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Pierre_Henri

Impact of the Corona Pandemic on the Coin World.

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Pierre_Henri

I have received this article via Lydia Maneveld from the Border Numismatic Society in East London.

Demand for Gold and Silver “Ballistic”

(April 10, 2020)

By Richard Giedroyc

First, all the over-the-counter sales stopped. Then all public participation in auctions was curbed. Local coin clubs cancelled meetings. It appeared the corona virus had impacted the business of coins!

Suddenly the internet became the place to buy coins. Now the market is going in the other direction – the demand for gold and silver composition coins has gone ballistic. Demand is outstripping supply.

According to an April 2 Bloomberg news release, “Some dealers are desperately contacting clients to see if anyone is willing to sell their gold bars and coins, and offering a rare premium over spot prices.”

As Bullion Star (Singapore) analyst Ronan Manly recently put it, “We are seeing an unprecedented situation where huge customer demand and the disconnect between physical prices and spot prices is driving buy premiums high.”

The question active collectors need to consider is, how many of the current buyers are collectors or will become collectors? How many are investors and speculators looking for a short-term safe haven while equities continue to tank? What will happen if these buyers decide to re-sell once the stock market begins to rebound?

Precious metal coins are selling at a premium above their intrinsic value spot price regardless of the collectability of these coins. Truly rare coins are selling for surprisingly strong prices at auctions despite the decline in discretionary money and the consideration that all lot viewing and bidding must be done online. The times are changing for collectors just as much as they are for the general public.

It’s a strong market, but be wary of speculation.

 

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jwither
3 hours ago, Pierre_Henri said:

As Bullion Star (Singapore) analyst Ronan Manly recently put it, “We are seeing an unprecedented situation where huge customer demand and the disconnect between physical prices and spot prices is driving buy premiums high.”

The question active collectors need to consider is, how many of the current buyers are collectors or will become collectors? How many are investors and speculators looking for a short-term safe haven while equities continue to tank? What will happen if these buyers decide to re-sell once the stock market begins to rebound?

Precious metal coins are selling at a premium above their intrinsic value spot price regardless of the collectability of these coins. Truly rare coins are selling for surprisingly strong prices at auctions despite the decline in discretionary money and the consideration that all lot viewing and bidding must be done online. The times are changing for collectors just as much as they are for the general public.

We discussed the physical premiums in the topic I started.  This a temporary situation which has happened before.  My last recollection was around 2013 when silver initially fell (form the 2011 peak) below $20.  It may last longer this time but ultimately, I am sticking with the same prediction 

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jwither
3 hours ago, Pierre_Henri said:

As Bullion Star (Singapore) analyst Ronan Manly recently put it, “We are seeing an unprecedented situation where huge customer demand and the disconnect between physical prices and spot prices is driving buy premiums high.”

The question active collectors need to consider is, how many of the current buyers are collectors or will become collectors? How many are investors and speculators looking for a short-term safe haven while equities continue to tank? What will happen if these buyers decide to re-sell once the stock market begins to rebound?

Precious metal coins are selling at a premium above their intrinsic value spot price regardless of the collectability of these coins. Truly rare coins are selling for surprisingly strong prices at auctions despite the decline in discretionary money and the consideration that all lot viewing and bidding must be done online. The times are changing for collectors just as much as they are for the general public.

Duplicate post because the software saved it as I was typing and I can't change it. 

We discussed the physical premiums in the other topic I started.  This a temporary situation which has happened before.  My last recollection was around 2013 when silver initially fell (from the 2011 peak) below $20.  It may last longer this time but ultimately, I am sticking with the same prediction I made before.  "Metal bugs" will be forced to sell their bullion in large numbers and quantity if this condition persists.  If it doesn't, the premiums will disappear anyway.

As for the collectible market, there is no reason to believe that people who are disproportionately becoming poorer and who have no prior interest in collecting are going to bid up the price level, whether for "investment" eligible coins or otherwise.  In prior posts, I have refuted the claim that coins are a "safe haven" asset.  Any such inference is ridiculous, whether for South African coinage or otherwise.

One contributor on the PCGS and NGC forum with whom I have many debates also attempted to draw an analogy here with the 1930's during the Great Depression.  There is no such analogy.  Back then, collecting became a "mass market" predominantly at FV using coin boards (now albums).  That won't repeat either, as there are far more recreational alternatives which the public finds a lot more interesting with many being free.

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Pierre_Henri
18 hours ago, jwither said:

One contributor on the PCGS and NGC forum with whom I have many debates also attempted to draw an analogy here with the 1930's during the Great Depression.  There is no such analogy.  Back then, collecting became a "mass market" predominantly at FV using coin boards (now albums).  That won't repeat either, as there are far more recreational alternatives which the public finds a lot more interesting with many being free.

I agree with you, but on another note...

I first saw a coin album in the early 1970 when a neighbor's son showed me one that his father bought on an overseas trip.

I was flabbergasted. My coins until then were stored all over, I did not actually know how to take care of them. 

I did not know that coin albums were then available in SA (or anywhere else for that matter).

The next Saturday, my father had to drive all the way to City Coins in Cape Town to buy me one.

But those PVC albums probably destroyed more coin collections than anything else on this planet - I don't even want to recall the many verdigris-infected collections I have seen with so many rarities destroyed.

Today companies like NGC can "clean" the coins, but how many people in the past, have inherited old collections turned green and then tried to clean the coins by the methods they thought was appropriate? Dipping, polishing, washing, rubbing etc.

 Coin albums are for short term storage. The modern PVC-free coin-pages are rubbish also - they crack at the slightest touch. 

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Little Miss Muffet

It seems every time the rand devalues the gold price goes up.

I have always said the best investment is gold coins,jewellery,silver on hand is a better investment than 

our money in the bank or shares.

Gold was over 1700 the other day when I checked and that is why there is such a demand for it.

We are in for a very difficult time and people want solid stock on hand

 

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jwither

Coin albums have "evolved" over time here.  Growing up, the ones available at the time were cardboard with a slot for each coin.  Three pages in the album which folded like a book.  At the time, Whitman publishing was the only manufacturer to my knowledge.  The coin was pushed into the slot and removed by pushing on the back.  The coin would have acquired wear over time through repeated insertion and removal.  It also would have toned from chemical interaction with the cardboard in the album or air from the outside, depending upon climate.  However, no PVC damage.

The ones I am describing are ok for long term storage, depending upon the climate.  But I still wouldn't use it for any particularly valuable coin today or one where I wanted to remain as it looked when I bought it.

For my best high quality coins, I have Intercept Shield holders which fit over the NGC or PCGS holder.  However, one of my coins has developed dark spots, presumably from something inside the NGC holder.  I need to get it removed but it's probably too late to save it from a "details" grade now.

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Pierre_Henri
On 4/25/2020 at 7:49 PM, jwither said:

Coin albums have "evolved" over time here.  Growing up, the ones available at the time were cardboard with a slot for each coin.  Three pages in the album which folded like a book.  At the time, Whitman publishing was the only manufacturer to my knowledge.  The coin was pushed into the slot and removed by pushing on the back.  The coin would have acquired wear over time through repeated insertion and removal.  It also would have toned from chemical interaction with the cardboard in the album or air from the outside, depending upon climate.  However, no PVC damage.

The ones I am describing are ok for long term storage, depending upon the climate.  But I still wouldn't use it for any particularly valuable coin today or one where I wanted to remain as it looked when I bought it.

For my best high quality coins, I have Intercept Shield holders which fit over the NGC or PCGS holder.  However, one of my coins has developed dark spots, presumably from something inside the NGC holder.  I need to get it removed but it's probably too late to save it from a "details" grade now.

I am trying to send you a private message but cannot. Can you please send me one?

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