Weekly Market Report: Certified Gold and Bullion in Wild Demand; Market Strong Across the Board

By Bruce Amspacher - January 21, 2003

1909 V.D.B. Cent (PCGS PR66RB) - sold at the Kingwood ''Lincoln'' Sale for $13,800.

Gold!

The white-hot rare coin market continues to sparkle in all areas, but the brightest star in the sky appears to be gold. With prices holding above $350 an ounce after the best performance in 23 years in 2002, there's no doubt that the supply/demand ratio has been severely skewed to the demand side for gold.

"The markets are crazy," says Richard Schwary of California Numismatic Investments in Inglewood, California. "Right now the action is about 50/50, with half the sales in bullion items such as Krugerrands and American Eagles and the other half in PCGS-certified gold."

Prices "way up" in MS63/64 gold.

Schwary reports that MS63 and MS64 gold has risen tremendously in price in recent months, but the action has not slowed. "The public recognizes the value in this area of the market and is ignoring the recent price history. Our sales have tripled in the past six months and most of the inventory never makes it into the showcases."

Richard, you said that if gold broke the $335 barrier and held above that level that this was the scenario that we'd see. What's the next price barrier? "If gold goes to $400 the current market will seem tame by comparison. It will really get wild! The new barrier looks like $365, as gold keeps getting pretty close to it and backing off to $350-$355.

"No one will short this market. There was a time when the suppliers would sell you coins whether they had them or not [at a promised future delivery price]. No longer," Schwary said.

"Not a single person came by to sell me coins."

"It seems like every time I sell a coin someone tells me, 'Oh, the market is stronger than that on those,'" laughs John Dannreuther, a veteran dealer from Cordova, Tennessee. "The interest is so widespread that almost everything is easily sellable.

"At the ANA convention in August I had a hundred dealers come by and show me coins. At F.U.N. not a single person came by to sell me coins. Everyone is staying behind the table because the customers are definitely coming by."

Are the new price levels creating any resistance? "People will look back at January of 2003 and talk about how attractive the prices were," Dannreuther said. "This market is bubbly hot with explosive potential upwards. The rising gold and silver prices continue to have a positive psychological effect, too."

Kingswood "Lincoln" sale is "busiest ever."

The Kingswood Coin Auctions "Lincoln" sale closed January 16 after setting records for participation. "There were 200 more bidders at the 'Lincoln' sale than at any other Kingswood auction," said Cassi East, Director of Auctions for Collectors Universe. "It was far and away the busiest ever. It's wonderful to see the market so hot and such incredible enthusiasm among the dealers and collectors."

Here is a brief list of some of the impressive prices realized at this sale:

1793 Half Cent (NGC AU58) - $17,825
1856 Flying Eagle Cent (PCGS PR63) - $10,143
1909 V.D.B. Cent (PCGS PR66RB) - $13,800
1921 Walking Liberty 50c (PCGS MS65) - $11,500
1946 Doubled Die W.L. 50c (PCGS MS66) - $5,750
1893-S Morgan Dollar (PCGS EF45) - $6,038
1860 $5 Liberty (NGC MS65) - $23,000
1905 Lewis & Clark Gold $1 (PCGS MS65) - $10,178

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).