Weekly Market Report: $300 Gold Adds to the Excitement as Rare Coin Market Continues to 'Percolate'

By Bruce Amspacher - February 12, 2002

1893 Morgan Dollar Proof-67 Cameo (PCGS)

"The rare coin market is per-co-latin'," says John Dannreuther of JDRC, Inc., from his new location in Cordova, Tennessee. "I anticipate a bang-up Long Beach show [February 20-24, 2002] and everyone that I talk to feels the same way. There's a tremendous amount of enthusiasm about the rare coin market in many, many areas."

Is anything different from last week? "Proof gold has gone from warm to hot. Commemorative gold has gone from medium to extremely warm. Morgan dollars are in great demand after a few weeks of sluggish activity. Every coin dealer in the world -- or so it seems -- has a want list with a few dozen PCGS Set Registry coins on it. I guess that you could say that the entire market has fragmented, good or intense interest. For the most part, it's intense."

Gold bullion takes a back seat to certified gold.

The number 300 is a magic one in the worlds of bowling and gold bullion. After an extended stay in the $260-275 range, gold finally broke the $300 price barrier in recent days. Has this new price level created a rush for gold bullion? It depends on whom you talk to.

"The public response is quite slow to the new gold prices," says William Burd of Chicago Coin Company, Inc. "Once the news gets into the mainstream it will undoubtedly create interest, but at the moment things are quiet."

Haven't prices moved up with the new gold levels? "Yes, of course, but the premiums over spot have actually fallen. A one-ounce American Eagle gold coin was selling for around a $13 premium over spot. Right now some of the dealers are quoting $6 or $7 over spot."

What about certified gold coins? "Prices have move upward by $15 to $20 per coin in the past few weeks. That's for items like MS63 $20 St. Gaudens and the other staples of the certified gold market. There's not much of a supply, though, as the dealers that I usually buy from say that nothing is coming in. No one seems to have any inventory to sell off."

Slow? Some dealers beg to differ!

"There is big action in PCGS-certified gold right now," says Richard Schwary of California Numismatic Investments, Inc., in Inglewood, California. "It's definitely the hottest since the Y2K speculation of a few years ago. The focus is on MS63 and MS64 $20 Saints."

Are you noticing the supply problems that other dealers have been commenting on for the past month? "Definitely. We recently took an order for 100 PCGS MS64 $20 St. Gaudens. This is usually no problem. In this case it took more than two weeks to fill."

Is this market for real, or is it just another false start for gold? "Gold needs to reach $310-320 and hold there before many of the potential buyers will enter the market. If it reaches the $350 level we could have a really wild market, especially in MS63 Saints. There are three things driving this market, so it's a real possibility."

Three things? "One, a large number of people are looking for alternate investments. The stock market isn't nearly as attractive today as it was in the 1990s. Two, there is little forward selling going on in the gold market. Guaranteeing future delivery at a set price is financially dangerous in an up market. Three, the banking problem in Japan is proving to be huge and there is a lot of gold being purchased over there."

With PCGS-certified gold hot, what about bullion items? "Krugerrands and Maple Leafs [the South African and Canadian one-ounce gold bullion coins] are slow because of the reporting laws. A customer can buy as many as he or she wants, but if they decide to sell 25 or more pieces they have to fill out a 1099 form. The customer can avoid this hassle by purchasing the American Eagles."

Kingswood "Gilmanton Sale" is coming soon!

"The Kingswood Coin Auctions 'Gilmanton Sale' is online on schedule and we're already covered up in bids," says Cassi East. Director of Auctions for Collectors Universe. "I am confident that this will be our biggest and most active auction in history."

Two highlights of the sale include a 1916-D Mercury dime in PCGS MS64FB and an 1893 Morgan dollar in PCGS PR67 Cameo.

The "Gilmanton Sale" closes on February 28, 2002, with bids accepted online or by e-mail, snail mail, FAX or telephone. Every lot in the sale is PCGS certified. To view lots in this exciting auction and/or to bid online, click here.

Bruce Amspacher has been a professional writer since the 1950s and a professional numismatist since the 1960s. He won the OIPA sportswriting award in 1958 and again in 1959, then spent eight years in college studying American Literature. This background somehow led him to become a professional numismatist in 1968. Since then he has published hundreds of articles on rare coins in dozens of publications as well as publishing his own newsletter, the “Bruce Amspacher Investment Report,” for more than a decade. His areas of expertise include Liberty Seated dollars, Morgan and Peace dollars, United States gold coins, sports trivia, Western history, modern literature and the poetry of Emily Dickinson. In 1986 he was a co-founder of the Professional Coin Grading Service (PCGS).