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The Coin Analyst: 2011 Year in Coins and the Outlook for 2012

by Louis Golino for CoinWeek

This is the first of what will be a yearly column in two parts. The first will review the key developments in coins for the previous year and will discuss how I see the coin market developing in the coming year.

The second will provide the same year-end review and outlook for the coming year on precious metals.

Gold Age group The Coin Analyst: 2011 Year in Coins and the Outlook for 2012I think the coming year may prove to be a strong one for numismatic coins, especially if the economy continues to recover.

Bullion Crowds Out Numismatics

Bullion has dominated the coin market to such an extent in the past year that it has been crowding out the collectible coin market apart from the very high end sector of extremely rare coins.

Many coin buyers had to curtail their purchases because of financial problems during the three years since the 2008 financial crisis. That has resulted in some good buying opportunities to acquire coins that others were forced to liquidate.

I suspect that trend will abate in the coming year, depending on overall economic conditions.

I think many dealers and collectors are ready for a break from the almost constant focus on precious metals. They want to get back to numismatic coins like classic commemoratives and type coins, and this shift, if it occurs, should help drive prices higher.

The January 5-8 FUN show in Florida always sets the tone for the market’s first couple months. Heritage Auctions will hold a major event, which should help spur interest in rare coins. The high-grade collection of St. Gaudens double eagles owned by Dr. Steve Duckor is expected to generate a lot of interest and million-dollar price tags.

2011 U.S. Mint products

In 2011 the Mint released collectible coins at a frenzied pace and gold rose about 15% for the year, which strained collector budgets to the limit.

The 2010 bullion versions of the five-ounce America the Beautiful (ATB) coins and the five-coin 25th anniversary American silver eagle sets generated the most interest.

A number of other 2011 releases have strong potential to increase because of low mintages, and I will discuss these in another article.

amer beautiful 5oz The Coin Analyst: 2011 Year in Coins and the Outlook for 2012The 2010 ATB coins were released in much smaller numbers than expected, and the coins were difficult to obtain during the first couple of months of the year, which drove prices to absurd levels that quickly crashed.

This type of development occurs frequently with modern coins. The high, early prices almost always come down once more coins come to market. It is generally advisable to wait for the market to settle down, as supply and demand factors converge to set a lower price.

It is easy to get caught up in the frenzy of modern issues with low mintages, though there are time when it is best to act sooner rather than later. But the key is to identify those issues that have the best chance of generating sustained interest.

A good example would the 25th anniversary silver eagle sets. Many collectors plan to hold their sets for a long time, and as newer collectors learn about this special set, they will want to add it to their collection, which will help drive demand and prices higher.

2012 U.S. Mint highlights

Highlights of the Mint’s 2012 product offerings, at least based on what is currently known, include silver and gold commemoratives for the Star Spangled Banner and a silver dollar for infantry soldiers; the five 2012 America the Beautiful five-ounce coins, which have very eye-catching designs that may help spur renewed interest in this series; the year’s First Spouse gold coins, which are likely to include more unusually low mintage issues; and the proof Buffalo coin.

The Mint at one point planned to release the first U.S. palladium coin next year, an American palladium eagle with an obverse based on the Mercury dime and a reverse based on a medal designed by Adolph Weinmann. The Mint is apparently still in the process of determining whether there is sufficient demand to produce such a coin.

The Mint will probably continue issuing burnished silver eagles, and it may also issue one ounce burnished American gold eagles, as it did in 2011.

The Mint plans to implement a new ordering system during the second half of the year that will be designed to better handle high-volume ordering periods. It will be interesting to see if this results in even faster sell-outs of high demand, limited edition issues, as the playing field becomes more level.

Native American dollars, which have reverses that change each year will feature a male Indian profile and a horse. Presidential dollars will only be issued for collectors.

Classic coins

There were three major trends in the classic segment of the numismatic market in 2011.

US coin market 3 The Coin Analyst: 2011 Year in Coins and the Outlook for 2012First, premiums on generic, PCGS and NGC-graded pre-1933 gold coins remain very low by historic standards. When gold hit a new all-time high of $1906 on August 22, premiums briefly rose to more normal levels, but they have since retreated and continue to represent good value.

Second, the same trend emerged for generic, common-date slabbed Morgan and Peace dollars in MS63-MS66. When silver approached $50, demand for these coins and retail prices reached levels not seen since the late 1980’s, but they have since retreated to just a little above the levels they were at before silver rose.

Third, as has been the case for some time, it became harder to find decent quality, good eye appeal 19th century coins that have not been graded, especially those with original surfaces.

Astute collectors can still spend a few hours at a major coin show and find coins that fit this bill, but I do not recommend purchasing them from a mail order dealer unless they are a very high end company like Legend or Stack’s, or a company that you trust from experience.

There is just too much polished, cleaned, unattractive material of this kind, especially at mail order companies.

All in all, 2012 promises to be an interesting year for numismatists and coin investors. If bullion resumes its bull run, collectors will have tough decisions to make about which coins they can afford to acquire, and they will worry about losing money if bullion crashes.

Stay tuned to this column, and I will do my best to keep you informed about important developments and significant opportunities in U.S. and world coins and precious metals.

Happy Holidays to all CoinWeek readers

golino portrait thumb The Coin Analyst: 2011 Year in Coins and the Outlook for 2012Louis 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.

About the Author:

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 article, “Proposed Design Change Takes Flight,” which deals with the CCAC’s recommendation for a new reverse for the American silver eagle, appears in the July 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.

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