Archive for August, 2011

August 29, 2011

Dealers Starved For High-End Coins

Even though spot gold has dipped and remains volatile, high end rarities are heavily sought after.  Even more common coins of premium quality are showing %15 premium over coins of average quality. While many investors are sweating over the ups and down in other markets keen buyers are searching out the best high end coins they can find. These rare specimens will be the big money makers over the next 5-10 years, while common, more bullion sensitive coins are lighting up the short term.

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August 26, 2011

GOLD’s Volatility Benefits Bull Herd!

Laurence Marvin, LA Stock Market Examiner

August 24, 2011

1933 double eagle trial: At long last, a conclusion

Government calls decision vindication for the American people

By Steve Roach-Coin World Staff | July 21, 2011 10:55 a.m.

A 10-member jury unanimously decided that the 10 1933 Saint-Gaudens $20 double eagles allegedly found by the Langbord family of Philadelphia in 2003 belong to the U.S. government. The verdict was rendered July 20, the 10th and final day of the Langbord trial, after about five hours of deliberation.
Members of the jury left the courtroom to begin deliberations at 10:27 a.m. and returned to read the verdict at 3:25 p.m.
The jury’s verdict was read by Juror No. 9, who served as foreman. Each member of the jury read his or her verdict and each agreed that the government had met its burden of proof.
When Judge Legrome D. Davis issued instructions to the jurors at the beginning of the day’s session, he noted that this “unusual case” was special, adding, “You’ve seen something most juries don’t see” and added that he himself had not seen in his 24 years of being a judge. Dealing with a case that provided a journey into the past with few live witnesses, Judge Davis instructed the jury on how to evaluate evidence, the elements of the forfeiture claim and information on how they were to deliberate.
He reminded the jurors that they must judge the facts, and pointed out that the word “verdict” is Latin for “speak the truth.” Judge Davis described the standard of proof — “Fair preponderance of evidence” — as “more probably true and accurate than not.” He told the jury to envision a scale and that if the scale tipped “ever so slightly” in favor of the government, then the government should win. But he also reminded the jury that the burden of proof fell on the government.
He described a forfeiture trial: here, the Langbords deny the government’s right to forfeit coins and reminded the jury that it was a civil trial, not a criminal trial.
He said that for the government to win, it had to prove by a preponderance of the evidence that: First, in the past 1933 double eagles belonged to the United States government; second, that they were stolen; and third, that whoever stole them did it knowingly to deprive the government of property and to convert the property to his or her own.
After the verdict was announced, both Roy and David Langbord made a speedy exit from the courtroom. They along with their mother, Joan Switt Langbord, had turned the 10 coins over to the government in 2003 seeking a declaration of authenticity. The government confiscated the coins and the Langbords sought to regain possession and ownership through the court case. The government accused Mrs. Langbord’s father, Israel “Izzy” Switt, of having illegally obtained he coins. He died in 1990 at the age of 95.
Assistant U.S. Attorney Jacqueline Romero, the government’s lead attorney, said immediately after the verdict that the “People of the United States of America have been vindicated.” She said the outcome of the trial should send a strong message that no matter how long stolen government property remains at large, it belongs to the government.
Regarding ultimate disposition of the coins, Romero had earlier in the day sidestepped her prior statement that implied the coins should go to a museum, calling it a “rhetorical flourish.” However, she said post-trial, “I don’t believe they’ll be melted down,” and added that they would likely be displayed in some capacity.
Tom Jurkowsky, director of the U.S. Mint’s Office of Public Affairs, said after the trial: “A decision on where the coins will be stored or displayed has not been made.  When that decision is made, the United States Mint will make an appropriate announcement. The pieces will remain at the United States Bullion Depository at Fort Knox until such decisions are made.”
The 10 1933 $20 gold coins were brought to Philadelphia during the trial for the jurors to inspect, but have been returned to the U.S. Mint’s bullion depository in Fort Knox, Ky., where they had been stored since 2003.
Romero described the case — which she had worked on for five years, as “the coolest case you could get as an attorney.”
When asked what she would say to collectors who undoubtedly would be disappointed that these coins will not come to market, Romero said that in the past years as she has learned about coins, she has found that “most coin collectors are outstanding people” who wouldn’t want to be collecting stolen goods.
David Enders Tripp, the government’s numismatic expert, said after the trial that he was “personally pleased” by the result, adding that it was a fitting conclusion to the decade that he has spent looking into this “wonderful story.” ■
August 24, 2011

1855-S $3 Gold Coin Brings $1,322,500 As Top Lot In $31+ Million Chicago Rare U.S. Coin Event

Strength seen in all areas of the rare coin market in Aug. 11 Platinum Night Auction

DALLAS, TX – A unique 1855-S $3 PR64 Cameo NGC, CAC, Ex: Golden Gate Collection, a supreme rarity in the world of numismatics, brought $1,322,500 – along with applause in the auction room – as the top lot of Heritage Auctions’ Aug. 11-12 Signature® U.S. Coin & Platinum Night Auction at the Marriott-Chicago O’Hare (all prices include 15% Buyer’s Premium).

Overall the auction realized more than $31.345 million (not including Post Auction sales), as 5,154 bidders vied for 7,370 lots, translating into an impressive sell-through rate of 91% by total lot value and 95% by total lots.

“These are great results with strong showings in every corner of the market,” said Greg Rohan, President of Auctions. “Collectors are continuing to pursue the top rarities that we gather for each auction and non-traditional buyers are looking to temper their portfolios against the tumult of world financial markets. The combination resulted in final figures that were nothing short of remarkable.”

Directly illustrating the interest across the spectrum of types, a trio of diverse coins rounded out the top quartet of the auction. An 1893-S Morgan Silver Dollar, MS67 NGC, from the Norweb and Jack Lee Collections, and the highest-graded NGC-Certified specimen, took the second spot in the auction with a $546,250 price realized, giving collectors of the ever-popular Morgan Dollars something to cheer about. An 1863 $10 PR65 Deep Cameo PCGS, CAC, the sole finest at PCGS, charmed collectors into several rounds of intense bidding before finishing the auction $299,000 and an historic 1796 $2 1/2 No Stars MS61 PCGS, CAC, the finest that Heritage has offered in three years, realized $276,000.

 

 

August 16, 2011

Gold’s climb is perfectly rational

FORTUNE — After taking a breather there for a few months, gold prices have resumed their seemingly inexorable rise to infinity. Amidst the mayhem of last week, the metal briefly touched $1,800-per-ounce before sliding back to $1,770 as the stock market rebounded. Those “cash-for-gold” signs you used to see only in distressed neighborhoods? Don’t look now, but your mother was probably selling a few sets of earrings last week.

To get a read on things, Fortune caught up with Rachel Benepe, co-manager of the $3.1 billion First Eagle Gold Fund (SGGDX). Along with Abhay Deshpande, Benepe stepped into the very big shoes of Jean-Marie Eveillard when he transitioned to a senior advisor role at the fund in March 2009. And they haven’t tarnished the fund’s reputation yet: Had you invested $10,000 in the fund five years ago—which only requires a minimum of $2,500—you would be sitting on $18,766 today, as opposed to losing money in the S&P 500.

Let’s get right to the point. Are people insane to be buying gold at these levels?

We don’t forecast the price of gold, and that’s because we view it as a hedge. Considered from that perspective, no one can really say if it’s too expensive or not, as long as the price moves for rational reasons. Look at the price changes since Lehman failed in 2008. Every move of gold has happened for a rational reason. We haven’t seen a single move out of context. Last week, there were obvious issues in the U.S. and Europe that kind of came out of left field, and gold hit $1,800. Is someone insane for wanting to protect their portfolio? I don’t think so. Keep in mind, too, that more and more people are becoming aware that it can serve as hedge. That, too, has been driving up the price. But to say it’s mispriced is the wrong way to look at it. It protects your purchasing power. Gold should go up when equities down. It doesn’t matter which way it’s moving, either, as long as it’s happening in a rational way.

August 11, 2011

Gold Market Highs and Their Impact on Rare Coins

Do I sell my rare coins now that gold is so high? NO. Many investors are under the illusion that because gold is at record levels, their U.S. Rare Coins are as well. Gold at record levels actually indicates that it is a buyer’s market in rare coins. Historically rare coins experience their own market highs years after bullion peaks.

Take for example the common $20 Gold Saint Gaudens vs. Gold Bullion. Between 1975 and 1980 gold rose from $133.00 to $850.00 During the same time the Saint Gaudens in MS-65 went from $220.00 to $1,250. As gold started to fall from its peak of $850.00 down to $310.00 by 1982 the Saint Gaudens Shot up, way up. By 1989 it reached its own peak of $4,400.00(while gold was a mere $395.00).

Bottom line; wait for the bullion market to significantly soften before looking to sell your rarities. Gold bullion and rare coins are not attached at the hip. If anything, gold going up helps boost the confidence of buyers looking into rare coins while gold going down boosts the price of rare coins. Take advantage of the fact that the hordes are busy buying gold bullion and neglecting the true rarities.

August 10, 2011

Investors flee to gold

NEW YORK (CNNMoney) — Stock-shocked investors are fleeing to gold, pushing the precious metal to new heights.

Gold reached a new intraday high of $1,782.50 per ounce in electronic trading before ending at $1,743. That’s an increase of $29.80, or about 1.7%, compared to its Monday close. On Monday, gold broke $1,700 for the first time.

The current flight to gold has been by a nasty stock market plunge. On Monday, the Dow Jones industrial average plummeted 624 points, or about 5.5%, and the Nasdaq and S&P 500 dropped nearly 7%. It was the worst day on Wall Street since the 2008 fiscal crisis.

The rise in gold and the plunge in stocks are the result of Standard & Poor’s downgrade of U.S. debt on Friday from AAA to AA+. This has undermined faith in the United States and the contagion has spread to markets around the globe.

“Against this backdrop, together with strong Asian gold demand and continued purchasing by central banks, gold continues to demonstrate its attributes as a hedge against credit risk, currency and inflation/deflation risk,” wrote Marcus Grubb, managing director of investment at the World Gold Council, in an e-mail to CNNMoney.

Jono Remington-Hobbs, precious metals analyst for Fastmarkets Limited in London, said that gold has been on a 10-year boom. It has recently become more valuable as other safe havens, such as the Swiss franc and Japanese yen, lost their luster.

The key to gold, he said, is that it’s a strong asset now, just like it was a strong asset 2,000 years ago.

“An ounce of gold would have bought you a great suit then; it would buy you a great suit now,” said Remington-Hobbs.

While the economic malaise has been a boon for gold, which is up 15% over the last month, it has had the opposite effect on oil, whose price has plunged more than 16% over the last month.

S&P worst case scenario could happen

Oil ended at $79.30 a barrel Tuesday. Just two weeks ago, oil was flirting with $100 per barrel.

Gold is also still far from its true peak, when adjusted for inflation. The metal hit its real record on Jan. 21, 1980, when it rose to $825.50 an ounce. Adjusted for inflation to 2011 dollars, that translates to an all-time record of $2,261.33 an ounce. To top of page

August 3, 2011

INVENTORIES DRYING UP

GreysheetMixed results were experienced at the summer F.U.N. show in Orlando. Attendance was moderate, but not expected to be anywhere near the overwhelming attendance usually seen at the January F.U.N. conventions. Friday’s attendance may have been somewhat diminished because of the final Space Shuttle launch, which drew in an estimated one million spectators. Not surprisingly, given the current market conditions, pickings were slim for some dealers at the show who were looking to purchase high-end coins. Dealer inventories have been lacking in such material for many months, and astute sellers will likely wait until the upcoming ANA convention in Chicago next month to offer their wares . Sales of lower to middle priced coins were reported to be much more active than for rare coins of premium quality in the higher price range which were scarce and remain so. Heritage’s Orlando auction hammered a total in excess of $11.2 million. We have listed a few of the many highlights herein.
Dealers are finding that the motivations of customers have largely changed—as a result of economic considerations—from buying as collectors, to buying out of fear for financial preservation. This fear based buying most often focuses on purchasing bullion products. However, there are those who are moving into rare coins as well. Undoubtedly, some of this has to do with information found on the internet and other media. Coins promoted by many of these sources include common generic material that can be purchased in bulk, such as $20 Saint-Gaudens and Circulated Morgan Dollars.
The Langbord trial, regarding the family’s ten 1933 $20 Saint-Gaudens, got under way July 7 in Philadelphia. A jury was selected, and opening arguments were presented. The government contends that the coins were stolen, as none of them were legally released into circulation. The Langbords contend that there was a window of time when the public was allowed to make exchanges for freshly minted Gold coins, and there’s a real possibility that either directly or indirectly this is how Joan Langbord’s father, Israel Switt, obtained these ultra rare Double Eagles. The trial is expected to last about three weeks. The 51st annual Missouri Coin Festival is scheduled for July 28-30 at the St. Charles Convention Center. Scotsman auction house will hold their Midwest Summer Sale July 29 in conjunction with the show. The auction will include an eclectic mix of US coins and Paper Money, with a group of sixty-five modern Chinese rarities.

August 3, 2011

$2.5 Trillion Debt Ceiling Hike Will Unleash A Gold Price Surge To $1,950 And Higher In 2011

There’s uncanny correlation between the debt ceiling and the price of gold. Now that we know the final amount of the debt ceiling hike, somewhere in the $2.5 trillion ballpark, it allows us to extrapolate where gold will end up as a result of the debt ceiling hike. A simple correlation rule of thumb allows us to predict that gold will be at $1,950 by the end of the year if it simply retains it close correlation to the debt ceiling. Should Bernanke announce that he will additionally need to monetize some or all of this incremental debt amount, we anticipate that gold will be well over $2,000 by the end of the year, courtesy of yet another round of accelerated dollar debasement, which also means that real gains in US stocks will be negated courtesy of the devaluation of the currency in which they are priced. The same, however, does not apply for gold, which with every passing day is priced in nothing but itself.