By Louis Golino for CoinWeek
At the ANA World’s Fair of Money held last August in Rosement, Illinois the U.S. Mint sold the 2013-W Buffalo reverse proof gold coin to show attendees not long after releasing the coin through normal Mint sales channels. Buyers had to wait in line for many hours both of the two days the coins were available for sale, and some buyers waited in line the first day but were unable to procure a coin before they sold out. The reports also explained that dealers were paying a premium of several hundred dollars per coin to those who stood in line for them.
Dealers were willing to do that because PCGS (NASDAQ: CLCT) and NGC were at the show doing on-site grading of the coins, which were eligible for special ANA show labels. Coins with those labels continue to sell at very high premiums equivalent to double or more the price of the same coin in a non-show label and ungraded examples.
This year on March 29 when the much anticipated 2014 Baseball Hall of Fame coins were released, the Mint sold around 200 of the gold baseball coins at the show, and the same situation prevailed. The grading companies were at the show providing special show labels for those who managed to get coins before they sold out, and those coins have sold for astronomical premiums over non-show coins. In this case the gold coins have been selling for as much as ten times issue price in graded 70 labels, though prices have come down somewhat.
Those premiums presumably have something to do with the idea that those coins are the first coins struck, but there is no way to prove that, as the Mint does not track which dies are used to mint which coins, something other world mints sometimes do. I personally question the long-term value of coins with special show labels, but so far my view has been proven wrong by the market, where well-heeled buyers continue to pay large sums for these coins.
It was an open secret at both coin shows that the majority of people in line for these coins and at the grading company tables were either coin dealers or people paid to buy for them. Dealers at the show had stacks of coins for sale, yet most buyers have been waiting months for their orders to be shipped by the Mint.
Furthermore, at last year’s show the Mint’s Deputy Director Richard Peterson said he likes releasing major coin products at the premier coin show of the year because of the exposure it gives to those coins.
Since then there has been a lot of speculation that the Mint would release the special products honoring the 50th anniversary of the John F. Kennedy half dollar’s first minting in 1964 at this year’s ANA show to be held August 5-8.
The Mint confirmed last week that both the special, dual-dated (1964-2014) gold Kennedy half dollar and the two-coin regular date uncirculated clad set will be sold at the ANA show. So far there is no release date for the four-coin silver set that is also being produced, nor are there any details about mintage levels, household limits, or how the coins will be sold. A lot of people have speculated that either the gold coins and/or the silver sets will be minted to demand.
The silver sets will include coins with proof (Philadelphia Mint), reverse proof (West Point Mint), and enhanced uncirculated (San Francisco Mint) finishes plus an uncirculated coin from the Denver Mint.
The two-coin set will be available from the Mint starting July 24, but there is no word yet about whether the gold coin will be sold before or during the show through the Mint web site and telephone ordering system.
It goes without saying that the grading companies will be on site in Chicago to grade the gold Kennedy pieces and give them, you guessed it, special show labels. And of course dealers will be out in force, and the coins will be sold at huge mark-ups soon after.
This is clearly a nice deal for those who benefit from the arrangement, which is mainly coin dealers and the grading companies, as well as those collectors who are lucky enough to get through the lines given all the competition from dealers. Per person sale limits are likely to be in effect, but they are of little good when dealers are paying many people to stand in line for them, and in addition a family of five can walk away with 5 coins as many did in Baltimore. In fact, the father of the young Orioles fan, Cole Banks, who was the first person to buy baseball coins in Baltimore wrote on the PCGS discussion board after the show that he is an experienced e-Bay coin seller and that he made a lot of money from the coins purchased at the show.
I think it would be a huge mistake to release the gold Kennedy coins at the show and only sell them later to those unable to attend. It would reinforce the perception that already exists for many collectors that the Mint acts in a manner that prioritizes the interests of dealers over those of collectors.
I also think that some policies need to be put in place by the Mint to dampen speculation in these coins. Reducing speculative behavior is something that mints in other countries, especially Europe, as I have noted several times, actively promote because allowing as many collectors as possible to obtain a release is considered a paramount objective, and it is in fact one the U.S. Mint’s professed goals.
I am not sure what the best way to accomplish this would be, especially as long as people with a lot of money are willing to pay premiums for coins with show labels, and dealers should of course be free to pay others to buy for them at coin shows. But in addition to making the coins available either before (as last year) or at the same time (as this year), other steps could be taken such as bringing a larger inventory of coins to the shows and more Mint personnel to sell the coins to give everyone in line a better shot at doing as well as the dealers who can afford to stack the line with their buyers.
Besides, there is so much interest in a release such as the Kennedy coins or the baseball issues that the Mint hardly needs the extra exposure that comes from selling the coins at coin shows.
Copyright © CoinWeek – June 2014
Louis Golino is a coin collector and numismatic writer, whose articles on coins have appeared in Coin World, Numismatic News, and a number of different coin web sites. His insightful retrospective on the American Silver Eagle was the cover feature of the February 2014 issue of The Numismatist. His column for CoinWeek, “The Coin Analyst,” covers U.S. and world coins and precious metals. He collects U.S. and European coins and is a member of the ANA,PCGS, NGC, and CAC. He has also worked for the U.S. Library of Congress and has been a syndicated columnist and news analyst on international affairs for a wide variety of newspapers and web sites.