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January 2017

What Goes Down Must Come Back Up?

†††††At the beginning of 2016, Gold was at $1,082.25, and by early July had climbed above the $1,365 mark. However, the second half of the year was not as good for the price of Gold as it ultimately ended at around $1,150. Even though this was actually a gain for the year, did the value of gold coins really increase or have they succumbed to the pressures of lower premiums? We have transitioned to a new age of collectors and investors, wanting the best quality for the lowest premiums, and more and more buyers are willing to sacrifice potential rarity for attractive high-quality bullion coins with low markup. With Gold up approximately $68 for the year, letís take a look at generic $20 Saint Gaudens in MS64, MS65, & MS66; the graph below shows the three grades along with the FMV from 2010 to the current year-ending price.

Graph $20 Saint Gaudens Type MS64 MS65 MS66

†††††So why are collectors and investors seemingly ignoring the potential gain above the Gold value for these classic rarities? Granted these may be the common dates of the Saint Gaudens series, but there is a limit to the number of them available, and there is almost no limit to the number of modern bullion coins that the Mint can produce. While Gold increased $68 this year, the MS64 Saint actually dropped $20 to the current $1,510 FMV. In MS65, it fell $130 to $1,790 FMV and the MS66, a very lovely coin we might add, lost $100 for the year, down to $2,440 FMV. A further look at the Type $20 Saint, the AU50 grade shows that it advanced $30 for the year to $1,400 FMV which suggests that premiums tightened during the year.

†††††The $20 Gold Liberty Type III in the same grades of MS64, MS65, and MS66 ended the year as they began. While the MS66 did show some movement, it wound up at $8,000 FMV, the same price as it was in January of 2016. The MS65 actually fell $100 to $3,780 FMV and the MS64 advanced $70 to $1,870 FMV. The Twenty Liberties in all grades from Good through MS64 have dropped about 5% during this past month as bullion has fallen about $40. Dealers are trying to protect themselves from further declines and a devaluation of their inventory.

†††††The $10 Indian is a favorite among many collectors and is a relatively short series, but it is excruciatingly difficult to complete a set in Mint State because of the extreme rarity of several dates including the 1907 Wire and Rolled Edge, 1920 S, 1930 S, and of course the 1933. The generic $10 Indians in MS66 began the year at an FMV of $7,690 and finished lower at $7,560. The MS65 was at $3,410 and ended higher at $3,500, and the MS64 advanced from $1,290 to $1,330. The MS61 and MS63 are up over 12% for the year while the rest of the lower grades increased an average of 2%.

†††††The $10 Liberty with Motto in MS66 declined during the year, down from an FMV of $6,500 to $6,140; however, at the beginning of 2014 it was $8,130 which equates to a drop of 25%. The MS65 was down just 1.5%, currently at $3,230, and the MS64 is higher than the year began, now at $1,340, up $20. The rest of the series from Good through MS62 finished the year higher by 5%-7%, which is about the same rate as bullion for the year.

†††††The $5 Indian is a rare coin in MS66, and while it has fallen from $30,710 in early 2012, it did gain some back this year, up from an FMV of $23,290 in January to the current $24,640. The 1909 D is the common date in most grades, until it gets to the MS66 which has a total of just seven certified with none higher; the 1909 shows a total of fifteen coins certified in MS66 with two of those being + coins. The MS65 Type grade has slipped from an FMV of $8,880 to the current value of $8,530, down slightly less than 4% for the year. The MS64 is one of the biggest losers of the year in U.S. Gold, down over 16%, from $2,520 to the latest FMV of $2,110. This could be a coin to watch as it recoups some of this loss.

†††††The $5 Gold Liberty with Motto has been hit hard this past year, especially in MS65. While the MS66 is lower at $4,130, down only 2.4%, the MS65 has dropped like a cannon ball from an FMV of $3,060 down to $2,330, lower by nearly 24%. Other opportunities for buyers in the market have led to this extreme price drop. The MS64 was also down a considerable amount, over 8%, as this series got softer as the year winded down.

†††††In 2016, we saw record sales of modern bullion coins from the Mint followed by the resales of certified coins by dealers. The common $50 Gold Eagle in MS69 has gone up $80 from $1,310 FMV in early January to the current $1,390. This increase in premiums, along with the drop in premiums for rare U.S. Gold, indicates further that buyers are currently more interested in modern bullion coins. It could be a great time to buy before others realize the prices of these rare coins are just too low.









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