By Laura Sperber - Legend Numismatics - Below is a portion of the most recent Legend Market Report
This is hard for us to believe that gold spot went up, yet ALL Generic $20's came down! That is the most ridiculous thing we have ever seen. We have been told that the market makers here are flooded with coins. Plus, there seems to be a huge flood of gold coming from Europe. We have even heard some grumblings that the quality of these new arrivals have been poor (more gradeflation?). So no one wants to step out and make bids.
At one point last week, the LARGEST market maker in MS65 Saints quoted us $2,000.00 as his "buy" on a day when gold went up $20.00 (MS65 BID did end the week at $2,200.00). In the meantime, we know dealers who badly need CAC MS 65 Saints and have open BIDS of $2,300.00-$2,400.00 per coin and are buying very few.The demand for NON CAC generics is obviously thin.
The demand for CAC coins is huge with many MAJOR Funds or financial advisers selling the coins easily. We know they cannot get enough, because we supply them and we haven't bought squat. We will still buy ALL the PCGS /NGC W/M MS66 CAC we can get at $3,475.00 sight UNSEEN. We will pay $2,675.00 for NON CAC PCGS coins only on a SIGHT seen basis. BTW, for anyone who wants to cat call, the CAC market is NOT artificial, its as real and powerful as you get.
The CAC coins sell by demand, not dealers creating phony bids and trying to pump the market. With gold (especially generics) right now for sure there is a two tier market, and quality is what people want.
You know there is something seriously wrong when graded MS61 $20 Libs are priced at $100.00 OVER melt!
With $20's, it also seems to us that the market feels they are too high (along with the price of gold). We doubt at the lower grade levels quality is the issue. Something has to give in that market. We believe there will be a correction in the price of gold sometime soon. But, its really the hedges who control the price of gold and it seems they want to take it up a little further.
Its totally bewildering to us why there are not stronger premiums since gold is climbing daily into record territory. Something is just not right with this picture.
Right now the BEST buys are $10 Indians and $5 Indians (no 09D) in MS64 and higher. You can not find them emass, and the grading seems to be OK. If you insist on playing the $20 generic market we still believe MS66's are too cheap or, you can buy NICE MS61/62 $20 (if you can find them) for little over melt and hope one day the premiums expand. We still recommend building a Gold Type set. You can include ANY coin you want then.
People are finally waking up to the fact silver is at its all time high. Here too, things like MS65 Morgans and Walkers have come down. That's insane! How can such a huge market as coins show little demand for simple $100-$200.00 items that actually were popular? Where are all the collectors?
We do not know if poor quality has driven them quiet or what. A GEM 1943 Walker at $105.00 is cheap-no matter how many were minted.
We say this not because we have the huge McClaren deal, but because we see these as just too cheap. We suggest you load up on TRUE MS 65-MS67 Morgans and TRUE MS65-MS67 Walkers. Build a Walker short set in GEM, buy the easy S Mint Morgans in 67, or just load up on really nice pieces. There is almost NO down side at today's levels with these.
The only real problem with this end of the market today-there are not enough rare coins around!
We've seen several people end their quests to build collections because they have not bought a coin in a year. A suggestion: be creative: one customer of ours is building the second finest MS Seated Dollar set. We added ONE coin over the past 3 years (an 1855 PCGS MS64 CAC) at the Boston ANA Show. So what he is doing now? He is filling in the dates he can't find with Proofs! Thats not easy either, but we do find a coin here and there and it satisfies his need to have the holes filled in a timely manner. Of course if an MS piece of a date where a Proof has been substituted arrives, no problem, he will keep both!
When people ask us what to collect these days, we recommend Type sets. This way there are no barriers, its completable, and you put in the coins you want.
Today, we see the market as steady but building. Based upon our sales, we know things are far from dead. Who knows what gold is going to do or how it will effect the coin market. For now, everything is positive. Even if gold corrects, rare coins probably will not really feel its effects. Remember, the rare coin market is base on supply and demand.