The Coin Analyst: Are the Chicago ANA Buffalo Reverse Proof Gold Coins Really That Special?
By Louis Golino for CoinWeek ………
Leo Freese wrote recently about the 2013-W Buffalo reverse proof gold coins, specifically those sold and graded at the recent ANA World’s Fair of Money held in Rosemont, Illinois and asked if he should buy those coins. He suggested that because no more than 1500 of the total mintage of the coins would be both graded PF-70 and have the show label that this could create the conditions for a “modern rarity,” and that these are the coins collectors want.
I would suggest that these coins are not nearly as special as they have been portrayed by Mr. Frese and the dealers selling them, and that the coins will not retain their current premiums, let alone “easily double from here,” as Mr. Freese wrote. In fact, as I explain below, some have already declined substantially.
First of all, there is nothing inherently different about the coins sold at the ANA show from those purchased through regular Mint channels. In fact, despite having initially had their orders backordered until sometime in September, many people who ordered this coin online when it was first offered prior to the start of the show started receiving their coins with a few days of the end of the show. By last week many people who ordered online had received their coins.
Quite simply, there is no way to prove the ANA coins were struck before the ones sold on the Mint’s web site or over the phone. It has been well established through lawsuits and extensive discussion in the numismatic media in recent years that first strike and early release labels merely reflect the submission policies of the grading companies and have nothing to do with when the coins were actually struck. To do that the Mint would have to track which dies were used to make which coins, and that is not something they do. Given that these coins were struck to demand, if anything, the coins ordered online before the show were probably produced before those sold at the show in anticipation of very high demand from online buyers.
I can understand why buyers were eager to get their hands on the coins at the ANA as the reverse proof Buffalo is a very nice coin, and if it does not become a regular issue, it has the potential to develop a healthy premium as a result of high demand from future collectors coupled with likely higher gold prices in the future.
But I must question the wisdom of paying early retail prices for these coins, which have reached as much as $4,000 and more for PCGS proof-70 ANA label coins. In fact, on September 3, Great Collections (www.greatcollections.com) sold just such a coin for $2,803 ($3,083 with the buyer’s premium), which is quite a drop in such a short period. On e-Bay there are a lot more NGC coins because they were at the show grading the coins, whereas those graded by PCGS had to be either submitted during the show or reach PCGS by August 21, according to PCGS customer service. At NGC buyers who still have their original Mint receipts from the show can still submit them for the special ANA label.
On e-Bay the NGC coins are averaging about $3,000 with the highest recent sale being for one in a retro NGC holder for $3,500. For the PCGS coins the highest posted recent price is $3,250, though some coins are sold at best offer prices which are agreed to between buyer and seller and not listed publicly.
Any time the same coin in the same label sells for a range that goes from $2,800 to $4,000 and more in a very short period, as is the case for the PCGS coins, I would be leery. I simply do not see there being much in the way of upside potential for these coins. In fact, I see a lot more potential downside than upside, especially since they are still available until September 5 from the Mint for a current price of $1,740 and non-ANA label proof-70 coins are available from many dealers for about $2,000.
Is the ANA show label really worth $1500 or more? Does anyone who has studied modern U.S. coins over time think future buyers will pay those premiums? I seriously doubt it and think a lot of people who paid retail prices will soon have buyer’s remorse.
I can understand why dealers and other buyers would purchase these coins at the Mint, have them graded at the show, and sell them for an enormous quick profit before premiums start dropping. But to call the ANA-label coins “modern rarities” is to distort whatever meaning that term has (since very few modern coins are even truly rare). A grading label can add value, but it does not make a coin rare unless it is a condition rarity situation where only a very small number of coins have been graded 70.
I find it very unfortunate that so many people have been chasing these over-hyped ANA-label reverse proofs when they could purchase two from the Mint for the same price. Furthermore, I am especially troubled by the fact that, as I explained recently was detailed in Coin World , three major dealers managed to secure the majority of the show coins. By paying many people premiums to stand in line for hours and purchase coins on their behalf, and thereby get around the Mint’s per person buying limits at the show, these companies made it that much harder for the average collector to buy a coin at the show, especially given how quickly the coins sold the first day of the show.
I realize that both parties in those arrangements consented to what they were doing, but I can tell you that if I had been at the show, I would not have agreed to a $100-200 premium when I had the chance to make about $2,000 per coin as the dealers did, and I wonder how those who accepted the small premiums feel now that they see what those coins have been bringing.
Moreover, I raise these points not simply out of concerns about fair access, but also because a modern coin whose mintage, or in this case a subsection of the total mintage sold only in person at a coin show, is scooped up by a handful of dealers is unlikely to sustain its high retail premium over time. The history of modern numismatics is strewn with coins that were hyped as being extra special when they came out, only to see their values plummet later. 1500 may seem like a small percentage of the mintage of a coin with well over 40,000 examples in existence, but it only matters in the long-term if there is something truly unique about those 1500 coins. The only thing unique about the ANA label coins is the fact that they were sold at the show, and I doubt many people will care that much were they were sold years from now.
The Mint has indicated that it plans to launch more major releases at future ANA shows, and going forward I think the Mint needs to come up with a more fair distribution system than the one used in Rosement, especially for coins in high demand. Not to mention the fact that according to an article in the August 27 PCGS e-Collector by Justin and Mitchell Spivack, fist fights almost broke out as people tried to jump the line of buyers. I have asked the Mint for comment on this and will report back what I hear from them.
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 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.