Gold Soars To Seven-Week High
Interview with Van Simmons, a co-founder of PCGS:
The Daily Crux: Van, what’s the state of the rare coin market these days?
Van Simmons: The rare coin market is healthy… It’s very liquid. But we have seen a bit of a shakeout with the price of gold going down. So it’s taken many of these coins out of the so-called “weak hands.” Most of the people left are the strong, longer-term investors.
Some of this area has become very inexpensive, and I can assure you it’s not going to stay this cheap forever. This is how the rare coin market works… it rarely trades step for step with precious metals.
As this bull market matures and begins to draw more interest from the public, I think you’re going to see investors increasingly move away from bullion and into assets like rare. Considering how inexpensive some of the coins have become, I think they’re some of the best values in the world today.
Crux: Are there any coins you’re especially excited about right now?
Simmons: Absolutely. The number one value in the world today is probably the pre-1933 Saint-Gaudens gold coins graded MS65 – meaning they’re in mint condition.
Let me put it in perspective… These coins should easily trade at two or three times the price of gold. At the previous all-time peak in 1980, gold traded for $850, but the MS65 Saint-Gaudens went for $5,500 at their peak… meaning they traded for more than six times the price of gold.
Today, they trade at about $2,100, or less than 60% over the price of gold. This is the cheapest these coins have ever been relative to the price of gold. It’s hard to imagine them becoming much cheaper.
There is no doubt that the top 25% pf the market is on the rise. The demand for the BEST coins is as huge as ever. What is even more critical to note: the new buyers premium of 17.5% did not seem to affect prices. The coin market is not in a boom or a huge “up cycle”. What you are seeing price wise is the cream separating from the dreck.
Coin Market Outlook for 2012
The psychological mental freeze of the stock market has passed. Many investors are now totally convinced they need a serious portion of their assets in hard assets. Some people are hoarding (we won’t say what one group is buying every example of a certain coin they find), some people are buying generics (the premiums have grown slightly), and many have started collections-real no non sense collections that when completed will equal high six figures to several million dollars!
Experts firmly predict that the better coins being tucked away now, WILL be worth substantially more in as little as two years.
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