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Year of the Dog

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CMC Market Question
« on: December 06, 2012, 11:31:21 AM »
Several months ago Konajim Posted that he felt the top of the market was the December 2010 Hong Kong Auctions.  He also stated that with the exception of certain discoveries and spikes that the market had been on a slow decline.   

I haven't been in a position to pay much attention for several months now.  However as the winter auctions approach I am anxious to watch and compare this years auction results to the last couple of years. 

So my questions to the senior/seasoned members of the forum is this;  What direction is the market headed in right now?  Did 2012 show profits or losses for the average collector of BU gold or silver pandas?  What thoughts do you have for 2013?   

Thanks for your time.  I really hope that Pandahalves, Obsidian, Snowball, Birdman and other highly respected members chime in.....

Joe

Offline Birdman

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Re: CMC Market Question
« Reply #1 on: December 06, 2012, 05:01:17 PM »
Several months ago Konajim Posted that he felt the top of the market was the December 2010 Hong Kong Auctions.  He also stated that with the exception of certain discoveries and spikes that the market had been on a slow decline.   

I haven't been in a position to pay much attention for several months now.  However as the winter auctions approach I am anxious to watch and compare this years auction results to the last couple of years. 

So my questions to the senior/seasoned members of the forum is this;  What direction is the market headed in right now?  Did 2012 show profits or losses for the average collector of BU gold or silver pandas?  What thoughts do you have for 2013?   

Thanks for your time.  I really hope that Pandahalves, Obsidian, Snowball, Birdman and other highly respected members chime in.....

Joe


Hi Joe,

Since you ask me for my thoughts on the market, I will offer the following, for what it is worth…

I won’t attempt to generalize across the entire modern China coin market.  First of all, I lack the breadth of knowledge (I will defer to a number of more experienced and knowledgeable folks on this forum).  Second, I think it is safe to say that there are sectors of the market that differ both in their performance over the past year and in their potential for future returns.  The market is too diverse to generalize.  Although four or five years ago it may have been possible for any person to make lots of money buying and selling any Chinese coin, those times have changed.  One needs to be more selective.
 
Personally, I have gravitated to gold pandas.  When I got started in Chinese coins several years ago, too many of the better silver dates were selling for many times their underlying silver value.  In contrast, many better date gold pandas could be purchased for a much smaller percentage premium above their bullion value.  Since part of me is interested in holding precious metals as a hedge against inflation, collecting gold pandas allowed me to acquire more precious metal and spend less on numismatic premium.  Moreover, the silver pandas had much larger mintages than some of the gold pandas, making the gold pandas more desirable in terms of scarcity.  Finally, the silver has the occasional habit of developing white spots of death.  I guess I was scared to invest $1500 in a coin, only to have it develop a nasty spot that destroyed its numismatic value. For these various reasons, I ended up focusing mainly on gold ½ oz and 1 oz pandas (The smaller gold denominations sell for a greater premium over spot price and their details are more difficult for me to appreciate without magnification). 

With that context stated, over the past year I have been a steady buyer of certain better date gold ½ ounce pandas.  Although I did pay a premium for one rare date MS69 G1/2 panda, almost all of my recent purchases have been for $950-1350.  I don’t buy the common bullion dates (I may start buying some, however, if we get a sharp decline in the price of gold).  Thus, I am opportunistically buying relatively low mintage coins.  By opportunistically, I mean that I try to buy overlooked varieties or rare coins that are offered in shops for a too-small premium above bullion.   I still need a 1999 G1/2, but the market price has run up so much over the past year or so that I’m not comfortable chasing it.  I’ll wait until I find one underpriced, or I’ll do without.  I am also uncomfortable paying the current market price of the G1/2 1982, 1998 and a few other dates.  Call me a minor league player, perhaps.

I see two investment advantages of buying gold ½ oz pandas in the manner described above.  I personally think the price of gold will be higher in the future, owing to excessive money printing and unmanageable debt accumulation by various countries.  I also think that the relative scarcity of the gold ½ oz panda will lead to an increase in its numismatic premium.  From what I see, more people are putting together complete sets of gold pandas (1/20 to 1 oz) for a given date than they were several years ago.  I’ve heard others describe the “river of gold panda coins” flowing from the US to China.  As these date sets continue to be assembled, I think there will be a supply squeeze for the rarest portion of the set (the ½ oz and in some cases the ¼ oz).   

My investment horizon is 5-10 years (unless there is a dramatic increase in prices that motivates me to sell things earlier).  I am patiently and selectively acquiring pieces that I think have upside potential.  I’m not the ultra-bullish type who says aggressively pay 15+% above market value to get a coin. I suppose I’m more conservative in the current market.

I don’t have the large bank account, or the nerves of steel, required to invest in the high priced rarities.  You’d have to talk to a different person to get a sense for that market.  I’m sure there are some underappreciated $10,000 China coins out there that will increase dramatically over the 5 to 10 years.  I’m not smart enough, rich enough, or brave enough to play that end of the market.

Overall, if someone is just looking to flip coins short term for a profit, I’m not sure buying coins at major auctions is the best strategy.  I think there are too many experienced eyes looking for the unusual varieties and better dates at those venues.  You probably won’t walk away with a short term bargain at Heritage, Stacks, or Champion.  Better to acquire knowledge in a sector of the China coin market that interests you and then search for coins in other places off the beaten path.  Having said that, it is getting harder and harder to find overlooked bargains…

Birdman

Offline Mirkkanen

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Re: CMC Market Question
« Reply #2 on: December 06, 2012, 05:07:46 PM »
Although I'm not as seasoned as those whom you've mentioned, maybe my input will be valuable nonetheless . . .

It is very hard to quantify the "market" as being one entity which is moving upward or downward in price. Instead of thinking in these terms, it is helpful to me to break up the 'market" into component parts and analyze which parts are currently making gains and which parts are currently stagnant, or continuing to shed value.
 
One of your questions was whether the average collector made profits or losses. We must remember that profit is not made until an owner sells. I have not sold any pandas, so I've made no profits :) In 2012, however, my collection of bu 1/10th oz gold pandas did very well, increasing in value (at least in my mind).

I am noticing 70-grade coins not selling for as high as they once did, or at least it seems that way. I am not a collector of that grade, so I cannot be sure. It DOES appear though that OMP coins continue to increase in price relative to their already-graded counterparts. I pointed this out months ago in a thread about why people are buying graded coins, when OMP coins are out performing.

I have seen some high-value silver coins continue to come down in price over the past several months, such as 1999 serif 1 pandas and the mirrored panda from 2000. If you talk to any 2012 panda expo medal holders, they're likely to be frustrated as well.

As for the question of "What direction is the market headed in right now?" the best answer might be consolidating in a range, before either making another push higher (with an increase in the price of bullion?) or another push lower (with a deflationary scenario/market crash?).  

"What thoughts do you have for 2013?" My hope is that the market will stay slow so that I can acquire more coins for reasonable prices. I would assume this will be the case unless some major precipitating event comes along to jolt the market.
« Last Edit: December 06, 2012, 05:10:24 PM by Mirkkanen »

Offline Honus

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Re: CMC Market Question
« Reply #3 on: December 06, 2012, 08:04:15 PM »
Birdman, it's amazing how similar our strategies are - your strategy reads almost exactly as I'd describe mine, right down to bailing on silver because of WSOD.  I don't focus specifically on 1/2oz, I'll buy anything MCC gold that's priced right.  But otherwise your strategy is my strategy exactly.
Eric Liquori
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Offline Batman

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Re: CMC Market Question
« Reply #4 on: December 06, 2012, 08:04:59 PM »
Here is my take:

The long-term fundamentals remain strong:
1)   Large and ever increasing collector base in China (high profile coins shows, etc.)
2)   Collector base in US seems to be expanding
3)   Low mintages for many many pre-2003 MCC
4)   Availability of coins is getting difficult to locate

In the short-term, I expect 2013 to play out similar to 2012.
  
2012:

On ebay, 2012 started off with pretty strong sales thru the first half of the year along with a general high level of activity.  Also, sales of coins priced below $3,000 did generally well, but expensive coins did not sell.  There seems to be a stalemate between what sellers are willing to sell for and buyers are willing to pay.

The second half of 2012 saw things slow down dramatically.  That being said, there were a number of interesting events in 2012 that saw individual coin prices push higher (e.g. 1994 ½ gold large date, 2002 1/10 gold, 1987 silver rabbit 69 grade, etc.).  I personally think the US market for MCC is solely tied to the psychology of gold prices moving higher.    The higher the price of gold, buyers of MCC feel more confident in purchasing coins. As gold prices stagnate or move lower sales of types of coins seem to pause.

In China, on Zhaooline ( I check Zhao sales every morning),  I have noticed that OMP coins received the lowest prices , in fact, in some cases 50% lower than 69 grades.  This is the same for 68 grade coins.  70 grade coins demand huge premiums.  While it appeared that prices were slowly declining during 2012, over the past 60 days I have seen the reverse.  Pricing seems to have stabilized and I have seen price increases for 69 and 70 grade coins, but coins in OMP continue to falter.  Additionally, while prices of coins were higher in China than the US in 2010 and first half of 2011, I believe that prices are currently  lower in China than the US, not only for 69 grade coins but also OMP.

Overall certain expensive coins, priced $3,000 and higher prior to June 2011 have seen price declines of 50% or more. Some of these coins have found their footing while others have not.  

Online Internet auction sales in Hong Kong  at the major auction houses have faltered.  Many coins opening bids were too high and did not sell.  Coins that started off with low bids did sell, but nowhere near the level of 2010/2011.

For 2013, I think it will look much like 2012, with a couple of exceptions.  I am curious as to the impact that Peter’s book will have on the market, including new discoveries and up to date population estimates.  I also expect the continued identification of new varieties to have an effect on certain coins.  70 grade coins should continue to be popular and command high premiums.  It’s no secret that NGC has been very stingy in handing out 69 grades let alone 70 grades.  I expect coins priced $5,000 and higher to have a very limited market, and sales could be difficult unless priced right.  

I personally don’t think, and I am sure most will agree, that we will see the kind of appreciation we saw from 2010-2011 repeated for many many years.  I think many speculators have left the MCC scene, and it is a collectors market…albeit a more expensive one as the base price of many coins are up 400% -500% + of their pre-2010 pricing.

That being said, I continue to collect and buy specific coins where I see opportunity. I add to my collection when I can (I only collect coins with mintages below 2500), and purchase certain coins for investment.  At one time I used to solely buy OMP coins and have them graded.  Now, due to the poor quality of OMP, and the lower prices on graded coins, I only buy 69 grade coins.  I no longer waste my time trying to buy OMP and hope for the 69 grade.  It is not worth the risk anymore.

The low end of the market is extremely appealing as it is affordable.  As more US collectors enter the MCC market, they do so at the low end, soaking up the availability of affordable pandas.  Silver pandas, prior to 2004 are extremely appealing and can offer decent returns beyond any other investment available.

Year of the Dog

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Re: CMC Market Question
« Reply #5 on: December 06, 2012, 08:23:40 PM »
I like what you said Batman about the market being a "Collectors Market".  I agree but hadn't really given that any thought until just now.

If it is a collectors market than it is for the first time since I started buying CMCs.  Unfortunately for the near term if true that would also mean that investors and speculators should be bailing on high quantities and high quality CMCs. As they do we should expect or at least anticipate a slow year and lower prices on certain items.     Here is my guess.   Speculators and investors purchased key dates, 1982, 1995-2000 gold pandas and 1983-1985, 1995 micros, 1999 serifs, 2000 mirrors.   These were all known rarities prior to the 2010 push.   I believe that 2013 should be a strong buyers market for these coins.   However the later discovered rarities that have been mentioned in earlier posts may hold their head a bit.   I also think that Proof Pandas in both gold and silver were over purchased and collectors will get an opportunity to pry them from the hands of investors.   I guess to summarize my thoughts if the market is now a collectors market than it should become a strong buyers market.  If PMs drop I think this is almost a certainty. 

Offline KeyDate1/2ozPandas

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Re: CMC Market Question
« Reply #6 on: December 06, 2012, 09:31:42 PM »
As a dealer it is a conflict of interest to speculate on the future, but I can comment on the past year. I don’t pay much attention to the market as a whole, but divide it into segments and track accordingly.  Since 85% percent of my business is gold panda, that market I divide into many segments, while the other I tend to lump together.

Gold pandas:
HOT: Complete yearly sets in all grades and OMP with 82, 83, 89-93, 94-97, 99, 01-06 best performing.  High net worth collectors wanted complete series set from 1982-2012 in OMP, MS69 or aftermarket presentation box, this demand was the primary reason for strong out performance for gold pandas in 2012. Further, since the investors of these sets didn't really care about which variety was included in their 30 year set, the cheapest variety of a given year out performed the rarer variety dramatically.
HOT: 1/10oz series in all grades and OMP with 82, 83, 95, 98, 99, 02, 04, 06, 08 best performing.  Demand was to make 30 year series sets and 00-12 sets.
HOT: 1/20 series in all grades and OMP with 83, 84-85, 89-97, 98, 99, 00, 01-06 best performing.  Demand was to make 30 year series sets and 00-12 sets.
HOT: 1/4oz key dates in all grades and OMP with 89 LD, 90 SD, 93 SD, 95 SD/LD, 96 LD, 99 LD/SD, 00, 02, 06 best performing.  Demand for these pieces were to complete yearly sets with no complete series demand. 
Neutral: 1/2oz, demand for these pieces were to complete yearly sets with no complete series demand.
Neutral: 1oz, demand for these pieces were to complete yearly sets with no complete series demand.  In the past 1oz series was very popular when the price point was lower.
Neutral: MS70 demand for these spiked during the first half of the year, then during the summer a lot of new supply came on and prices stabilized and going into year-end prices retraced a bit, overall flat for the year.
Neutral: 89-94 proof sets, demand flat throughout the year, investor and collectors finding these rare sets available for the first time since 2010. 
Neutral: 05-12 5oz panda, steady demand, flat premiums.
COLD: 95-96 1oz gold proofs, 98 LD, 99 serif, 00 mirror numismatic premiums fell throughout the year, this market peaked in August of 2011, when gold peaked at $1900
COLD: 86-88 proof sets, 86-88 5oz and 12oz gold, spreads to melt contracted throughout the year.  No demand to create series sets, these sets were traded as bullion.
COLD: 90-95 5oz, 12oz, 00-12 kilo numismatic premiums fell throughout the year. This market peaked in December 2010 with double top in April 2011.

Silver Panda:
COLD: 1oz, 5oz, 12oz, kilo numismatic premiums fell throughout the year, very limited demand across the board.  This market peaked in April 2011 when silver hit $50.

Gold Lunars:
COLD: 8g, 1oz, 5oz, 12oz, kilo numismatic premiums fell throughout the year, very limited demand across the board.  This market peaked in August 2011, when gold peaked at $1900.  The market has stabilized on prices, but transaction volume is very low.

Silver Lunars:
COLD: 15g, 1oz, 5oz, 12oz, kilo numismatic premiums fell throughout the year, very limited demand across the board.  This market peaked in July 2011 before Aug/Sept auctions added tremendous supply to the market in a short period of time.  The market has stabilized on prices, but transaction volume is very low.

Gold and Silver Cultural:
COLD: 1/2oz, 1oz, 5oz, 12oz, kilo numismatic premiums fell throughout the year, very limited demand across the board.  This market peaked in December 2010 with a double top in April-August 2011. The market has stabilized on prices, but transaction volume is very low.

Gold and Silver Unicorns:
COLD: 1/2oz, 1oz, 5oz, 12oz, 20oz, kilo numismatic premiums fell throughout the year, very limited demand across the board.  This market peaked in December 2010 with a double top in April-August 2011. Prices are still looking for a bottom. 

Other related markets:
HOT: Sales to China from US and German dealers at record levels, mainland dealers and collectors are buying up almost 90%+ of the US supply of gold pandas. 
HOT: Silver, up 20% YTD
Neutral: China residential property, down 2% YTD
Neutral: Gold, up 10% YTD
Neutral: Shanghai Index, down 10% YTD
COLD: Imperial coins and Chinese paper money numismatic premiums fell throughout the year, very limited demand across the board.
COLD: 2012 sales to public at coin show.  2012 has been one of the worst years for sales at coins shows for modern Chinese coins to the public, 2011 was the peak, 2010 was  healthy, 2009 was slow comparable to 2012 and 2008 was healthy.  The US coin collector is simply not going to coins shows to buy, they are doing their limited buying over the internet.

In summary, 2012 was the year of the gold panda 1.9oz yearly sets and 1/10oz gold panda series sets on the upside and all other coins flat to down.  Common varieties out performed rare varieties in a given year for gold pandas and expensive $10K+ coins with high numismatic premiums were down 30%-50%.  Finally, most encouraging trend of 2012 is almost all gold panda coins entering the market went straight to China with little attempt by dealers to even try to sell in the US, except MS70s and some MS69 coins.   

Arif

Offline Birdman

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Re: CMC Market Question
« Reply #7 on: December 06, 2012, 09:47:30 PM »
Interesting insights from a dealer's perspective.  Thanks for sharing, Arif.

Offline Honus

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Re: CMC Market Question
« Reply #8 on: December 06, 2012, 10:14:04 PM »
That is a great post, thanks Arif, fantastic insight from someone on the front line.   That info is a keeper.
Eric Liquori
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Offline Obsidian

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Re: CMC Market Question
« Reply #9 on: December 07, 2012, 01:03:14 AM »
Great information by all of you!  Thank you.  Now I don't have to pretend I know something!

I would agree with the majority of what has been posted.  I still like the overall fundamentals.  What we have seen since late 2011 is gold trading in a very tight range from 1600-1800.  Similar for silver.  This is not helping gold or silver coins.  We can think that coins with large numismatic premiums shouldn't be affected by small movements in precious metals.  To some degree this is true.  However, large movements in the precious metals peaks peoples interest in them and little to no movement makes people lose interest.  The more people that are trading in precious metals the more people end up stumbling onto Chinese Modern Coins.  A certain percentage of these end up collecting the rarer coins, etc.  So this trend of no movement in precious metals is short term bearish for CCM.

However the fundamentals that have created this 10 year uptrend in gold and silver remain.  Very little has changed to correct many of the countries of the worlds problems.  

We also have China's economy slowing down to some degree.  However, it is still growing rapidly compared to every developed country in the world.  Of course, that is why the longer term trend is still very good.

So bottom line.  Short term trend seems to be flat but the long term trend is likely quite positive.

I would also like to point out something interesting.  Batman called the current market a "collectors market".  This could be viewed as a negative.  Year of the Dog mentioned this and alluded to it equating to softer prices.  This could be case.  However, I think it is GREAT if it is a "collectors market".  Anyone that has bought and wants to hold these coins wants to hear that.  In my opinion even dealers and investors should want to hear that.  The only people this is bad for are the speculators and flippers.  A market that is full of speculators and flippers is a very dangerous market in my mind.  I have worried since I entered this market that there were too many investors, speculators, and flippers.  I personally want to see more actual collectors.  So a "collectors market" is a good trend in my opinion.  Good dealers also like to see good fundamentals if they want to make money in this market for years to come.  That is why I don't think the strong investors, dealers, or collectors will just dump their rare coins because of a short term soft market.  Most of them see a more positive medium to long term trend.

I also found interesting the information provided by Batman about Zhao online auctions bringing such high premiums for 69s and 70s.  This is a trend that appears to be going on in China that I wasn't completely aware of.  Since the majority of people that would be bidding at Zhao would be Chinese.

Thank you everyone for your great input!  Keep it coming.

 
« Last Edit: December 07, 2012, 01:13:12 AM by Obsidian »

Offline KeyDate1/2ozPandas

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Re: CMC Market Question
« Reply #10 on: December 07, 2012, 02:29:17 AM »
Since early 2012 the speculators, brokers, promoters and flippers are essentially gone from the US market both on the national show circuit and on ebay.  There simply isn't any easy money to be made buying and selling coins for several reasons:

1) NGC and PCGS price guides have educated many sellers to avoid underselling their coins.
2) The market for coins and metals has been uncertain throughout the year, some going down, some up, some flat, an environment that speculators don't really get excited about.
3) Many speculators got crushed on cultural and unicorn coins in late 2011 and early 2012, by January of 2012 many gave up on the market. 

In late 2007 was the first time speculators entered the market in masses, myself included.  We jumped in for different reasons; I was trying buy an asset that was priced in RMB without actually owing RMB currency.  In addition in early 2007 when they released the 25th anniversary sets they included a book that had all the true mintages of each of the gold panda coins from 1982-2000, these mintage were well below the published mintages found in Krause and other books, so an opportunity to buy rare 1998 coins at small premiums to melt became available for short window of time from early 2007 through early 2008, yes it took almost 12 months for US dealers to realize new information was available to the market. Finally, in the summer of 2008 Beijing was going to host the summer games, an event that would surely put Chinese collectibles in the spotlight.  For all these bullish reasons, I sold every US coin I owned that I had slowly stockpiled over 20 years and went all in on gold pandas by late 2007. 

During summer of 2008, just prior to the Olympics the market cooled down and speculators started to bail out, prices dropped about 10-25% during the summer and continued to slide through October of 2008.  All the speculators and even some hardened collectors were out by September-October of 2008, but by then I was a true believer and investor in these coins with goal of buying more rather than getting out and finding another market to invest in. Then in November of 2008 a gift appeared from Microsoft and paypal, Microsoft started to offer 15%-30% Bing cash back on ebay purchases ($200 max per purchase, $2500/year per account) and paypal offered me 3% cash back on echeck purchases, these incentive forced a few investors and dealer types to start buying everything rare that was offered on ebay from November 2008-August 2009, but no speculators came in because there wasn't a market to sell the coin back into once you acquired them regardless of how cheap, because I or anyone else would rather buy on ebay with a 20% bing rebate than buy from a speculator or dealer without a rebate in place. In September of 2009, the market for rare cultural pieces started to turn and by early spring 2010 prices were up 100% in just 6 months and speculators piled back into the market.

The speculators bought and sold for the next 18 months until late 2011 when prices for some coins were down 20-30% and that was enough for many to get out with what profit they had left. By early 2012 it was obvious the speculators were gone, the US dealers that decided to dabble in Chinese coins were also gone and all that was left was collectors, world coin dealers and investors for the balance of 2012. 

The final insight I want to leave you with is the following, how do you know if speculators are in the market or not?  It is difficult for a collector to know. It possible for an investor to figure it out.  But it is bluntly obvious for a dealer to know, why?

1) Collectors and investors buy in rising, flat and falling markets and typically pay with a check or wire to TRUSTED sellers.
2) Speculators only enter markets that are rising and typically pay with paypal or a credit card or want 10 days to pay or 20 days to pay.  When I see this I know markets are topping out and it is time to sell more than buy.  If you find yourself buying with a credit card even though the TRUSTED seller is offering you 2%-3% discount (more than your credit card rewards) to pay with check or wire, then chances are you are a speculator at that moment in time, not a collector or investor, because you don't have the money to make the purchase today.  There are exceptions like for MS70 buyers, they must buy when a coin becomes available rather than when they can afford to buy it, so buying on credit for them is acceptable, while maintaining a non-speculator status. 
3) Once the market turns the speculators jump out almost at the same time (over a few months) and huge amount of coins get offered to dealers and on ebay, in which seller accept the price the dealer is willing to pay rather than asking for current market price.  Remember this important concept, in a bull markets sellers are scared to sell too cheap so they set the ASK price above the current price and prices continue to rise because no one wants to sell, in a bear market buyers are scared to buy at current levels so they set the BID price below the current price and wait for someone to hit it and prices continue to fall.  When speculators are getting out, dealer BID prices can be 20-35% below current market, while when the speculators want to get in dealer BID prices can be just 3%-10% below market, because dealer has the item sold before it even arrives at current market price or slightly higher.   
4) Once the market turns down, all those people buying with paypal and credit cards are no longer buying and those that are buying are paying with checks and wires, the collectors and investors are back and speculators are out. 
 
The fact that only a tiny portion of my sales this year and now are with paypal, is clear sign the speculators are not involved in the market. When they come back I will gladly sell to them everything via paypal at 50%-200% higher prices than today.

Arif

Offline Obsidian

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Re: CMC Market Question
« Reply #11 on: December 07, 2012, 03:37:48 AM »
Exactly Arif.  You put tighter timeframes to what I was suspecting was happening.  Strong dealers like you can continue to do business in this environment.  Thanks for your input.

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Re: CMC Market Question
« Reply #12 on: December 07, 2012, 07:48:33 AM »
Great post and comments.  I am new to the coin world but learning.  The inventory of precious metals world wide is getting very low w/ lots of buyers coming into the PM market.  Retirement funds, hedge funds, companies, countries, citizens are all buying gold/silver and other PM.  For every oz of silver there is 100 oz of paper silver.  Expect some producing countries to stop selling as they will use the metals for their own treasury.  I see the end of buying gold/silver/PM soon as supplies will not be available.  Big buyers could wipe out most inventory as they did in 2009 in the Pacific NW.  Seattle coin shops wanted up to $7 over spot for the priviledge of buying a oz of silver bullion.  Today expect $5 over spot for Silver Eagles and Mapleleafs.  This time supplies will not be replenished as quickly as in 2009, if at all.  The ocean of paper money is finally coming into physical precious metals.  As this happens, the fence sitters will buy MCC or CMC while they can.  Short term, our MCC market may be soft.  Long term, this market looks like high demand to me.  How do we wrestle MCC back from the Chinese?  The world knows paper money is in trouble.  (Isn't that obvious to everyone?)  Expect panic buying of gold/silver as supplies disappear.  This will have a positive effect on our small MCC market.  For me, now is the time to collect..........

Offline Birdman

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Re: CMC Market Question
« Reply #13 on: December 07, 2012, 11:16:56 AM »
"What thoughts do you have for 2013?" My hope is that the market will stay slow so that I can acquire more coins for reasonable prices.

Yes, please.  Give me time to buy more coins before prices rise.

Birdman, it's amazing how similar our strategies are - your strategy reads almost exactly as I'd describe mine, right down to bailing on silver because of WSOD.  I don't focus specifically on 1/2oz, I'll buy anything MCC gold that's priced right.  But otherwise your strategy is my strategy exactly.

Honus,
Oh, so you are the one that has been buying the best deals before I can get to them? ;)

In China, on Zhaooline ( I check Zhao sales every morning),  I have noticed that OMP coins received the lowest prices , in fact, in some cases 50% lower than 69 grades.  This is the same for 68 grade coins.  70 grade coins demand huge premiums.
 

Interesting, I have now heard from multiple sources that there is growing acceptance and interest in high graded coins in China.

COLD: 2012 sales to public at coin show.  2012 has been one of the worst years for sales at coins shows for modern Chinese coins to the public, 2011 was the peak, 2010 was  healthy, 2009 was slow comparable to 2012 and 2008 was healthy.  The US coin collector is simply not going to coins shows to buy, they are doing their limited buying over the internet.
 

To offer one perspective from the US buyer side on this…I went to a couple US coin shows this year.  One of them was the big summer show in Baltimore.  I was quite interested in buying or trading China material, but I could find very little material of interest.  There were very few gold pandas.  Moreover, I found zero China material at a smaller show.  I suspect that the dealers present had already started to preferentially send their material to China (or to sell to other dealers who were), where buyers who are willing to pay higher prices can be consistently found?  You mentioned that 90% of some US dealer sales of China material is now headed to China.  Perhaps by last July the demand to fill buy orders for the complete gold panda sets that you spoke of was already vacuuming up supply from dealers?   I see the appeal.  If I were a dealer and I knew that I could rapidly sell complete sets for a nice premium, then instead of conducting many single coin transactions at coin shows with US buyers looking for “deals”, I would definitely focus on filling sets too.  But returning to your point of low sales of China material at US coin shows this year, the public cannot buy lots of China coins at coin shows if there are few being offered (but perhaps the shows I attended were not representative?).

In late 2007 was the first time speculators entered the market in masses, myself included.  We jumped in for different reasons; I was trying buy an asset that was priced in RMB without actually owing RMB currency.

Interesting, I hadn't thought of it that way, but buying MCC is a play on the RMB currency.

How do we wrestle MCC back from the Chinese?  

Be willing to pay higher prices?...

Thanks all.  Interesting discussion.
« Last Edit: December 07, 2012, 11:22:22 AM by Birdman »

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Re: CMC Market Question
« Reply #14 on: December 07, 2012, 12:38:21 PM »
Here is a link to China and silver.  Low bullion supply and now, low MCC supply in the US.  My collecting is coming to an end!.......



http://www.silverseek.com/commentary/china-silver-demand-%E2%80%94-one-step-closer-edge-7956