Numismatic price vs Bullion value
 

It was not too long ago that common date $20 St Gaudens were fetching retail prices around $800, which was about 100% above the bullion value at the time. And this was considered "numismatic" price. Today, the bullion value alone is about $1100. Why aren't numismatic prices $2200?

Same thing goes for Morgan silver dollars. Numismatic premiums are not keeping relative pace with increases in bullion value. Silver went from $4 to $17, a 425% increase. But the spread between numismatic value and bullion value has actually decreased. Common date circulated Morgans could be had for $8 when silver was $4... a $4.91 premium on silver content, or 123% of bullion value. Today's prices are about $15 for the same coin that has bullion content of $13.20. A $1.80 premium, or only 12% higher than bullion... about 1/10th of the old numismatic premium.

Are we about to witness another melt down of coins? Many could soon be worth more as metal than as collectibles if this pace keeps up.

When would you expect numismatic prices to begin to increase faster than bullion value?

Re: Numismatic price vs Bullion value
 

Exactly why myself and countless others got out of our Saints or whatever coins long ago once we studied sites like this.
UNLESS you LOVE nuismatics, you don't get the bang for the buck than if you just invest in the bullion value itself.

Re: Numismatic price vs Bullion value
 

Actually mint state classic gold and some AU has outpaced bullion in the last few years

Re: Numismatic price vs Bullion value
 

I can't think of any reason to expect a direct correlation between the bullion and numismatic markets. There are numi fractional oz gold coins with valuations in the $10's of thousands, it's quite easy to see that the value is based on something totally other than spot bullion price.

The value of non-numi coins such as circulated sovereigns is certainly related to spot.

In boom times where there is a lot of money floating around looking for investments.

Re: Numismatic price vs Bullion value
 

As I see it, the numismatic price is not tied to the bullion value beyond that of the PM content being a base or a floor value. They are really two independent functions that add up to the total price.

Take your $800 St. Gaudens example. Let's say the gold value was $400 and the numismatic premium $400 at the time. Today, that coin goes for about $1,385, of which $1,085 is bullion value. That would mean the numismatic add-on is now $300. So, yes, that portion of the value actually went down. You would have still salvaged a nice profit due to the rise in gold, just not as much as you might have.

No doubt, you would have been better off, in this circumstance, putting the the whole $800 into bullion. On the other hand, take a collectible with no intrinsic value that cost $400 back then, but is now worth only $300. Now you're looking at a net loss (and let's not even talk about the stock market!). Holding that St. Gaudens wasn't the best thing you could have done, but it certainly wasn't the worst.

To me, that dual-value aspect of pre-33 gold was always one of its beauties... a hedge within a hedge. I'd bet if you track the value over the years you can find points in time when the gold value was down, but the collectible premium up. Mind you, though, I'm not sure I feel as strongly about the validity of that double-whammy theory at this moment.

People are running to PM's in an attempt to protect wealth. They are not, as far as I know, running to collectibles to do the same. In fact, in hard times I'd imagine a lot of people tend to unload their collectibles (of all sorts) in favor of hard assets with more tangible value... or maybe in favor of just putting food on the table!

In this case, there could also be specific factors at play, like a realization in the marketplace that common date St. Gaudens are not as rare as we might have once been led to believe. Still, I think the state of the economy is enough to do the trick by itself.

Re: Numismatic price vs Bullion value
 

Gee years ago I bought many gold eagles, maples, and krugs at around $300 each. (100 were $280 each) Now they are...? (around $1200 each ish)

Same time bought many many wrong graded MS60 saints at $350 ish each and sent them in:

30% were PCGS MS65
40% were PCGS MS64
25% were PCGS MS62
5% were PCGS MS62

so IMVHO many more than 10 of my saints hit a ten banger (1,000%) and will DO it again and again & again - the PHYSICAL bullion coin gold, well it went up as a four banger (400%) at cost.

Use your head and front run all gold & silver...

Re: Numismatic price vs Bullion value
 

Not all Saints, Morgans, etc. are true Numismatic coins. There are many common dates that are worth little more than spot. These are semi-numismatic.
However there are many key date and low mintage dates that have increased dramatically in this period.
Especially Carson City minted coins. They all demand a great premium.
:smile:

Re: Numismatic price vs Bullion value
 

OR we bought our Saints very close to bullion price.........**w**

Re: Numismatic price vs Bullion value
 

Numismatics are generally insulated from the heavy swings in the metals markets, both up and down. If you had an $800 Saint when gold was $400 and gold fell to $200, the saint wouldn't have gone to $400, it would have leveraged somewhere around $600 most likely. In the example given by the OP, the numismatic piece was insulated against a huge rise in gold, but don't forget it does the same thing when gold drops, i.e. numismatics won't drop as fast.

Re: Numismatic price vs Bullion value
 

Real numismatic coins are not influenced by spot value, IMO. Those that are, are semi-numismatic at best.

Re: Numismatic price vs Bullion value
 

you make a strange conclusion to only look at common dates....try looking at key dates and rarities, then post back your comparisons of % gains.

Re: Numismatic price vs Bullion value
 

Seems that the people usually BUY the common dates "first" and they are the ones that really rise with investor/collector type buyers first and foremost.

They have been that way since 1999 for me, anyway.

I have three SAINT $20 chart books (2001; 2005; & 2009) from CDN/Greysheets (google it to obtain ONE) that show the performance way back.

If you have a rudamentary knowledge of technical analysis (read Technical Analysis From A to Z by Achells - try the library or Amazon - Jim Sinclairs first recommened textbook on T/A) THEY all show that NOTHING IS REALLY NEW under the sun. However I do appreciate the knowledge of what happened prior as I'd be like foolish little child by not studing the past.

Good hunting, protecting, collecting, and really INVESTING to save you principal that you worked all your life to get right here right now.

Enjoy some the gains and really have JOY, :yes:
HS

In the future probabliities I suggest you study this too:

http://www.gold-eagle.com/gold_diges...sky030210.html

"There is a WAVE of INFLATION coming from Bush's doubling and Obama's trippling of the money supply that's gonna scare the :s10: HECK out of ole HS."

Re: Numismatic price vs Bullion value
 

My experience has been different. Picking the 1937 to 1952 series of Canadian cents as an example, common coins in 10 years or so have gone from around $40 to in the $100 range in MS-65. The non-variety key, the 1944, has gone from $500 to a peak of around $6000 (a PCGS example sold at auction for about $6600 a little while back, while in the early part of the decade an identical coin hammered down in New York for under $400). The price has settled closer to about $3000 now, but it's still a tremendous gain.

People may go for common dates first, but when it comes time for bidders to get serious at auctions, it's the rarities and really key coins that set records and surprise people, IMO. I don't think this is at all an unreasonable observation, and the economic "downturn" has shown that while demand drops off for easier, common stuff, the truly tough coins remain in demand, and the prices realized when they come up for sale reflects it.

Re: Numismatic price vs Bullion value
 

COMMON dates Just IN GOLD $20 Saints sell first to the investor/collector types. And you are 100% right above with the general coin market; and the big priced $20 gold coins do surprise people because the very few rich people are looking for ways to buy expensive unique rare antiques that are inherent wealth pieces too.

However, the common dates $20 saints and to a lessor degree liberties have the thousands and thousands of coins in AU50 to MS65 to satisfy the collector/investors with inherent worth coins. And quite frankly, they do sell first and foremost to the investor/collector. Back in 2000 they were around $300 to $350 for a nice coin that brings a retail of $3000 today.

Again you are right.

Re: Numismatic price vs Bullion value
 

Attachment 89455

I collect Canadian Sovereigns, $5, and $10 pieces and LOVE them.

Here's a few of the $5 ones.

Re: Numismatic price vs Bullion value
 

Here's an OLD $10 one for fun: thinking about a re-submit and getting a
MS64 Old Green Holder and all....

Attachment 89457

Re: Numismatic price vs Bullion value
 

What I plan on doing is riding the bullion bull until the point where it swamps the numismatic coin values and then switch my bullion into the numismatic coins and ride that bull market for a number of more years.

Re: Numismatic price vs Bullion value
 

Some very nice pieces, HS. If the US market ever catches on to the relative scarcity of Canadian stuff, it could totally change the game. Our main Canadian grader ICCS has graded just 6 of the 1913's at 64 with none higher, as an example. I'm not sure how the PCGS pop compares off hand, but to get to that level of exclusivity with US coins gets prohibitively expensive for most collectors.

More questions
 

There are some great responses above. Thanks!

The best information, IMO, was regarding the contrasting characteristics of "numismatics" and "bullion" coins. Condition and scarcity seem to only apply to numismatics, whereas interest and liquidity apply to both bullion and numismatics.

I have a few other questions:

- What factors will cause a high rate of price appreciation in numismatics? You can't really change the population of coins in particular grades (without damaging high grades coins to make them lower grades), so the only other ways to affect price would be interest and liquidity. With liquidity really being a reflection of the coin market in general, then interest becomes the most important factor which influences price... So, in other words, how can interest in numismatists be positively influenced?

- How can we quantify the level of interest in a coin before price is determined? Obviously, we can do this in reverse, by looking at price and then measuring the relationship of scarcity and interest (supply and demand). Another way to look at this is, how can we quantify numismatic price given certain levels of supply and demand?

- In the 60's when Coin World cam onto the scenes in numismatics, there was a huge pick up in the coin collecting hobby. Disinterested people suddenly became interested, and the population of coin collectors increased. With this increase in demand, and a relatively fixed level of supply, the price of numismatics coins really took off. Can this same thing happen again? Can there be a resurgence of interest in the hobby? What would cause this resurgence?

Thanks!

Re: Numismatic price vs Bullion value
 

Take a look at this rare coin price chart Market Harmony. In it you can see coin prices rose along with bullion up until the 1980 top. Then both came down when the bull in bullion ended. Then the rare coin market reversed course in 1982 and went on a seven year bull run while bullion was in a bear market. Why? Because rare coins became even rarer since many were sold and melted for bullion value during the bull run. I believe a similar situation will happen this time around also. JMHO

Re: Numismatic price vs Bullion value
 

coins got hot in 1989 because WALL STREET rumors were rife.

COINS (GOLD BIGGIE ONES) will do it again because of all the MONEY down

T
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signature....

Re: More questions
 

Appreciation of numismatics will either be the result of an influx of new collectors, or of people looking to park wealth in a tangible asset and thus driving a price bubble (speculators more than collectors, in that case).

The best answer to your second paragraph is: by gauging what it is that collectors want but can't find. There are any number of coins at certain grades that I would buy at full book value in a heartbeat - but they just don't come up for sale. If you find yourself in this position, trust that others do as well. There is no shortcut on this one, you just have to have your feet on the ground and get a feel for it. When these coins come up for sale, they don't really jump up in price so much as the new price just more accurately reflects the lag in supply to meet the existing demand.
Demand for such coins may remain high, but due to a lack of turnover, prices will stagnate.

Can a new surge of collectors happen again? Yes, but it will be harder than ever to make it happen. We live in a world of nearly endless digital distractions, and coin books and albums may seem pretty archaic to a lot of younger people today. All we can do is try to connect with people and let them try it out and decide for themselves. Collecting needs to appeal to the young people more than it currently does if the hobby is to expand, end of story. When I go to shows, I am quite a bit younger than most, and at 31 years old I am not exactly a kid myself.

Re: Numismatic price vs Bullion value
 

That's a great chart and I thank you for leading me to the resource.

I don't think that many numismatic "rare" coins will be melted. Unless Grandma decides to send something off to a refinery directly, there are too many eyes which will see a rare coin come come out of hiding. Melting will skew the availability figures for the common coins... 1930's+ silver are basically bullion, with a few exceptions. The mintage figures and availability figures won't be the same. These coins aren't going to be anything other than bullion until it comes to the point when many folks want to put together sets of AU/BU Roosevelts, Washingtons, and Franklins and realize how hard it is to come by a certain date/mint... then numismatic prices will overtake bullion price.

Re: Numismatic price vs Bullion value
 

I read your article on CAC, and it seems that the interviewee was telling us all that Wall Street is around us. When we see news of them claiming their numismatic holdings, then we need to sell ours

Re: Numismatic price vs Bullion value
 

The canadian coins look so beautiful

Re: More questions
 

What I was referring to was a little different, but your point is well taken. What I meant was that supply is fixed, but demand is not. If you chart Supply and Demand simultaneously on a chart, then the intersection of the 2 lines is called, Price Equilibrium. But price equilibrium is not known unless you can quantify both supply and demand. We know that supply is fixed, but if we were able to quantify demand, then we could calculate for price. And with this in mind, then we could theoretically chart prices to be expected if we could estimate the growth rate of demand. Admittedly, none of these figures are concrete. Which is why this falls in the realm of fuzzy math. But a model could be constructed which would give us an answer to the question: "If interest in the hobby increase 20% from current levels, then how much can we generally expect prices to increase?"

Young people are good for the long term, but few of them have money. Personally, I wasn't interested in coins until I had money and was looking for ways to invest it. Then it became a passion to collect, and this grows in me all the time. Expansion of the hobby won't necessarily come from young people. I think you've hit on another great question, however...

What demographic of the population will support or grow the numismatic hobby the most? And this could also be divided into time-frames. i.e. in one year, in 5 years, in 20 years, etc.

Thanks!

Re: More questions
 

I see what you're saying. In that case, all we can do is hypothesize. The actual breakdown of appreciation in specific segments is nearly impossible, but a broad spectrum estimate could in theory be made.

A good point as well. When I was younger, I didn't have a lot to spend either, but the underlying interest in the hobby eventually came back to roost when I had a little more to spend and re-ignited my interest. I'm not so much concerned with the actual spending of money by youth, as much as introducing them to coins so that they, like myself, might re-visit the idea when they are a little more financially secure, and find enjoyment in it.

What demographic will support the hobby the most? Without being too blatant on this point, older white guys with some dollars to spend, as you alluded to, and as is the case currently. I don't expect that to change.

Re: Numismatic price vs Bullion value
 

If you have 100 ounces of gold in bullion form like a Gold American Eagle NGC will slab them for you as athentiic for around $5 each.

Mimimum is 100 ounces per order.

:bull-smile:

Re: Numismatic price vs Bullion value
 

When will "slabbed" slabs hit the market. We need assurances that all of these existing slabs aren't Chinese counterfeits! :36_1_25:

Re: Numismatic price vs Bullion value
 

When the GREAT PRETENDER shows his birth certificate on NBC CBS ABC CNBC
and GIM... I guess...:111:

Re: Numismatic price vs Bullion value
 

Does that mean that you can't have absolute faith that a slabbed coin is genuine? :banghead:

Re: More questions
 

Interesting topic.

I'm not sure that you can really know what supply of any numismatic coin is.
You may be able to look up the number of coins minted, but that will not determine supply available for sale. We actually have no way of knowing how many coins are still even in existence, let alone at what price they will become available for sale.

Re: Numismatic price vs Bullion value
 

Population is always one thing that can rise and the prices then actually go down a tad.

However, if your coin is over 50 years old and NOT some popular KEEPER you have a better chance of some slow rise.

Study the MINT numbers and PCGS and NGC numbers.

DYODD even on modern coins older than 10 years.



I really like the LOUSY SPOUSY for appreciation. shaddowstats.com just said if the FED blows it like in 1980 - gold will easily hit $7,500.00 per troy ounce.

Imagine buying a lousy spousy for say, $650 now and selling it for $3,000.00 in a few years.

:wavey: