GoldFinger1969

On 10/29/2023 at 8:15 AM, J P M said:

Many buy a classical minted coin thinking they can always sell it for bullion price. But then it is always worth a bit more than melt you say. Also you may fall in love with it and never sell it. If you buy a bullion coin that is it's intent. You may also fall in love with it but maybe not as much that you can't part with it .

The problem is the starting premium to bullion for some investment-grade coins, JPM.  As an extreme example, MS-65 Saints were selling for $3,500 in 1989-90 when gold was under $400 ounce. 

As my chart shows above, when gold fell in the late-1990's as the Tech Bubble in stocks continued and gold fell under $300/oz....the premium for Saints was "sticky" and prices fell less and/or rose -- the premiums ROSE.  Maybe they were signalling that gold was about to rise and reverse higher....maybe they were saying that dealers wouldn't sell Saints at a loss and would wait it out....whatever....but the premiums were simply too high and ate into future returns relative to buying spot gold which went up 6-fold in the next 8 years whereas Saints and other gold coins for the most part didn't go up more than double or triple.

On 10/28/2023 at 1:41 PM, World Colonial said:

If the price of gold takes off, I'd rather buy AGE or similar type than any bullion type US classic gold which includes the common Saint dates in MS-65.

Ironically, you are correct. 

I went back and found that if you got the direction of the (upward) gold price correct the best move was to buy bullion coins, NOT quasi-numismatics which in THEORY have more leverage to a multi-year move in gold but in fact are OVERPRICED at the beginning of the move (huge premium to gold price) and then get hit from a LOWER PREMIUM once gold makes its move.  You have to LIKE THE COINS to make a case for buying quasi-numsimatics or pure numsimatic Saints or other gold coins, it appears.

You can see that the premium over gold content was HUGE when the absolute price of gold was lower and beginning to make its move.  Of course, if the move in gold peters out, then you end up buying very overpriced gold coins, like paying $3,500 for an MS-65 Saint in the 1990's with a premium of close to 1,000%. 

On 10/28/2023 at 9:08 AM, World Colonial said:

What you are describing are bullion substitute widgets, though US collectors and "investors" have convinced themselves it differs from any number of actually somewhat less common "world" gold. As "investment", I'd rather own AGE or similar substitutes.

The charts -- and my post -- were refencing Saints or similar coins with maybe 20-30% numismatic value:  not pure gold, but not a multiple of gold, either.  I think the charts for MS-65 and MS-62 capture it well (62 is just above or at the level of a bullion coin).

On 10/28/2023 at 9:08 AM, World Colonial said:

What is the current premium and how does it compare to somewhat recent history?  (Last 20 years or near it.)  I don't track it, since I'm not looking to buy it.

I was referring to premiums on investment grade coins, not bullion coins, like MS Saints.  Here's a few charts that show you the premiums:

HC, what happens to the price at MS-66 or MS-67 -- huge jump ?  Or no coins with those grades ?

Back Over $2,000 an ounce..... anybody trying to claim gold is moving up (or down) in regards to stocks, rates, or geopolitical pressures can find the relationship reverse in a blink. 

But on a LONGER term basis....gold continues to hang around $2,000...it may lay here for a few more months....or years....but I continue to look back and think that folks will be talkiung about $2,000 common Saints/Liberty's and $2,500 MS-65's as the Good Old Days when gold is closer to $2,500 or even $3,000 and those prices for the coins are up 50% or more.

Premiums are "historically" low so those could expand too for investment-grade coins.

On 10/27/2023 at 8:30 PM, Henri Charriere said:

Well, without a single objection from any chat board member, I did the unthinkable:  I not only contacted the seller. I confronted him, asking him point-blank: "....what is the Fair Market Value of this item?"  With 12 hours remaining on the clock, I received a sugary reply structured more to convince eBay that the sellers -- while keeping the listing intact -- would convene a dealer's sit-down, post-haste, to review the price -- $1900. for a 1906 20-franc gold rooster NGC-certified at MS-63: an unwarranted sum -- grade- and census-wise -- and get back to me. But the seller did what any true certified price-gouger would do: he simply sat back, and let the remaining grains of sand run out of the week-long sand clock.  And the 1906 gold rooster? It was apparently re-listed as a fresh new item -- at the same unreasonable price.  

With Google and the Internet, quite frankly asking "what is the fair price for an MS-63 1906 20 Franc Rooster ?" should give people a good number to work off of that is nowhere near $1,900. 

I see high prices all the time -- but on the order of 20-25%% or so -- on GC for Saints.

On 10/27/2023 at 10:19 AM, RWB said:

Get you head out of the Alabama muck! It is about greed, churning re-submissions, and selling labels. It might not be planned in the technical sense, but it has little to do with "taste."

I think it happens also at grade levels where the monetary benefit is minimal.  Just gets less much notice.

Does anybody care if a common Saint is graded AU-53 or AU-55 ?  Probably not, $$$ value the same.

On 10/26/2023 at 8:18 PM, VKurtB said:

Like many things in numismatics, gradeflation will ebb and flow over time. It really is an unintentional phenomenon. It is actually about changes in taste over time.

True....but I think it's most egregious at price inflection points, as was shown in the Franklin thread.  The fact that it happens right around price jumps can be very upsetting to those who lost out.

On 10/26/2023 at 3:47 PM, RWB said:

When EF coins are given and "official" designation of "AU" -- what can one think? 

To me.....a high-EF coin slipping into the lower ranks of AU is not as egregious as a solid MS-63/dubious-MS-64 getting an MS-65 or God Forbid an MS-66 grade.

Newcomers, you may want to check out the "Franklin Gradeflation Thread" ATS.  Very instructive.

He may know tokens, but he knows nothing about monetary policy, the Fed, or central banking.  Conspiratorial to the nth degree.  Assuming it's who I think it is ATS. 

On 10/25/2023 at 4:23 PM, Henri Charriere said:

I don't think so, but then again none of those comparatively small countries boasted the population or development during the onset of the Industrial Revolution that would justify continual mintage of large denomination gold coins.

Excellent point.  Britain was the world's defacto banker and London the financial center so I suspect their coins (i.e., sovereigns, Crowns) were struck in good numbers, supplied with gold from all over the British Empire.

On 10/24/2023 at 1:13 PM, zadok said:

...their r several gold issues that fall into the same boat (or coop if u prefer)...Netherlands 10G, Belgium 20F, GB sovereign, France 20F, Swiss 20F, Austrian 20F, Hungary 20F to name just a few...basically u can play with bullion n collect for free, assemble sets in unc grades for bullion prices n if want to invest just buy the top pops....

I think what they all have in common is NONE were minted in the volumes of U.S. gold coins, esp. Double Eagles (Liberty's and Saints)....and none survived to the extent those U.S. coins did, right ?

Does anybody know if from 1850-1933 any country REGULARLY struck a 1 ounce gold coin comparable to our DEs ?  I don't think so -- Britain ?

On 10/25/2023 at 9:36 AM, zadok said:

...i listen, sometimes i learn, mostly i have more questions...my unfounded thoughts, both stocks n bonds just seem to be too easily manipulated n r reactionarily inconsistent? stocks seem to be overly influenced by the large hedge funds? bonds seem to be overly influenced by political bias?

No, don't believe the hype from some Gold Bugs I debate here and there.  Yes, stocks are sometimes volatile for no reason (i.e., Flash Crash); other times, they are volatile FOR a reason (i.e., 2020 Pandemic).  Hedge funds are a bogeyman.  They do dominate trading and especially high-frequency trading (haven't heard much of that lately....hmmmm).  But like Warren Buffet says....in the short-term, the stock market is a voting machine, in the long term, a weighing machine. 

On 10/25/2023 at 9:36 AM, zadok said:

bonds seem to be overly influenced by political bias? why do we believe that US markets r world markets? markets, gold, oil other benchmarks should have a defined relationship that is predictable? things that u cant pick up n hold or trade for other things seem more like blind faith? certain things that r essential to life r the only real things all else is perceived? just to keep this thread numismatical, coins bottom line is they can either be spent or melted?...one more thought, india's priorities r much different than china's....

Different markets have different factors at times.  When 10-year Treasuries were at 0.5%, they were there because of pandemic fears....the market WANTED higher rates because it was consistent with a removal of the "fear trade" with $$$ moving into UST.  Today, we have rates closing in on 5% and the market is scared.  Somewhere between 0.5% and 5%, the market decided rates were high enough and going higher was no longer good for stocks.

Can't have defined relationships either among U.S. asset classes (like stocks vs. UST) and world asset classes....just like you can't say Saints will benefit from rising Lincoln Penny or MSD prices.  Sure, a "rising tide lifts all boats" so maybe if all U.S. coins are going up then Saints would too.  But not necessarily (i.e., a move up in coins that aren't PMs).  Same thing with all the different things you cited.

Big change now is the end of ZIRP -- Zero Interest Rate Policies -- going back to rate levels pre-2008 Great Financial Crisis (GFC).  It was 15 years ago...lots of people forgot.  What are stocks worth if you can get 5% in a money market fund or 6-8% in investment grade bonds with a tiny amount of high-yield ?   What are long-duration stocks that don't pay dividends (i.e., tech) worth ?  What are dividend-paying stocks worth ?

Nobody remembers !! 

Bitcoin wasn't around pre-GFC...crypto and BitCoin are a trillion-dollar market.  Is the money going there coming from art....coins....gold & PMs....UST....stocks...what ?  All guesses.

Check out these charts.  Looks high if you go back a decade or a bit longer....but looks like we're returning to the post-WW II levels and could go up another 100-200 bp without threatening the late-1970's/early-1980's levels, right ?  Problem is, stocks can't take another 100-200 bp.

On 10/24/2023 at 3:06 PM, World Colonial said:

Yes, and this is only the beginning if the cycle actually ended in 2020 as it almost certainly did. Any inference that a 39-year cycle (1981-2020) ended or fully "corrected" with a measly 3+ year advance especially when the actual "fundamentals" are mediocre to terrible is nonsensical.  It's a complete fantasy.  I also know it's contrary to the personal preference of most of the US population but there you have it.  Interest rates aren't "high". Current rates are more typical of what existed prior to the late 60's (or near it) when lending standards and credit quality   were actually "normal", except that both are now at (sub-)basement levels in the aggregate.  "Normality" completely ended with deranged fiscal and monetary policy starting no later than 2008.  (It was hardly "normal" prior to that either.)  The primary reason this increase hasn't impacted the economy as many expected is precisely because lending standards are still very lax meaning it isn't actually hard to borrow, for hardly anyone. That's coming later.

The jury is still out on if we are reversing the 40-year tailwinds we had for keeping inflation low.  China, demographics, and free trade are being slowly unwound.  India and other Asian countries may or may not pick up the slack.  AI may be a great productivity enahancer which could be the equivalent of cheap energy after 1981 but we'll have to see.

That said, we went from 2% to 4% from 1946 to 1966 on the 20-year Treasury.  The 1970's came much later.  Even if we eventually hit double-digits on rates, it will probably be many years or even a decade from now.  We're not going straight up in a short time period.

Stocks should be good investments and durations of 5-7 years will serve most well in fixed-income.

On 10/24/2023 at 10:22 AM, zadok said:

...roosters r very available n usually r sold based on bullion rates, ampex will sell u all that u can carry away in a wheelbarrow...the numismatic value only comes into play in very specific grades n is differentiated 1899-1906 n 1907-1914, in the pre-restrike issues ('99-'06) the coins r still available but normally in the low to mid unc grades, i see literally dozens of 62-63 coins every month n pass on all of those unless under melt value, numismatically these r of added value, twice melt in the 64 range n triple/quadruple in the 65-66 range...the top pop coins for these years, currently 64-66 grades, r where the prices skew radically...there r a few years '01-'02 where the market is competitive n of course the one key date of 1900...as for the re-strike years, '07-'14, the only coins of investment value that matches the asking prices r those in 67 grades, 66 coins go begging...the 2 currently graded 68 coins fall into the "what ever the market will pay" category...personally, i only buy roosters if they r top pop coins n the prices r double/triple melt value range....

I think only sophisticated gold or coin buyers/collectors would be looking at Roosters....the casual buyer is thinking at most U.S. American Gold Eagles....then Maple Leafs or Pandas/Kruggerrands.

I never would have known of the coins except for HC/QA here.   And I've been on these forums for years.

On 10/23/2023 at 8:20 PM, World Colonial said:

Agree, except that when the next phase of the rate cycle takes off, I'll take the "over" on rates moving faster than what's happened since 2020.

I expect it to coincide with the recognition of the actually mediocre to awful "fundamentals" which substantially exist now.

We've already had a a record rise in Fed Funds and the 10-year Treasury yield.  From 0.25% and 0.5% a few years ago.  Even if you use the 10-year rate from 18 months ago....it's doubled.  Those are BIG moves percentage-wise and in absolute terms, too.

"Highest rates in 15 or more years" is something we haven't said/seen in decades. 

On 10/23/2023 at 8:28 PM, World Colonial said:

Maybe buyers had a reverse epiphany where they collectively realized there isn't a dime's worth of practical difference between coins with the different labels in your examples and that it's all financialization and marketing? Probably not, but that would make a lot more sense.

No argument, but when you can reap Big $$$ by getting that 1-point upgrade, the incentive is huge to go for it.

Even coins with the "+" AND CAC are not going for what they would have years ago if you have a big inflection point price-wise.

On 10/23/2023 at 8:02 PM, Henri Charriere said:

I viewed an eBay listing today for an 1906 NGC-certified Gold Rooster graded MS-63 for the outrageous and unconscionable price of $1,900., not including NYCs nearly 9% sales tax + shipping.

A rooster is just under 1/4 or 1/5th of an ounce, so about $400 in gold, I guess....that particular coin in MS-63 have much numismatic value ?

If Roosters are not widely available -- esp. on Ebay -- that could account for the huge ask, if there isn't much numismatic value.

On 10/23/2023 at 7:18 PM, Henri Charriere said:

Numista, offers up a wealth of information to Gold Rooster collectors including one little tidbit which states the F20FrGR series was demonetized in 1928 which fits very neatly into your narrative of your Key Fact. 

So it was worth whatever weight in gold...but no longer official currency, like 20 Francs.  Incentive for citizenry to turn in their gold to the French central bank.

On 10/22/2023 at 8:33 PM, Henri Charriere said:

One report sees gold going up as high as $10,000/oz. -- by the end of this decade. 

I hate predictions like that, because they simply don't take into account supply and demand, the fact that it's a huge move, the increase in market capitalization of the gold stock a 5-fold increase would imply, competing investments (i.e., Treasuries or Bitcoin) if the underlying rationale for such a move were inflation/geopolitical/whatever....etc.

Click-bait, I'm afriad.

I think gold's move in the 1970's was a once-in-a-lifetime move caused by unique circumstances that are not likely to be repeated: a controlled price of gold finally ended, inflation, end of fixed exchange rates, gasoline lines, stagflation, etc.

I think a move to $3,000 in a few years is plausible.  $5,000 is possible if certain conditions are met.  $10,000 would imply some economic, financial, or geopolitical upheavals that I don't want to speculate on.

I'm wondering because the internet has now made anybody who is a serious buyer or collector aware of the coins, time periods, and grading histories that are a bit on the generous side.   As usual, I am making my observation based on what I have seen with Saint-Gaudens Double Eagles but feel free to chime in on other popular coins.

What I am seeing specifically is that the premiums that were in the past paid for coins with a "+" or a CAC sticker are not driving the coins up in price as was more common 5-10 years ago.  People are realizing that getting an MS-66+ for $4,500 (with an MS-66 costing about $3,500) does not mean the coin has a great/good shot at becoming an MS-67 worth $10,000 or more.

I see lots of coins not getting any bids, because the seller is asking too high a price.  Those that do sell are NOT closing the majority of the gap to the next highest grade if they are 65's or 66's.

My guess is most serious buyers who are paying 4 or 5-figures for a coin are pretty savvy about the market for that coin and/or have good grading skills (like many here).  They can probably independently tell if a coin is likely to grade higher (assuming a 1-point increment means Big $$$)....and they realize that if a coin hasn't gotten that grade BY NOW from a major TPG...it isn't likely to going forward. 

The easy pickings are done, the low-hanging fruit has been picked.  If your odds in the past of finding a true MS-67 or MS-66 by buying a 66 or 65 with a "+" or CAC sticker were 1 in 2 or 1 in 3...maybe now they are 1 in 5 or even 1 in 10.  That's how I see it.

Thoughts ?

Key Fact:  From 1918-1924, the Franc lost 80% of it's value.  In 1926, they put in place financial and budgetary austerity measures that helped the Franc rise and attracted gold into the country (for the central bank, not the French citizens ).

On 10/22/2023 at 4:17 PM, Henri Charriere said:

Any thoughts about the 1-ounce .9999 fine American Liberty gold coin to be produced with the use of laser-engraved Master Dies featuring the 1794 Flowing Hair-type visage with minimal use of legends and designs beyond those featured on the original coin as well as a nominal face value of $100?

Is it in high or ultra-high relief ?  Have we used laser-engraved dies before (I thought we have, like on the 2009 UHR DE) ?

I'll have to see it but the previous Liberty 1-ouncer did nothing for me.  Quite frankly, I'd rather have one of the National Parks Foundation gold coins.

On 10/22/2023 at 2:31 PM, zadok said:

...the above photo was taken at the philadelphia mint those r $2.50 quarter eagles....

Is that a counting "board" or machine...or the end of the conveyor belt where the eagles roll off?