Mitchell and Justin Spivack
August 26, 2013
Within Minutes of the Chicago ANA show opening on Friday, August 16, 2013, there were approximately 230 people standing in line for the $50 Reverse Gold Proof Buffalo Proof!
And the line grew from there. A fist fight almost broke out, when people eager to get the coin tried to jump the line. The Stampede is certainly on for the 2013-W Reverse Proof Buffalo One-Ounce (.9999 pure gold) coin!
The much anticipated 2013-W Reverse Proof Buffalo One-Ounce (.9999 pure gold) coin went on sale at the U.S. Mint on August 8, 2013 with no mintage, product or household limit. The conditions of the sale were posted in early July, 2013 as follows:
"There will be a four-week ordering window beginning August 8, 2013, at 12 noon (ET) and ending September 5, 2013, at 5 p.m. (ET).
We have not seen this much excitement for a gold coin offered by the U.S. Mint since the 2009 $20 Ultra High Relief Double Eagle (UHR) and, prior to that, the 2006 Reverse Proof Gold Eagle.
The UHR continues to be incredibly popular with collectors and trades at roughly $1,000+ over spot for a nice raw example. PCGS "perfect" MS70 examples currently trade for roughly $1,600+ over spot. The reported mintage on the UHR was around 115,000 coins. The raw 2006 Reverse Proof Gold Eagle trades at roughly the same $1,000 premium over gold spot (and roughly the same $1,600 over spot for the PR70 version), but also has an extremely low mintage of roughly 10,000 coins. Obviously, this 2013 Reverse Proof Buffalo Gold mintage will greatly exceed that of the 2006 Reverse Proof Gold Eagle, but is also likely to be quite a bit under than that of the UHR. Can this Reverse Proof Gold Buffalo command a significant premium to gold spot in the years ahead? That is for you to decide as you make your decision to "pass or play" on this coin as the purchasing clock ticks down. At the time of this writing there are -10- days left to order and the Mint has already taken orders for 36,528 coins.
Here is a recap on what has taken place so far with this coin since it went on sale at the US Mint. On the morning of August 7, 2013, the Mint set the opening price for the Reverse Proof coin at $1,640, the very same price as the regular 2013-W Proof Buffalo gold coin that the Mint also sells. When the ordering process began on August 8, 2013, the coins, from the outset, were placed on backorder. The earliest orders placed received a ship date of September 7, 2013 (a full month away). Shortly thereafter, the ship date moved to September 27, 2013 (nearly seven weeks out). The following day (August 9), the Mint added a "sales odometer" to the product offering on their website and it revealed "total units ordered" at 21,009. By August 15, 2013, the one-week sales reached 30,482 units!
On August 13, 2013, in conjunction with the opening of the Chicago ANA coin show, it is believed that the Mint brought 1,000 of these Reverse Proof Buffalo coins to sell at the show with a limit of (5) coins per person. The grading service(s) treated this offering essentially as a "pre-release" of the coin so as to not affect the "First Strike" period which typically starts when the Mint "ships out" its first coin. The small group of dealers and collectors who were present at the show on this day and were paying attention to this special U.S. Mint offering were generally able to make it through the Mint line at least two or three times before the limited quantity of these coins sold out. The dealers at the show also established a buy premium on these coins that day of roughly $100/coin over mint cost due to the grading service(s) announcing that they were going to assign a special coin number to these "Chicago ANA" Reverse Proof Buffalos.
The Chicago ANA offering of these coins on August 13, 2013 caught most Buffalo gold collectors and even some of dealers who specialize in these types of modern coins by surprise (even though the Mint did issue a release a few days ahead of the event stating that it would have coins to sell at this show). To some extent, this was due to the confusion surrounding the recent sale of the 2013 "two-piece silver set" where it was believed that the Mint might have "live" coins to "pre-sell" at another coin show that was taking place at the time, but did not. Indeed, the day before, and even the morning of, this special offering from the Mint saw no buy ads on the dealer network for these coins. By the time most Buffalo gold collectors (and many dealers) heard about what the Mint had planned for Chicago, it was too late to "get in on the action." The Mint did reveal, however, that later in the week at the show, they would be bringing back another quantity of these coins to offer in a similar manner. The word spread on what took place on August 13, 2013 in Chicago and what was to take place again later in the week. This next time the dealers (and dedicated collectors) would be even more prepared!
Three days later, on August 16, 2013, the Mint had live coins once again at the ANA show (now offered at $1,690/coin as the coins re-priced upward by $50 on August 14, 2013) and the dealers who got into the show ahead of the general public lined up for them (with their employees and family members as well). Deals surrounding the premium paid for the coins were also hammered out between those dealers at the show not interested in "slabbing up" these "modern" coins, but with the sole interest of "flipping" their purchase for an immediate profit. The premiums on this day were well in excess of the roughly $100/coin range of the first release, and were also offered up to those collectors who got into the show at 10:00 a.m., as dealers "worked the line" trying to lock in collectors orders.
Within minutes of the show opening, there were approximately 230 people standing in line for these coins, and the line quickly grew from there! Quite remarkable considering it has been reported that this show averaged roughly 1,000 attendees per day; nearly a quarter of them were standing in line for upwards of four hours to purchase these coins! It has been reported that the Mint, once again, brought 1,000 coins to the show for this second offering and quickly discovered the enormous queue that had already formed for these coins. The Mint then reduced the maximum purchasing limit from 5 coins to 3 coins and the reported premiums being paid for the coins rose into the $200-$250/coin rage! The premiums being offered were rising so quickly that one dealer had a sign offering $150/coin over that was crossed off with a $200/coin offer while another was reportedly shouting that he was paying $250/coin over cost while waiving a large pile of hundred dollar bills!
On this day, it took collectors approximately four hours to make it through the line to purchase a maximum of three of these coins. If one were to include the additional time some collectors spent in line outside the show in order to get into the show as quickly as possible when it opened, the wait for these coins approached five hours! As the Mint got down to their last couple hundred coins and the prospect to make an easy $600-$750 presented itself, "butting in line" and the like became rampant and tensions flared for those who had stood in line for hours. The prospect of an all-out brawl taking place was not out of the question (according to a "big guy" we knew in the line who started screaming at the offenders who had jumped the line). The issue was brought to the Mint's attention and roughly four hours into the selling process, the Mint started to hand out "numbers" to ensure that the final coins available went to only those who were duly in line.
Some of those particularly determined collectors and dealers who got to the show early enough and went right back in line after their first waiting period were rewarded with a second batch of three coins before the Mint sold out of these "pre-release" coins once again.
So, why did more than 230 people stand in line for upwards of four to five hours to purchase up to three coins of a product they could order on the telephone from the US Mint in five minutes and receive with an easy delivery to their home or office thereafter?
No doubt some folks stood in line to be among the first to own what is one of the most beautiful modern gold coins the Mint has ever produced! In our opinion, this coin ranks right up there with the 2009 Ultra High Relief $20 Double Eagle as one of THE most beautiful modern gold coin ever produced by the Mint. But, in all likelihood, the majority of people in line that day were there to capture coins that were going to receive SPECIAL INSERT LABELS/COIN NUMBERS by the grading companies. For example, PCGS has now assigned coin number "520265" to this special coin as follows:
"2013-W $50 American Buffalo Rev PR Chicago ANA 2013 (Proof)"
There will also be a special coin number for those coins qualifying for "First Strike" (#520051) following the Mint's startup of the shipping of these coins. Of course, it is widely anticipated that thousands upon thousands of these coins may qualify for "First Strike" when the Mint starts shipping in the very near future as all coins shipped within the thirty days following the initiation of shipping by the Mint will potentially qualify for the "First Strike" designation at PCGS. Those coins that neither qualify for "First Strike" nor the "Chicago ANA 2013" designation will be assigned a third coin number (#520050). All raw coins submitted to PCGS for the remainder of time following the thirty-day initial ship period will fall into this category, with limited exception (e.g. sealed Mint boxes dated within the "First Strike" time period may still qualify for "First Strike" after the thirty day period has expired).
Therefore, it is quite possible (even anticipated by these authors) that PCGS will ultimately slab thousands upon thousands of First Strike-qualified coins under Coin # 520051 and, over time, slab additional thousands upon thousands of non-First Strike coins under their Coin # 520050. However, under coin number "520265" assigned to these limited production Chicago ANA specimens, PCGS will slab substantially fewer coins. PCGS will only be able to slab that small percentage of the roughly 2,000 estimated total coins that the U.S. Mint sold to customers over the two-day period at the Chicago ANA show that actually reach PCGS BEFORE the Mint initiates the general shipping of these coins. Once the coins begin shipping out to the general public, there would be no way to differentiate between the "Chicago ANA" coins and the others, which is why the grading services must "cut off" the submission of these ANA Chicago coins once general shipping begins.
Also, assuming NGC gets their fair share of these Chicago ANA Reverse Proof Buffalos for grading, as well as assuming that many dedicated collectors will not submit their coins for grading at all, but elect to keep them "raw" in their government packaging, it is quite possible that PCGS may not see more than roughly 400-650 coins or so under this special "520265" coin number (and possibly even much fewer than that). This explains why dealers and speculators alike were standing in line for upwards of five hours in order to purchase these Chicago ANA Buffalo gold coins and why dealers were also paying hundreds of dollars over cost per coin to purchase these specific coins while the Mint sold the "same" coins on its website at $1,690/coin.
Early offerings of these coins in NGC-PR70 holders on Ebay show an average retail market value of approximately $2,750/coin ... well above the Mint pricing of $1,640 - $1,690/coin. PCGS-graded coins are also now being offered for even more money after a lot of (40) coins were retailed for $2,900/coin and some early eBay sales were also in that range.
We will continue to monitor the situation with this coin and provide further reports in the weeks and months ahead. Needless to say, the first twelve days since this coin was offered for sale by the Mint have been about as exciting a time as we have seen in years for a modern gold coin. Stay tuned!
A special thanks to Mitchell Spivack and Justin Spivack for their contributing article. You can learn more about the authors by visiting their website, www.wondercoins.com.