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Pierre_Henri

Times are Tough : How ZAR coins are doing at the moment ...

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I have done a small study to compare the prices of ZAR Paul Kruger coins sold over the last few months on Bid-or-Buy compared to prices reached about 12 months ago.

My conclusion is that it is buying season and not selling season.

ZAR copper is significantly down with prices for ZAR pennies of 1892 (for example) dropping by more than 50%

Where 12 months ago you could have expected an AU 1892 Penny getting R1500, you can now expect around R600 – that is a drop of around 60%. In MS62 the price dropped by around 50% and in MS 63 about 35%.

In silver coins there were also setbacks: - Where, for example, the average selling price for an AU 58 Shilling of 1897 was then R800, they currently go for around R500 – a drop of nearly 40% while the 2-Shilling of the same date and grade dropped by “only” 20% from R1500.00 to R1200.00.

 

As far as gold goes, with the 1894 Half Pond as an example, the price in XF 45 seems to drop by around 30% from R5500.00 to R4000.00 while in AU 58 the price dropped by say 18% from R24 000.00 to around R20 000.00

I can publish some more results on the forum but as many of the sales were made over the holiday season, prices may have been influenced by that – so I must probably wait until say March to publish the results here?

Whatever, like I have said, this seems to be buying season. I myself do not collect ZAR, but are seriously considering all top Union coins being offered on BoB at the moment because the same kind of bargains should be found there!

Regards

 

Pierre

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Thanks PH. We did notice a drop in sales over the December period, but this is traditionally the quiet period for coins and notes. Possibly wait til after January?

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Times are tough for sure.

 

I've spoken to quite a few people recently in different industries like property, construction etc. and they are all battling.

 

Personally, I think even tougher times are coming, if you look at the Eurozone crisis, Iran etc etc.

 

I have the news on in the background at the moment and there are serious concerns about another global recession.

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Coin market

 

According to my sellings there are only a few locations world-wide, where buyers of really rare and expensive coins live.

 

I want to be honest, but there are few people where the supply with fiat money is no problem for them.... Some years ago there were rich Russians buying coins, now the greatest demand for gold is from mainland China.

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Hi

 

Sad how new coin collectors are put off by certain postings on the forum...

 

See this: http://forum.bidorbuy.co.za/coins-notes-numismatist/15700-coin-collector.html

 

I do not see any pessimism in any of those comments and this is true whether anyone agrees with them or not.

 

And even if it was, it compares nothing to the "cheerleading" I see from most posts on this forum which are blatantly in favor of rising prices.

 

The fact of the matter is that anyone who spends every last Rand or cent on coins has no idea how to manage their money and is taking excessive risks. Buying coins is a substitute among alternative forms of consumption and a form of SPECULATION. Those who are buying coins instead of consumer goods should not really care what happens to their prices. And anyone who does not know the difference between speculating and saving is potentially going to learn that the hard way.

 

The fact of the matter is that those who want to improve their collections should be in FAVOR of LOWER prices. How can that be called "pessimistic"? Since when is paying LESS for anything a bad thing?

 

It it is only for those who are coin "investors" and especially those who have a disproproportionate amount of their wealth tied up in them that should care. But the correct remediation to that problem is not to criticize others for not agreeing with them but to remdy that deficiency in their financial management by adjusting their exposure.

Edited by jwither
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I have done a small study to compare the prices of ZAR Paul Kruger coins sold over the last few months on Bid-or-Buy compared to prices reached about 12 months ago.

My conclusion is that it is buying season and not selling season.

ZAR copper is significantly down with prices for ZAR pennies of 1892 (for example) dropping by more than 50%

Where 12 months ago you could have expected an AU 1892 Penny getting R1500, you can now expect around R600 – that is a drop of around 60%. In MS62 the price dropped by around 50% and in MS 63 about 35%.

In silver coins there were also setbacks: - Where, for example, the average selling price for an AU 58 Shilling of 1897 was then R800, they currently go for around R500 – a drop of nearly 40% while the 2-Shilling of the same date and grade dropped by “only” 20% from R1500.00 to R1200.00.

 

As far as gold goes, with the 1894 Half Pond as an example, the price in XF 45 seems to drop by around 30% from R5500.00 to R4000.00 while in AU 58 the price dropped by say 18% from R24 000.00 to around R20 000.00

I can publish some more results on the forum but as many of the sales were made over the holiday season, prices may have been influenced by that – so I must probably wait until say March to publish the results here?

Whatever, like I have said, this seems to be buying season. I myself do not collect ZAR, but are seriously considering all top Union coins being offered on BoB at the moment because the same kind of bargains should be found there!

Regards

 

Pierre

 

I do not follow coin prices (including SA) as closely as I used to. But what I can tell you is that for at least some of the examples you use, I do not believe those prices are abnormally low at all. The 1892 1D and 1897 1/ are common coins. Until the last year or two, I recall an 1892 MS-62 1D sold in the vicinity of $400 to $500 and an MS-63 around $650. An AU-58 maybe $250. But these were not BoB prices. Given how many there are of a date like this one, I believe that the "discounts" you quote are more than reasonable. The 1898 1D is another coin that I consider overpriced given that there are well over 1000 MS including 160+ RD in the census. With availability like that, a price of $50 for an MS-63 BN is not too low.

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Thanks Pierre for your posting,

 

I see the downturn in ZAR prices as being a correction move when collectors reappraise the true scarcity of coins in grades as given by the Population reports from NGC & PCGS.

 

Some Union coins that are much scarcer are getting the prices they deserve because the buyers are getting more objective in their decisions and the "hype" for want of a better word that has supported ZAR traditionally is waning a bit. A good example is January's Heritage Sale where an MS65RB 1933 Halfpenny sold for $8000 or R76 000 with costs. This coin is the best of only 8 coins graded by NGC and PCGS and that area of the market has seen some big interest in the last few years.

 

Dont get me wrong, I still think ZAR will always attract many local and even international collectors and investors but as the 1928 Pattern Brass Sovereign showed in January's Heritage, a unique Union coin will fetch equivalent prices to other unique "ZAR" coins.

 

My thoughts

 

Geejay

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Geejay,

 

The most likely explanation for why the "collector" coins Pierre used as examples have declined in price recently is not because of any reassessment by buyers and sellers, but probably because those who buy them cannot afford to pay the prior prices and presumably, at least some of those who owned them sold them and were willing to accept the new lower prices. Some or many probably did so because they need the money. In that sense, I would agree that the "times are tough" reason is the correct one. I do not follow US coin prices closely but to my knowledge, this is exactly what has happened here since late 2007 though since US coins are a much bigger market, it varies more than it will with SA coins.

 

I understand the point you are making but this particular comment implies to me that collectors or at least "investors" buy their coins (more often than not anyway) by making an objective assessment of their relative merits. There is no evidence of that whatsoever. Not in SA coins, not in US coins and not anywhere.

 

There is no real accounting or explanation for why coins sell for the prices they do. I have attempted in many prior posts to explain in general terms what SEEM to be the most important factors, but how collectors and "investors" apply them to specific coins only has a

weak correlation to it, if any at all.

 

As I have explained many times before, the difference in the appearance between coins such as this 1933 1/2d and those slightly below it in the census more often than not is not justified in the pricing, especially those in SA whether Union or ZAR. Because this coin does not sell very often, I cannot tell you what a lower grade specimen sells for now. My guess is that in this instance, the difference with a lower grade BN MS is not that great. But most likely, the difference between lower grade MS and higher grade AU is large. I happen to own this coin in AU-55 and paid about $150 for it.

 

You also might have seen that 1932 PCGS AU-58 1d on eBay recently. It sold for a paltry $210 which is a pathetically low price for such a scarce coin. My guess is that the NGC MS-63 BN I sold last year would probably sell for at least 10 times that price now, maybe more or a lot more. There is no sense or justification in that at all.

 

What I have seen from both actual pricing and comments here on this forum is that SA coins (both Union and ZAR) purport to follow the US pricing structure. That is my interpretation what collectors claim is the basis within a series (Union or ZAR) anyway.

 

In actuality, South African coins are not consistent with US pricing at all. By this, I am not referring to the absolute prices these coins have, but the relative differences between them. And as nonsensical as I find the pricing of many US coins, I find that what exists in SA makes even less sense.

 

Other than me, I have never seen ANYONE on this forum EVER admit that ANY coin discussed here is overpriced, except for the Mandela issues. It seems that no matter how ridiculous a coin's price is in a particular grade or what it sells for versus other coins, it is never too much, it is fairly priced or even still underpriced and not only is not going (or even deserve) to lose value, it is going to be worth more in the future if not explode higher.

 

Evaluating SA coin on their apparent relative merits, the best values in Union would seem to be the scarcest KGV and KGVI circulation strikes in a grade like AU-55 or AU-58 and in some instances, even "problem" coins such as that 1931 NGC "AU Details" 6D which sold on Heritage last year for $1265. The next best would seem to be proof sets such as the 1936 and 1938 that I believe you own. Lastly, I would rate coins which ACTUALLY look much better than others (regardless of their numerical grade) such as PR CAM that sell for small premiums.

 

With ZAR, there were quite a few coins in this last Heritage sale that sold at relatively reasonable prices. (I call them reasonable but presumably, they were disappointing to most here or else there would have been far more celebrating.) The 1893 PCGS AU-58 2/ and 1893 XF-45 1/ are two examples. As PCGS stated, I have never seem the 2/ in this quality for sale before and it is scarce and very highly collected coin.

 

None of examples I gave are "investor" coins, but given their current relative prices, I still expect them to do better LONGER TERM than "conditional" rarities or those near it. I do not know what the price spread limit is going to be, but given how large it already is today, these coins are vastly better values from both an "investment" and numismatic standpoint.

Edited by jwither
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Hi PH, It is disconcerting to see such drops on the market. Ebay seems to have the same problem, although real quality coins still reflect a lot of attention by buyers. The drops of the prices of gold and silver have also to do with this problem, but both are currently rallying well and show a good upward trend. International opinions are that gold will soar during this year and silver will too. Whilst gold is a commodity that is sought after for its inherent value, silver is a commodity that has so much industrial usages that currently more silver is used by industry than is mined and produced. All the best, Dirk

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