My thoughts on the Kennedy gold coin fiasco

[World Colonial]

I make the last comment because while I believe some non-collectors will buy it and many more potentially are interested in it, I don't see them buying it in large numbers.

Agreed, but I don't see many of those people caring about the special labels, or super high grades etc. They would be just as happy with one from the mint at issue price. I don't see them as a source of support for high premiums.

 

I don't believe that non-collectors care about these ridiculous labels either. And I also agree that they most likely prefer them in the original packaging as I would if I were to buy this coin..

 

Given the mintages, I suspect that there are a large number of non-collectors buying commemoratives and the proof ASE just as they have traditionally done with proof sets in the past. I expect that from this grouop, some are interested in this coin but the difference is that the issue price is so much more and probably far above their price point.

[RWB]

So...each piece contains about $960 in gold at today's market. Suggests a buying price of about $900 ea regardless of packaging.

[BillJones]

So...each piece contains about $960 in gold at today's market. Suggests a buying price of about $900 ea regardless of packaging.

 

The gold bullion price holds, I don't think you find any takers for your $900 offer. You can't buy the deadest of dead $5 commemorative coins, (Constitution, Statue of Liberty, World Cup) for less than melt from a dealer. They will PAY less than melt, but they won't SELL for that unless it is bulk wholesale deal at slightly less than melt to another dealer.

[orifdoc]

I didn't read every post, but as I reflected on my collection I realized (with a single sentimental exception), every last coin in my possession was a business-strike issue.

 

..... don't see any reason to go changing things now.

[vamwilder]

I am curious on how the first of something sold could have more weight("value") than the first one that is actually created. The golden kennedy was able to be purchased at numerous locations is my understanding. I assume the ANA hold's more weight than the actual mints the coins came from and those that were sold first at those mints? Shouldn't there be multiple "first sold" coins out there? Or is the first coin sold attributed to being the first one graded? I am pretty sure there were no TPG tables outside the other distribution sites at the time the coins were sold there.

 

Did the first coin graded get a PR70? If it did(surely it must have...right?), would it have sold for $100,000 if it received any lower than that?

 

I by no means want to acquire this coin. But, being the OCD collector that I am, there is no way I will be able to live with a hole in my Kennedy set. Will that same OCD be able to overcome one golden "sore thumb" in a set of silver. Ironic.

[World Colonial]

First, I see you are new here, so welcome. If you want this coin, buy it in whatever form you like.

 

With this qualification, there is no rational reason for the pricing you are asking about. I make many unpopular comments here, so I might as well make another one.

 

As far as I am concerned, the idea that these labels, the first one struck or sold or the completely trivial difference (which I don't believe 90%+ of these buyers can notice even with a magnifier) between a 69 and a 70 is a form of voluntary self delusion. But as long as enough people believe it, the price differences will continue to exist. All of it is marketing. There isn't any substantive difference with the coins in the holder.

[Conder101]

Why is even the original price 30% over spot

Well the law used to permit the mint to sell collector coins for a maximum of 20% over their cost. (I don't know if that is still in place.) So cost of the gold, cost of having the planchets manufactured, holders, advertising, and anything else they can think of into the "cost of production" figure and then add 20%. If you can throw enough into that COP figure you could possibly come up with that 30% over spot price.

[delta]

The comparatively high percentage over spot price is only one among several negative aspects to the 2014 gold Kennnedy proof half.

 

Another is the ¾ ounce gold content, an odd quantity. Virtually nobody is going to get one of these as a vehicle for holding gold bullion.

 

The coin commemorates not Kennedy directly but the Kennedy half dollar coin set, as it is stamped with the dates 1964-2014. That might be fine with collectors of the set, but not many others.

 

The totally ridiculous low face value of fifty cents contrasts with the almost as ridiculous $5 for many recent gold commems and $10 for gold spice. Probably irrelevant to collectors of gold U.S. commems but not enticing to others.

 

The quantity sold by the mint will almost certainly far surpass the final demand by collectors who can afford thousand-dollar-plus coins.

 

Negative publicity for the shenanigans of aggressive coin dealers was a big turnoff.

 

The proliferation of different labels with supposed different values also detracts, and is very confusing to the inexperienced.

 

These factors and others, combined together, will result in this issue becoming a dud. I'd expect the premium over spot in the secondary market to therefore drop to below the original 30%, regardless of how gold spot price fluctuates in the future.

 

 

[RWB]

 

vamwilder: Shhhh...too much logic will further spoil the already spoilt.

 

 

[World Colonial]

I agree with your sentiments but the point I agree with most is that there are unlikely to be anywhere near enough "real" collectors for the final mintage at this price level. I previously listed three sets (Kenndy half, commemoratives and proof sets) but even adding a fourth (type sets), I still don't see it.

 

On the PCGS forum (which has numerous threads on this subject), more than a few apparently actually believe that because Kennedy was/is a popular president outside the US, that many foreign collectors will desire this coin.

 

I consider this idea nonsense. I can see a possible interest in the silver coin (unlikely the clad) because it is so much cheaper, but not this one. There are plenty of world gold coins with better artistic appeal and much lower mintages that can be bought for about the same money. One series is the Swiss 1000 CHF with mintages in the hundreds. But more likely since they aren't even paying a premium of consequence for these others, it is because they can buy far more significant and much scarcer coins for much less.