce bullion coins to 126,500.

The 2010-P Hot Springs 5-ounce coin was the first collector version offered by the Mint. Sales began on April 28, with a mintage of just 27,000 and a price of $279.95. These coins took more than a week to finally sell out and collectors complained about ordering problems.

A modest secondary market for the Uncirculated Hot Springs issue has emerged, with examples selling for as much as $400.

The 2010-P Mount Hood National Forest collector 5-ounce coin went on sale July 28 and ordering limits were removed Sept. 6 as coins from the mintage of 27,000 remain available.

Collectors are no doubt considering the cost involved in keeping the set — which will eventually grow to 56 coins by 2021 — current, as well as the hassle in buying the Uncirculated collector coins individually from the Mint.

One hopes that the Mint will continue to work with the mintage levels and ordering mechanisms to make the coins more attractive to collectors going forward.

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 who writes on legal topics involving fine art and collectibles, 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, silver bullion keeps driving rare coin market

By Steve Roach - http://www.steveroachonline.com
First published in the September 19, 2011, issue of Coin World

Bullion continues to drive the market, and the U.S. Mint’s recent repricing of many of its precious metal coins directly and quickly impacted the secondary market.

For Proof American Eagle silver bullion coins, the Mint’s price increase from the June 30 issue price of $59.95 to $68.45 on Aug. 29 sent secondary wholesale market prices for 1986 to 2011 Proof American Eagle silver coins soaring from $56 to $66 over just 48 hours.

Secondary market prices for Proof American Eagle gold bullion coins have also risen as primary market prices increase, supplies shrink, and rumors continue to circulate that the Mint may shut off the supply of Proof 2011 issues as it did in 2009

The last days of August were rough for gold, as it fell nearly $200 an ounce several days
after reaching an all-time high on Aug. 22 at almost $1,900. It rebounded on Aug. 26 to $1,830 an ounce, then dipped below $1,800 an ounce on Aug. 29.

Silver had larger percentage drops in price, falling from a high of $43.72 an ounce on Aug. 22 to $39.14 on Aug. 25.

At the recently completed American Numismatic Association World’s Fair of Money, many dealers with brick and mortar storefronts complained of losing business at the show by not being home at their stores.

Shop owners are the busiest they have been in a decade, as the public seeks both to liquidate gold and silver coins and jewelry and to perhaps purchase some gold or silver coins as an investment.

As increased pressure from non-numismatic gold buying storefronts lowers coin and jewelry shop profit margins in some communities, fast gyrations in precious metal prices can have a big impact on a dealer’s bottom line, especially if he or she is already working with relatively small profit margins on scrap/bullion metal purchases.

Platinum found a new three-year high at $1,900 an ounce Aug. 22, as investors realized that platinum — which is rarer and this generation has been more expensive than gold — was priced at the same level.

For example, May 23, 2008, platinum was near its all-time high at $2,170 an ounce while gold on that date was at $924 an ounce. A key difference is that gold is considered a safe haven while platinum demand stems in large part from its many industrial uses.

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 who writes on legal topics involving fine art and collectibles, 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