The Official Saint-Gaudens Double Eagle Thread

Figured we could use one of these, as I hope it is active years into the future as I (hopefully) add some to my collection.

Current thoughts:

• Sellers are being unrealistic. I have never seen so many coins get no activity/bids on Ebay because the prices are too high. In the past, I saw prices high by $200-$300. Now it's often $500 - $750.
• Premiums have rebounded in recent months, but mostly because the price of gold has fallen faster than Saint pricing.
• Premiums for MS-65 commons are on the order of about 50% on average the last few quarters. This is WAY DOWN from the historic premiums a decade ago (see charts) and earlier when they were often 150-300%. Even that was down from the Bubble Peaks of 500-1,000% premiums.

I love the look of the Saint-Gaudens coin. Definitely one of our most beautiful coins, if not THE most beautiful.

 

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I am watching as well. I always get a little jealous when I see 2002-2004 auction prices on Saints. The common MS63 and 64's were selling for $400-500 each. I have been paying that for $2.5 MS64 Liberty's. To think I could be getting almost an oz of gold for the same price, that is amazing. The dollar keeps moving higher. Some feel it could go a lot more. If gold gets back to $800-900 I will add several to the ones I already have. I will also try to pick up more Indians as those should come down as well.

 

WLH, if gold falls back to the 2008 level of about $800/oz., you may be able to pick up MS-65 commons for $1,200....certainly well-under $1,500.

 

Note: The sensitivity of the charts are not the same. The top chart that shows generic falls by 31% from the peak to current level. The Mint State chart falls only 5% in the same time frame. It looks much more dramatic of a fall, but it is not.

 

Well, it doesn't take rocket science to show that Gold prices in terms of bullion value are dropping from the extremely inflated prices of the past 2-3 years. That is obvious. However, dealers and collectors don't necessarily function as large bullion distributors--if one purchased 'High," the incentive to sell "Low" is not necessarily there. Unless someone is desperate, liquidating Gold would be a foolish move, given the uncertainty of the price. The stock market is reflecting the increased American currency dollar value by pulling back. Gold is doing the same thing, so don't expect bargain prices quite yet. That may take years for actual realized prices on coins such as the Saints to be reflective. I have noticed in general that dealers on Ebay are being tighter with prices than previously--the coin market is not as fluid as it has been before, and both buyers and sellers are far more conservative. Just one person's opinion.

 

The use of truncated graphs is only warranted under certain conditions. PCGS use of them in the graphs shown above is designed to show volatility that doesn't really exist, thereby making them intellectually dishonest. If you want people to understand the bigger picture, the y-axis values need to start at zero. All four of those graphs are absolutely meaningless IMO.

 

I do understand that, but the graphs you posted make a bunny hill look like a double black diamond. For the record, I didn't see the original graphs from the AGE, but they are equally as intellectually dishonest.

 

I think the data points referenced are OK. IOTW, the charts are legit and accurately portray what pricing was. Maybe not EXACTLY, but gives you a decent time-series perspective.

The premiums are pretty close to what I recall Saints trading for at that time.

 

That's what I haven't been able to understand since I don't run my own business (yet) and certainly not a coin shop.

If a coin dealer/LCS is continually buying coins (inventory) then he can sell as prices move lower. But if he buys most/all high -- if he bets on rising prices -- then he is screwed because what can he sell, right ? If you go out and buy coins and bullion when gold is at $1,600/oz. and then gold is $1,200/oz. and numismatics are equally lower, then what do you do ?

MSD, are you saying that prices are sticky on the downside ? I would agree...that's basic human resistance to lower prices or forces that accompany lower prices.

With bullion going lower, if it stays low, eventually premiums on Saints (and other coins that trade largely off gold) will fall. Obviously, coins not tied to gold like nickles/dimes/etc. will trade on their own supply/demand.

 

But I wasn't making that case, I just used it to show that HISTORICALLY premiums have finally dissipated after 20+ years.

Saints can see their premiums narrow further -- even if gold prices fall -- or the premiums can be stable and even rise even if the ABSOLUTE PRICE of both gold and Saints takes a hit. This would happen if gold took a tumble down below $1,000 very quickly.

Agreed....but my focus was that the PREMIUM RISK of buying Saints is now lower (or was lower) than it has been in a LONG TIME (decades). That doesn't mean you can't lose on Saints going to $1,200 (MS-65 commons) if gold falls to $800.

It does mean that the days of gold going UP and Saints going DOWN are much less likely. Premiums kill you because investors/coin collectors were told that you have more leverage if the underlying bullion went up -- and that was not true.

It's even worse for the SS Central America coins, where the premiums were often 500 - 1,000%. The price of gold went up 6-fold in a decade, yet for most of the stuff sold it was flat at best, up marginally maybe.

 

Basically, common date Gold coins are bullion--generic MS coins do not command any significant premiums except for a few select dates in the Saint series. So, theoretically, they should fluctuate just as does the price of bullion. However, that isn't the case here--dealers obviously bought higher than they wanted to, and unless they get desperate, don't expect to see price reductions, as it is a loss of real dollars, and not unrealized appreciation or depreciation. Remember, when prices of precious metals drop, one only loses money if they sell, not if they hold. That is what is happening.

 

Right, so the business plan for low-60's Saint commons is no different than bullion. My LCS charges spot + 6% for AGEs, Buffalos, Maple Lafs, etc. If he bought higher, I guess he buys more lower and makes a thin margin on coins all the way down to make things even.

With Saints, obviously, you could be tying up $$$ for alot lower. If an MS-65 was bought when gold was alot higher and/or premiums much higher, you could be under water a ton. I don't know what a dealer does in that situation.

Maybe we have some dealers or active traders who can tell us.

 

What I'd expect to happen in a situation like this roughly the following:

• Anybody who bought way too many Saints at their peak is either out of business or is essentially forced to sell to stay solvent. Those coins are out there, which pushes premiums down in the short term.
• Gradually, over time, everybody else sees numismatic premiums decreasing and starts wanting to sell. When these guys finally punt, premiums drop even further.

The only thing that can realistically increase collector premiums on generic gold coins (Saints especially because they're so large and relatively common among gold coins) is a huge amount of collector interest. But, you're never going to get that with a coin that costs $1000+ and has multiple key coins in the $20K+ range in MS60. I'd probably exhaust my entire lifetime coin budget on 1929-1931!

I think this, in short, is what we're seeing.

On top of this, I suspect the American Gold Eagle exerts downward pressure on, and creates an upper bound for the numismatic premium of MS grade, common-date Saints. After all, if all you want the coin for is the gold, why not get the newer version that trades at small premium to spot and has the same obverse design?

So, in summary, collector interest in Saints as a series is depressed by their high prices. Market forces should push premiums down over time simply due to people liquidating. And, AGEs should further reduce demand on Saints by giving bullion investors a better place to get gold bullion.

 

Paul, great comments...logical and probably close to the mark.

 

Dealers make money from transactions, not capital appreciation. They simply sell their inventory at a loss, replace it at the new lower price, and continue to transact at lower dollar prices but making profit again. If the dealer were to try and hold out and not create transactions, they cease to be a dealer and have transformed into an investor whether or not they realize or intended to.

 

In response to what you described, Paul, as the downward pressure on premiums... If I offered an MS Saint and an AGE at the exact same price and you were to buy one, which would you pick? BOOM! That's upward pressure on premiums.

 

As an avid collector of the St. Gaudens, Indian Eagle and Incuse Indian Half Eagle, reading some of the hypothesis/hypotheses in this thread, decided to investigate relative pricing and conditioning of MS65 St. Gaudens from 2 decades past.

To be objective I researched the bullion price, premiums paid for a TPG slabbed St. Gaudens coin in MS65 condition, and the relative conditioning of graded coins. Gold "spot" was ~1/3 of current pricing.

I found generally the best premiums paid for the MS65 GEM condition coin was ~200% for Generic dates (e.g. 1924, 1925, 1927, 1928), versus ~70% today.

To be fair, as a past collector of sight seen (i.e. not the slab) ACG St. Gauden coins, I'd select a Generic specimen MS65. It didn't have "bag rub" or "flattened nose", no rim "nicks", lustrous cartwheel clear fields with minimal ray and devices "bag marks". I then viewed current internet MS65 St. Gaudens offerings, including eBay #351341479158.

I decided that the "pricing" of today is a good relative value which I wouldn't expect to increase with diminished bullion pricing. However, you may be getting "what you paid for".

I believe that an average collector who had advanced to buying GEM condition coins, probably had lesser value coins to sell in the event of need, and probably like myself would only sell the higher grades, after vehicles, toys, and others of seemingly lesser value?

JMHO