Weekly Market Report: Gold Coins Sparkling as Dull Stock Market and Low Interest Rates Fuel Flight to Tangibles

There has been so much going on in the worlds of modern issues, 18th century rarities, the popular 20th century series and deep cameo Proof coins that gold has been almost ignored in this column in recent weeks. Does that mean that nothing is happening with MS64 $20 St. Gaudens and similar items? Hardly!

"The market is as active as it can be for any PCGS MS64, 65 or 66 $20 St. Gaudens," reports Richard Schwary of California Numismatic Investments, Inc., in Inglewood, California. "I have had to stop selling them twice in the past two weeks just because I didn't want to short the market. I would gladly buy 100 pieces in each of those three grades."

Public is buying gold in large quantities.

What is the catalyst for all of this action? "The public is buying 20 to 50 coins at a time," Schwary said. "Business is up 120% over last year and the money is coming from mutual funds, disillusioned stockholders and right out of bank accounts that offer minuscule returns. The low interest rates are fueling this market segment. There's real action in gold."

Are there real supply problems or were the shortages in the last two weeks just an aberration? "People have been hearing the 'short supply' warnings for so long that they're jaded to it, but the reality is that no one has quantities of PCGS-certified gold. A breakout would create an absolute free-for-all."

What are the "breakout" levels? "Right now we're in the high end of a narrow trading range that seems to top at $320. Analysts feel that $330-$335 is the magic number. Once it reaches that it has to hold convincingly, not just touch it and dip back."

What about the other semi-generic gold coins? "In the $2½, $5 and $10 gold pieces the action is flat in MS63 and excellent in MS64. People are finding a lot of value in the MS64 gold," Schwary concluded.

Up-tick seen in several market areas.

"The St. Louis show [the New Silver Dollar Show] was not really indicative of this market," says Mike Printz of Larry Whitlow, Ltd., in Oak Brook Terrace, Illinois. "Actually, it was a fairly good buying show, but as everyone else is saying the activity was far below the levels of the last six months."

Where are you finding the most activity? "Eye-appealing coins are where the market is at," Printz said. "People are so much more educated about coins than they were ten years ago. They'll step up to the plate and pay the price for a really pretty coin, which enables me to pay a lot more if I feel that the coin warrants it."

Is there a market slowdown going on? "The Baltimore show will be a good indicator for the rest of the year. This is traditionally a slow time in the market, so we'll see. There's been an up-tick of interest in several areas, including Mint State type, Mercury dimes and especially Walking Liberty half dollars."

Huge Bowers & Merena auction on November docket.

There are over 5,000 lots in the upcoming auction from Bowers & Merena Galleries. The seven-session sale is November 6-9 and is being held in conjunction with the Baltimore show.

The name of the sale is The Collections of Russell J. Logan & Gilbert G. Steinberg and Part III of the Jay Roe Collection. Here are a few of the $10 and $20 gold highlights:

1. 1795 $10 Small Eagle (PCGS EF40)
2. 1797 $10 Small Eagle (PCGS AU55)
3. 1798/7 $10 Large Eagle 9X4 Stars (PCGS AU53)
4. 1799 $10 Large Eagle (PCGS AU55)
5. 1801 $10 Large Eagle (PCGS MS62)
6. 1897 $20 Liberty (PCGS PR64CAM)
7. 1908-S $20 St. Gaudens (PCGS MS65)
8. 1931 $20 St. Gaudens (PCGS MS64)

To view the lots and/or to bid online, click here.