By laura Sperber - Legend Numismatics
We have wrestled with how to break this news. Unlike so many other dealers who are in denial, want to tell you about their lunch, do not believe in speaking negative on the market, we are straight people who are going to tell you like it is. In the end, anything but straight talk we decided will not help anyone. So here goes:
GENERIC GOLD HAS CRASHED AND IS DEAD IN THE WATER. We witnessed TWO 1932 $10 NGC MS65 Indians WHOLESALE for $2,500.00 each this past week (if there were any PCGS coins around, they would trade for the same-its the market). Now, the WHOLESALE bids are ridiculous $2,100.00-with no real bidders for either PCGS or NGC. We saw a couple of PCGS MS64 Saints sell for $1,600.00. That's crazy! GOLD spot closed at $1,532.00. In addition we witnessed a major WHOLESALER/importer of gold trying to sell off a few hundred MS64 $2.5 Indians for below $1,000.00 (PCGS+NGC).
We must add these were NOT CAC coins and we have no clue if they were really nice or not (we were told by many people they were not nice at all). CAC sightUNSEEN wholesale bids on the $2.5's are $1,200.00, the $10's (P or N) are $4,200.00 and we are forever paying $3,450.00 for PCGS/NGC MS66 CAC Saints (please ship us all you can). Still, we were shocked at the prices we saw. Apparently there are NO premiums on generic gold coins.
Obviously QUALITY has to be a factor in whats going on here. Right now the market is dictating it wants nice coins if a premium is to be paid. Without a question CAC coins are selling instantly at the higher numbers. We have NO idea where all the bidders went on non CAC coins. Generic gold is a HUGE marketplace (CAC is such a minute part of it). We have heard many rumors about dealers being mad with something going on in Europe (we have no real idea what is happening there with the importers), but still, to have coins like $10 Indians in MS65 drop by 50% when gold is at its highest ever price shows a huge problem. Everyone needs to know this so that if they need money, there is no shock. We certainly do not like figuring a deal and then the collector going ape on us because they can't believe the prices we just quoted.
How can anyone not buy every MS64 Saint at $1,600.00 (even non CAC)??? You can melt the darn things for $100.00 less. We didn't even look at how much lesser grades are (at least w/MS64's you can make some $ if the premiums come back). Raw circ/low grade gold coins have be a safe bet, but they will not yield much. Just know that the gold you are buying has to be cheap-so cheap you think spot is back at $800.00. Buy the bigger NON CAC like the $10 Indians in MS65 at your own risk. And if you need to sell, you are hearing the real numbers, your dealer is NOT cheating you.
Either at the end of the summer we'll all have missed one heck of a buying opportunity or the generic gold market is frozen dead and your going to have to deal with your losses. If you are a gambler or gold bug, there are some smart hedges at these prices. We do lean towards buying generics. Its hard for us to tell if the generic market is issuing a warning that gold spot is too high and must come down. We don't think so knowing who bought in mass and how much gold overall has been bought over the past 2 years. We can still sell thousands of MS66 CAC Saints-that market is still alive and kicking nicely.
A note: this is quite a change from 15-20 years ago when we would advise people to buy the worst dreck in holders because it was the closest to melt and had the smallest premiums. Now, the market is spanking the dreck and is trying to drag everything else down too. And the premiums? Only on CAC coins are selling for any premiums right now. Its a clear two tier market.
Last: REMEMBER GENERIC GOLD COINS ARE NOT REAL RARE COINS. As much as we call coins like High Reliefs widgets, they are NOT generic coins, nor are coins like MS66 $2.5 Indians or MS65 $5 Indian gold. Generics really are mass quantity. The generic world is totally different than its counter part rare coins. We have always considered GENERIC gold as a commodity in a plastic holder.
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