AGE Gold Commentary is our regular report analyzing trends in precious metals and rare coins. We monitor domestic and international markets and extrapolate from our 30 years in metals to place current events into a hard asset perspective. View archives.
8/3/2003: ANA show report: Bull market raging in rare coins
A special message to our loyal customers from Dana Samuelson, Owner of AGE.
In this issue:
Fresh inventory of superb U.S. gold coins from the ANA Show
Bull market in rare coins confirmed by David Hall, founder of PCGS
The four phases of a bull market in rare coins
I've just returned from the largest coin show of the year, the annual summer American Numismatic Association Show in Baltimore.
Dealers across the board reported that they did record business at this show, with some doing double or triple their normal volume for a major show. Far and away, this was the best coin show in years, and it confirmed the trend we identified and have been reporting to you since last year's ANA in New York.
Demand for classic U.S. gold coins has been ramping up for the last 12 months and is now as strong as we've seen in many years. The cat is out of the bag! It's obvious now, even to the casual market participant, that demand for classic U.S. gold coins is overwhelming available supplies (more on that below).
Scouring the bourse floor, I hand-picked classic coins that, in my opinion, are some of the best values in the U.S. gold coin market today. Because you've been a loyal customer of AGE in the past, I'm alerting you to these excellent new coins before we announce them on our website in order to give you first shot. These are great coins in a hot market and they'll certainly go quickly.
View our U.S. gold coins inventory, newly updated from the ANA Show.
All of these coins have been hand-selected for outstanding value and investment potential based on their market scarcity, current trading level, technical merit, and overall eye appeal.
Frankly, I was quite surprised to find so many choice, investment-worthy U.S. gold coins. My expectations entering the show were low, due to the severely strained supplies we've seen over the last six to twelve months. This year's run-up in the gold price, along with the continued decline in overall fiscal health of the U.S., have helped to create the strongest demand for classic U.S. gold coins we've seen in years, and also one of the best climates for substantial gains in rare coins. Coin prices are now poised to move substantially higher. But don't just take my word for itů
Rare coin bull market confirmed by David Hall, founder of PCGS
As we prepared our new coin list yesterday, I was reviewing the mail that had accumulated in my box while I was gone. Included was a report on the rare coin market from David Hall, founder of the Professional Coin Grading Service (PCGS), with whom I happened to share a cab from the airport to the show. Mr. Hall is one of the most respected figures in our industry and his experience and achievements are legendary.
Mr. Hall's report is on what he calls The Four Phases of a Bull Market in Rare Coins, along with his personal observations on the major coin bull markets since the 1960s. Coincidentally, his report is similar to one I authored in 1998, when stocks were on a rampage, gold was on its way to a 20-year low, and classic U.S. gold coins were being ignored by almost everyone.
The Four Phases of a Bull Market in Rare Coins
According to Mr. Hall (and I concur), there are four major phases to a rare coin bull market:
Phase 1 —
Buyers begin to deplete the available supplies that dealers hold in inventory. This is the quietest stage and often the most difficult to properly identify. To dealers it seems like business as usual, only perhaps a bit stronger than normal, and there are plenty of coins to choose from on the national market.
Phase 2 —
Buying begins to overwhelm available supplies and prices begin to move higher in earnest. Dealers are forced to compete aggressively with one another to acquire quality coins for customers and for inventory. During this phase finding quality coins becomes the most difficult. We've been reporting for a year now that this straining of supplies was likely to happen, and the huge activity we saw at the Baltimore coin show confirms the trend.
Mr. Hall states emphatically, and I agree, that Phase 2 has begun!
Phase 3 —
Substantially higher prices slowly begin to increase the supply of coins available to dealers. Coin owners find higher prices and profits hard to ignore and begin to cash out. But demand continues to overwhelm supply as more collectors chase after a rising market, finding the now-easy gains hard to resist.
Phase 4 —
Prices reach cyclical peaks, coin supplies increase dramatically. As sellers finally outnumber buyers, the cycle breaks. Prices begin to fall due to a surplus of coins and a decrease in buyers.
Without a doubt, now is the time to invest in classic U.S. gold coins, while we're still in the beginning of Phase 2. Once we enter Phase 3, prices will have increased substantially, reducing (but not eliminating) your potential profits.
Once again, please review our U.S. gold coins inventory list, updated from last week's ANA Show.
To confirm any purchases, please call Matt Warden at 1-800-613-9323. If you see something you like but need a little time to make a firm decision, were happy to hold any coins for 24 to 48 hours.
As always, thanks for your time and your business!
American Gold Exchange
AGE Gold Commentary
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