Archive for October, 2009

Have a safe and Happy Halloween Weekend….

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Inflation poor guide to future coin values

Wednesday, October 28, 2009

Inflation poor guide to future coin values
Posted by Dave

I received an e-newsletter that mentioned inflation and coin prices. Many people believe there is a connection. There really isn’t a direct connection, but to explain can seem more like a word game.

Most coin prices depend on average collector incomes and the willingness of these collectors to spend that income on certain coins.

Both factors fluctuate or change and inflation plays a role in what people are paid, but the link is not direct.

The prices of many coins that were hobby staples in the 1960s simply sat or declined during the 1970s even though active collectors had more money in the 1970s because of inflation. Some coins are still at or below 1960s levels.

The nature of collecting was changing. It always does. Attention was redirected to new areas. Morgan dollars really came into their own in the 1970s and built up quite a following right on through the market peak in 1989. Prices nowadays for many of those coins are lower than they were then despite 20 years of inflation.

On the other hand, key coins like 1804 dollars and 1913 nickels have actually outpaced inflation as the prestige factor of owning the great rarities helped incite buyers to want to own these numismatic masterpieces.

Online registry sets give certain coin prices a nice boost as certain collectors compete to buy the best. This creates a phenomenon where the prices of a couple of coins at the top end of the grading scale go through the roof while those pieces in the more affordable end of the uncirculated scale simply languish despite inflation.

A few Lincoln cents that any collector can buy for a dollar or two in BU or proof have brought tens of thousands of dollars because they happen to be the coins pronounced to be the best of the millions or billions that exist.

The problem with the great rarities and coins in the very top grades is that almost nobody gets to play in that park. Action in this park makes headlines and creates numismatic history, but it does not help the average coin buyer make any money.

Coin buyers who are not guided by their innate interest in collecting specific series or type sets must be able to pick out coins that will appeal to collectors at the future date they will wish to sell and in a grade those future collectors will wish to buy. That isn’t easy. Inflation won’t overcome mistakes.

The obvious area to point to today for success is that occupied by gold coins. The price of gold has risen dramatically from the government controlled $35 an ounce that prevailed 1934-1973. Prices for coins valued for their metallic content have soared beyond what inflation would have mandated, even if you go back to 1933.

The general price level is up about 12 times since 1934. That would put gold at $420 from its $35 starting point, but whatever number you pick, it seems that gold’s price has outpaced inflation at the moment.

So, while inflation is a factor in the eventual price of coins, it is not the only factor. To buy any coin simply on the basis of expected future inflation can easily lead to disappointment if the past is any guide.

It is far better to be a collector. Your odds of buying the right coins improve and you have fun doing it. 

Wednesday, October 28, 2009 1:24:48 PM (GMT Standard Time, UTC+00:00)  #  Comments [0]

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J&T Coins LLC Blog 2009-10-30 15:35:42

Friday, October 30, 2009

Collector American Eagles might be likely in 2010
Posted by Dave

Collectors are still complaining about the lack of uncirculated “W” mintmarked  and proof American Eagle silver coins this year due to the planchet shortage that has plagued the U.S. Mint since the middle of 2007.

Next year looks like a far easier time will be had by the U.S. Mint if an Austrian Mint forecast about 2010 is borne out.

I was reading Jon Nadler’s posting on the Kitco Web site yesterday. http://www.kitco.com/ind/nadler/oct292009.html#at

There he quoted the President of the Austrian Mint, Kurt Meyer, on the topic of how many one-ounce Philharmonic gold bullion coins his institution will produce.

Meyer’s forecast is a decline of 32 percent.

Since gold does not exist in a vacuum, such a significant decline would likely also be accompanied by a decline in demand for silver American Eagles.

Anything approaching a 32 percent decline would free up some 8 million silver planchets, a number large enough to accommodate any likely demand for the collector version of the silver American Eagle.

Will it happen?

Business forecasts are just that. But a forecast from an institution with the experienced staff of the Austrian Mint certainly has a far higher probability of being correct than those made by many other prognosticators one finds active today.

So, the one-year gap in the American Eagle series will be the focus of questions that will be sent to Coin Clinic by newcomers for the next 50 years much as they ask why there is a much longer gap in Morgan dollar production that stretched from the years after 1904 until production resumed in 1921.
 

Friday, October 30, 2009 1:19:02 PM (GMT Standard Time, UTC+00:00)  #  Comments [0]

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Russia 10 roubles 2009 - Kirov

Submitted by World Coin News
New bimetallic circulating commemorative:
“Russian Regions: Kirov Region”

(information by Antony)
LINK: Bank of Russia
Visit 1800blogger to see all of our industry leading blogs.

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Buzz with Dave Harper…Chronicles set ships fast….

Monday, October 26, 2009

Chronicles set ships rapidly
Posted by DaveReports are beginning to reach me from my readers that they have received the Lincoln Coin and Chronicles set from the U.S. Mint.

Rob Birnbaum e-mailed me, “Received it by Saturday. I like it and it was worth the time I spent ordering it.”

Nothing will overcome the memory of the ordering delays of Oct. 15 faster than rapid delivery of the coins.

The standard posted delivery date for the early orders was Oct. 30, so collectors will be pleased to get the sets ahead of time.

It certainly won’t hurt that secondary market prices are far higher than issue price of $55.95.

Harv Laser has been looking at the secondary market and he e-mailed me his findings.

“Highest price I can find in eBay closed auctions is still $349.95 from 15 October, 2009. Second highest is $299.99 from yesterday (Oct. 21), he wrote.

“I haven’t seen any show up in dealer print ads yet, but I haven’t gotten your latest issue yet.”

Perhaps having a few problems ordering isn’t all bad. It enhances that sense of triumph among collectors after all is said and done.

Perhaps what the Braille Education Set needs are simulated order delays that would be noticed quickly by collectors.

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Buzz with Dave Harper..What kind of shape are we in?

What kind of shape are we in?
Posted by Dave

What condition is the numismatic hobby/industry in? Numismatic News staff is preparing a State of the Industry issue that will go into the mail in the middle of November.

It is important to obtain a wide variety of evaluations from the people on the ground: the collectors and dealers who make it all work.

I would like this blog to serve as a personal invitation to you to send me an e-mail with your assessment.

I have a list of questions you can choose from. You can answer any or all of them, or direct your comments to some issue that is not even mentioned.

In a way it is a free-for-all. Don’t hold back. The rest of us might discover that what’s on your mind should be our concern as well.

Here are the questions:

1.       What were your successes in 2009?
2.       Where do you expect to find your opportunities in 2010?
3.       How do you expect the overall 2010 market to compare to 2009?
4.       What would give you the biggest boost in 2010?
5.       What is your biggest concern for 2010?
6.       Has the hot bullion market helped or hurt you? Why?
7.       Will your clients be in a buying mood in 2010?
8.       What will your clients be most interested in buying in 2010?
9.       What are the effects of tight credit?
10.     What action can hobby papers take to give you a boost?

To personalize it, let us know how long you have been active in the hobby. E-mail a photo if you like. Photos always improve any presentation. If you only feel like writing a couple of lines, you can do that to.

E-mail me at david.harper@fwmedia.com. Or post your comments here on the blog.

Thank you.

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Gold rides emotional wave, to stay above $1000

  Gold rides emotional wave, to stay above $1000
 
  LONDON (Commodity Online): What is happening to gold? Is every investor in the world buying gold dumping equity and other commodities? Why the mad rush to buy gold even at a rate above $1000 per ounce?

These are questions that haunt market analysts for the past one year. Still there seems no end to the crave for gold among buyers. Indians, who normally stay away from gold when the prices are above  Rs 15,000 per 10 gm, bought 56 tonnes of gold during the Diwali week, throwing recession blues to the wind.

Then investors thought after Diwali, the main occasion for Indians to buy gold, the gold prices will come down and the demand for the yellow metal will ease. No way! Things are back to square one with more and more people rushing to buy the yellow metals whereas the supply is not matching the demand.

Net long non-commercial and non-reportable positions on COMEX, a proxy for investor flows, rose to an all-time high of 27.58 million ounces at the end of September, according to the World Gold Council.

And it is no longer only the exchange-traded funds (ETFs), which pushed prices up in 2008, piling in. Quantity of gold that ETFs have added in the past few months has stayed fairly constant. While gold ETFs added 440 tonnes in the first quarter of 2009, the amount added since then has dropped to 29 tonnes.

The high price of gold is being supported by the weak dollar and aided by speculation about its future as the first-choice reserve currency for trading commodities such as oil. Fears about inflation next year are helping, too, although neither of these is enough to explain fully its popularity. The gold spot price rose much more quickly than US inflation expectations for the next five years in September.

Analysts believe that the price will stay around the $1,000 mark on average for the next few years.

However, supply should not be constrained in the near future. Although output in South Africa, the world’s biggest gold producer for most of the past century, has slowed, China has come forward to take its place. The burgeoning scrap market should also ensure that there are few supply problems in the short term.

At the same time, physical demand for gold is low. The appetite for gold jewellery has slowed around the world, with America particularly badly hit, and it is unlikely to pick up until prices fall substantially.

Sentiment is playing a key role in boosting the price of gold, which might be useful for a short-term trade but not for a long-term play at the moment..

Comments

Gold rides emotional wave, to stay above $1000

  Gold rides emotional wave, to stay above $1000
 
  LONDON (Commodity Online): What is happening to gold? Is every investor in the world buying gold dumping equity and other commodities? Why the mad rush to buy gold even at a rate above $1000 per ounce?

These are questions that haunt market analysts for the past one year. Still there seems no end to the crave for gold among buyers. Indians, who normally stay away from gold when the prices are above  Rs 15,000 per 10 gm, bought 56 tonnes of gold during the Diwali week, throwing recession blues to the wind.

Then investors thought after Diwali, the main occasion for Indians to buy gold, the gold prices will come down and the demand for the yellow metal will ease. No way! Things are back to square one with more and more people rushing to buy the yellow metals whereas the supply is not matching the demand.

Net long non-commercial and non-reportable positions on COMEX, a proxy for investor flows, rose to an all-time high of 27.58 million ounces at the end of September, according to the World Gold Council.

And it is no longer only the exchange-traded funds (ETFs), which pushed prices up in 2008, piling in. Quantity of gold that ETFs have added in the past few months has stayed fairly constant. While gold ETFs added 440 tonnes in the first quarter of 2009, the amount added since then has dropped to 29 tonnes.

The high price of gold is being supported by the weak dollar and aided by speculation about its future as the first-choice reserve currency for trading commodities such as oil. Fears about inflation next year are helping, too, although neither of these is enough to explain fully its popularity. The gold spot price rose much more quickly than US inflation expectations for the next five years in September.

Analysts believe that the price will stay around the $1,000 mark on average for the next few years.

However, supply should not be constrained in the near future. Although output in South Africa, the world’s biggest gold producer for most of the past century, has slowed, China has come forward to take its place. The burgeoning scrap market should also ensure that there are few supply problems in the short term.

At the same time, physical demand for gold is low. The appetite for gold jewellery has slowed around the world, with America particularly badly hit, and it is unlikely to pick up until prices fall substantially.

Sentiment is playing a key role in boosting the price of gold, which might be useful for a short-term trade but not for a long-term play at the moment..

Comments

Platinum demand soars in China

  Platinum demand soars in China
 
  BEIJING (Commodity Online): In China platinum is taking big strides with the demand for the metal rising even in remote areas.

Higher sales are being fueled by holiday-related jewellery sales and for bridal rings, which were helped by 2009 being considered an auspicious year for getting married and an increasing desire for platinum.

Platinum jewellery sales in China increased by more than 400,000 ounces, compared to the same period in 2008, largely in response to lower platinum prices, but also given the reduced premium over gold.

This market response highlights the strength of platinum jewellery branding and the different nature of Chinese platinum jewellery demands, as economic conditions continue to depress jewellery sales in most Western markets. The Chinese market is unsaturated, and the number of retail outlets continues to grow.

The strong growth in platinum jewellery demand is supported by statistics published by the Shanghai Gold Exchange, which show that the total volume of platinum sold in the first half of the year was up 81 percent over the same period last year. The majority of the sales were in the jewelry category.

Platinum prices have held steady to date, providing an opportunity for further growth in platinum jewellery demand.

Increased sales have been helped additionally by new store openings and manufacturers holding larger working stocks to meet increased demand.

The second half of 2009 is expected to deliver higher levels of spending, including increases in gift jewelry and bridal jewelry purchases.

Chinese people see 2009 as an auspicious year for marriage, since the number nine implies forever love.

It is estimated that more than 10 million couples tie the knot each year in China. According to China Wedding Registry, 10.5 million couples registered their marriage in 2008, a 10.6 per cent increase in year-on-year growth.

It is estimated that marriages will see 6 per cent growth to 11.5 million marriages in 2009, and that marriages will number 11.82 million in 2010.

Since 2000, China has been the world’s largest consumer market for platinum jewellery. Sales increases were reported to be strong in both first- and second-tier cities.

Festive occasions have become major drivers of sales for consumer products, and jewellery is no exception..

Comments

Platinum demand soars in China

  Platinum demand soars in China
 
  BEIJING (Commodity Online): In China platinum is taking big strides with the demand for the metal rising even in remote areas.

Higher sales are being fueled by holiday-related jewellery sales and for bridal rings, which were helped by 2009 being considered an auspicious year for getting married and an increasing desire for platinum.

Platinum jewellery sales in China increased by more than 400,000 ounces, compared to the same period in 2008, largely in response to lower platinum prices, but also given the reduced premium over gold.

This market response highlights the strength of platinum jewellery branding and the different nature of Chinese platinum jewellery demands, as economic conditions continue to depress jewellery sales in most Western markets. The Chinese market is unsaturated, and the number of retail outlets continues to grow.

The strong growth in platinum jewellery demand is supported by statistics published by the Shanghai Gold Exchange, which show that the total volume of platinum sold in the first half of the year was up 81 percent over the same period last year. The majority of the sales were in the jewelry category.

Platinum prices have held steady to date, providing an opportunity for further growth in platinum jewellery demand.

Increased sales have been helped additionally by new store openings and manufacturers holding larger working stocks to meet increased demand.

The second half of 2009 is expected to deliver higher levels of spending, including increases in gift jewelry and bridal jewelry purchases.

Chinese people see 2009 as an auspicious year for marriage, since the number nine implies forever love.

It is estimated that more than 10 million couples tie the knot each year in China. According to China Wedding Registry, 10.5 million couples registered their marriage in 2008, a 10.6 per cent increase in year-on-year growth.

It is estimated that marriages will see 6 per cent growth to 11.5 million marriages in 2009, and that marriages will number 11.82 million in 2010.

Since 2000, China has been the world’s largest consumer market for platinum jewellery. Sales increases were reported to be strong in both first- and second-tier cities.

Festive occasions have become major drivers of sales for consumer products, and jewellery is no exception..

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