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 Monday, November 23, 2009
Feed your inner gold frenzy
Posted by Dave
The Mint issued a memo Friday to its authorized bullion coin purchasers.
What it says is another manifestation of the unusual year we have been seeing in the bullion coin market.
The Mint says it will be selling 2009-dated bullion coins until the end of the calendar year.
Buyers who are looking for a supply will undoubtedly be pleased at the information, because in most years the memo tells buyers what part of early December the Mint expects to run out of the coins of the current year.
Also announced in the memo is the Mint’s intention to begin striking the 2010 coins in January 2010. This virtually guarantees continuing tight supplies.
In normal years, production begins before the change of the calendar year and orders for the next year’s coins are taken just prior to New Year’s and delivered just afterwards.
This procedure helped the Mint meet the seasonal bulge in bullion coin demand. During the first month a lot of buyers simply want to get the new date and it is more a coin collecting phenomenon than a bullion investment phenomenon.
The Mint will now face this higher seasonal demand and the continuing high investor demand with less of a running start than usual.
Short of a sudden large loss in precious metals prices, it would seem that with this new wrinkle buyers will again sense tightening supplies. This is like blood in the water for sharks. It further stokes the demand frenzy.
Monday, November 23, 2009 2:03:23 PM (GMT Standard Time, UTC+00:00) 
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Friday, November 20, 2009
Gold bullion coin shortages again?
Posted by Dave
Word arrived yesterday from Pat Heller of Liberty Coin Service that supplies of gold South African Krugerrands for immediate delivery have run out in the United States.
How long this situation will last is the first question that comes to mind. Surely more coins will be shipped from South Africa to help meet the current demand. We don’t know how long it will take and whether it will be enough.
Also, is this the canary in the coal mind?
Will the world’s more popular bullion coins, the American Eagle, the Canadian Maple Leaf and the Austrian Philharmonic also run short?
Last year the U.S. Mint had to ration gold coin supplies because it couldn’t buy enough blanks to meet demand. It does not produce its own.
The situation improved in June when the rationing ended. However, in recent weeks with new record gold prices, the coin buying gold investors seem to be trying to purchase larger quantities.
Can the Mint meet this demand or will rationing once again return?
Fractional Eagles are due to be offered Dec. 3. Will the Mint’s cupboards be stripped quickly?
Sure, I have more questions this morning than answers, but some days that’s the way it goes.
Thanks, Pat for the quick report on the situation.
Friday, November 20, 2009 2:05:09 PM (GMT Standard Time, UTC+00:00)
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Thursday, November 19, 2009
Will we all live happily ever after?
Posted by Dave
Sometimes there are happy endings. Silver Spring, Md., dealer Julian Leidman said yesterday that much of the inventory that was stolen from his parked vehicle Oct. 11 has been recovered.
All this transpired because the hobby community quickly rallied to his support to get the word out about the theft, what was taken and create an award fund to help find, try and convict the perpetrators.
A tip from an East Coast dealer to Leidman led to the major recoveries, two so far and possibly more to come.
This is numismatics at its best. The nation’s dealers rallied to support a colleague with a reward fund that is well over $160,000.
There is more to come in this story, but for the moment it is simply a good idea to ponder what seems to be a happy ending and try to reinforce behaviors that lead to them, or better yet, to not having a problem develop in the first place.
Thursday, November 19, 2009 2:00:07 PM (GMT Standard Time, UTC+00:00)
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Wednesday, November 18, 2009
Silver ready to get with it?
Posted by Dave
Silver is trading at $18.66 a troy ounce as the work day begins. The question on many minds is can it go much higher?
Unlike gold, silver is nowhere near the old $50 record high set back in 1980. Nor is it near the $24 area that it traded in during the spring of 2008.
I did a story for Numismatic News last week where a couple of market makers in precious metals told me that their was upward resistance at the $18 because so many bought in in 2008 at that level after it had traded as high as the $24 area.
These buyers were apparently thinking at the time that they were getting a deal during a correction.
This year, according to the dealers, they are relieved to be getting out even after holding for a year and a half through a correction that had halved silver’s price from the 2008 peak.
It is also expected that once these nervous sellers clear out, then silver will be ready to pop even higher because of increasing demand for industrial uses and a hardier group of owners who expect silver will do some catching up relative to gold.
I will be keenly watching market action to see if we are reaching that breakthrough moment.
Wednesday, November 18, 2009 2:04:12 PM (GMT Standard Time, UTC+00:00)
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Little reason to pay big price
Posted by Dave
I had an inquiry from a reader who wonders why packaging seems to be such a big deal in recent years.
The underlying value of the set is supplied by the coins in it, right?
This is one of those questions that you answer by saying listen to what I say but don’t watch what I do.
Many collectors would say that indeed the main value factor comes from the coins. However, if you watch trading on the secondary market, you come to the conclusion that such a statement often is self-evidently wrong.
The most recent example of this is the Lincoln Coin and Chronicles Set. You take five coins that were made available in other ways and put them in a special package. There are only 50,000 of those special packages.
Voila, you have a product on the secondary market that is priced at $180 that contains coins that can be purchased for a third to half that amount.
Is the package worth $90-$120?
Hobby thinking is a cross between traditional thinking and a cat chasing anything that moves.
The 1986 cherry-wood box for the Statue of Liberty set was valued at $100 for a time shortly after issue. However, the general commonness of the coins eventually won the battle of valuation and the pretty package did little to augment the secondary market price.
So why do we fall for the packaging issue over and over again? Good question, but the fact that we do gives the Mint that makes them and eBay sellers a nice future income stream.
Wednesday, November 18, 2009 2:02:29 PM (GMT Standard Time, UTC+00:00)
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Monday, November 16, 2009
End of world shouldn't end hobby
Posted by Dave
When I was a kid apocalyptic science fiction books were popular. I read quite a number of them. Just don’t ask me to recite the titles. Most of them I have long since forgotten.
This strand of thought, that of gallant survivors, wove itself into apocalyptic economic writings in the 1970s. The dollar was going to be destroyed. Society would break down. Gold was a good investment to protect yourself.
Gold soared from its price-controlled $35 an ounce in the early 1970s to $850 a troy ounce in January 1980.
It wasn’t a straight shot higher. When it reached roughly $200 at the end of 1974, it then fell by roughly half and then resumed its climb in 1976.
This price movement had a strong impact on numismatics.
The apocalypse did not occur in the 1970s. Life went on. The price of gold eventually declined.
We are living in another period where the destruction of the dollar is forecast. Gold is soaring. It is having an impact on numismatics.
The weekend box office results of the movie “2012” seems to indicate that apocalyptic fiction is again in fashion. I haven’t seen it yet. I expect I will. It will make me feel like a kid again.
I don’t know how long this sort of thing will remain popular during the present cycle, but I do know that the longer gold continued its rise in the 1970s, the more some confused it with the essence of numismatics itself.
That is a mistake. It is an easy one to make, but it is an mistake nevertheless. Because at the end of gold’s last cycle, some became so disappointed with “numismatics” that they left the hobby.
Don’t let the need to consider asset preservation strategies overwhelm the collector impulse. By doing so, a relaxing hobby involving life-long learning and a method of getting your mind off troubles, gets turned into a tension-wracked vigil of market fluctuations.
The fun of disaster fiction is the escapism element. Keep that escapism element in your hobby, too. Just don’t mix the two together.
Monday, November 16, 2009 2:15:57 PM (GMT Standard Time, UTC+00:00)
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Friday, November 13, 2009
Extra issue heads towards readers
Posted by Dave
This has been an unusually busy week because it was time for the State of the Industry issue of Numismatic News to go out the door. This extra issue was produced almost simultaneously with the regular weekly issue that went to press yesterday.
The staff here is having a celebratory pizza lunch to mark the occasion of getting both issues finished, among other things.
Though it is nice to share pizza, but the more important aspect is I anxiously await reader reaction to what we have done. The special extra issue, which is dated between two regular weekly issues, is intended to provide a bird’s eye view of what’s going on in the minds of dealers, collectors and leaders in numismatics as 2009 comes to a close and the prospects for 2010 are evaluated.
Aside from confusing the mailman with cover dates of Nov. 17, Nov. 20 and Nov. 24, with the date in the middle being the Industry issue, I hope readers will get a sense in that Nov. 20 package of what the decision makers are thinking as we move forward.
It is not a blow by blow account of what went on in 2009. It is not an almanac. It is intended to create a sense of awareness among the readers of the tone of numismatics.
Are we looking ahead to better days or are we headed for trouble?
I hope a majority of readers gain a useful sense of where we are from reading it.
I know it will not be universally praised, because nothing ever is, but I expect it will be better received than last year’s issue because it will be less of a surprise and not quite so unfamiliar.
One reader last year cancelled his subscription to Numismatic News because he did not perceive it as an extra bonus issue but as some sort of prototype issue for every single issue to follow.
That’s the risk you take for trying something new.
So subscribers should watch for it. Let me know what you think about it and what you are thinking about for next year.
Friday, November 13, 2009 2:11:49 PM (GMT Standard Time, UTC+00:00)
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Thursday, November 12, 2009
Sink my teeth into history
Posted by Dave
I am late, I know. While the rest of the hobby was focused on the debut of the fourth Lincoln cent design for 2009, I was sitting in a dentist’s chair talking to the dentist about my next crown.
While it is wonderful to have a middle-aged memory, I can’t say the same thing about having middle-aged teeth.
I would much rather have been at the Ulysses S. Grant Memorial on the west front of the U.S. Capitol Building in Washington, D.C.. It would have been more interesting and a much more pleasant experience.
Mint Director Moy said this morning, “The fourth and final 2009 Lincoln Bicentennial one-cent coin design evokes the historical challenges of Abraham Lincoln’s presidency.”
Good point, but today I am thinking more about the 16th President’s teeth. There is a lot about George Washington’s teeth out there, but not about Lincoln’s.
Who cares about teeth? You are right. I’ll be better tomorrow.
Thursday, November 12, 2009 4:17:56 PM (GMT Standard Time, UTC+00:00)
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Wednesday, November 11, 2009
Buffalo proof sales taper off
Posted by Dave
The latest weekly sales figures for the 2009 proof one-ounce Buffalo gold coin show that the rate of purchase by collectors has dropped substantially.
Some 8,487 were sold in the first full week of sales following the three-day onslaught that saw collectors scramble to acquire 19,468 pieces as sales began.
The total amount sold so far is 27,955.
By the end of the year will we see 40,000 or 45,000 of these coins sold?
It is probably too early to presume to know what the final sales numbers will be, but it probably isn’t too early to think that whatever the final number is, it will be significantly below the final number for the 2009 Ultra High Relief Saint-Gaudens $20, which is currently at 103,764.
If the Buffalo numbers run roughly half of the UHR numbers, will the coin be valued at a higher price than the UHR coin in future years?
Probably not.
Mintages are not the only factor in determining value.
Collectors forever onward will consider the UHR a desirable type coin and demand as a consequence will likely be forever higher than that for the 2009 proof Buffalo.
After all, if you want the type, you don’t have to buy the 2009 Buffalo, you can buy the proof 2006, 2007 or 2008, but you do have to buy the 2009 UHR.
Wednesday, November 11, 2009 2:12:28 PM (GMT Standard Time, UTC+00:00)
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Tuesday, November 10, 2009
Fourth Lincoln in pipeline
Posted by Dave
The U.S. Mint’s production facilities returned to the usual monthly pace of production in October.
Some 353.38 million coins were produced, a rate that has been adhered to most months this calendar year.
The Philadelphia minting facility cranked out 200,000 half dollars to match last month’s Denver cumulative total of 1.9 million pieces. Denver did not add to its half dollar total and it still stands at 1.9 million coins.
Cent production indicates that there are 266 million of the new Presidency cents in the pipeline as the Nov. 12 debut ceremony nears.
There were 144.4 million Denver coins struck while Philadelphia cranked out 121.6 million.
Those online speculators who are selling nickels and dimes will be pleased to see the Mint’s coining presses were quiet in October where these denominations were concerned.
There also were no Native American dollars produced in October.
Presidential dollars on the other hand saw 24.22 million pieces flow from Denver presses and 10.78 million from Philadelphia’s.
The rate of quarter production more than doubled in October from September’s level, but this was simply to return to the rate of output that was achieved in August.
Denver cranked out 20.4 million quarters and Philadelphia produced 32.2 million in October.
Overall there is little sign in these numbers of a revival in coin demand to feed American commerce.
Tuesday, November 10, 2009 2:13:55 PM (GMT Standard Time, UTC+00:00)
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