Precious metals have rallied nicely in recent trading sessions, with silver very briefly breaking through the $14.50 level. However, on Thursday, January 28, an obscure and unprecedented event occurred which managed to put the brakes on the rally and caused silver spot to flash-crash over 20 cents. On this day the afternoon London fix – the daily benchmark price at which many contracts are settled – was set at $13.58 per ounce despite the fact that the global spot price was $14.42 per ounce. This abnormally large spread in price undoubtedly caused those locked-in contracts to lose money and has called into question the entire fixing mechanism, which is run by five main bullion banks. The deeper issue is whether price discovery for gold and silver spot in its current form is dysfunctional and inaccurate relative to physical supply and demand. This, in turn, would skew gold and silver’s perception in the eyes of investors and especially the public. We will keep an eye on this as these developments have a tremendous impact on the U.S. coin and bullion market. Strong demand for bullion also sparks demand for rare coins and bullion sales generate significant cash flow for dealers.
REYNOLDS LARGE CENTS, PART ONE
This past Sunday saw the auction sale of part one of the Tom Reynolds collection of large cents by Goldberg Coins & Collectibles in Los Angeles. Proceedings started in a big way, with the PCGS AU53 Sheldon-2 Chain cent bringing $141,000 (the entire collection was certified by PCGS). Many coins hammered at, or above, their pre-sale estimates, with strong competition between buyers on the floor and online live bidders. Lot 48, a 1794 Sheldon-71 graded MS61BN brought a strong $58,750 with an estimate of $30,000. The beautiful MS66BN 1795 Sheldon-76b, distinguished from 76a by its plain edge, was sold for $79,315. As expected, mint state coins were exceptionally strong, with the popular 1798/7 overdate S-152 graded MS61BN at $67,565. One of the Sheldon “NC’s” the 1801 NC-1 in the amazing grade of MS64RB was brought home for $114,565. Though there were plenty more highlights, we will conclude with a strong result which was lot 306, the 1807 S-274 graded AU53. Given an estimate of just $6,000, it crossed the block for $54,050. For comparison, Heritage sold the finest known of this variety – an MS64BN – in 2008 as part of the Husak collection for $63,250.
THIS WEEK’S MARKET
Classic Commems: A few issues, mainly the three Columbia, South Carolina issues lose a bit in MS67 after sluggish auction performance.
Morgan Dollars: Plus signs are sprinkled within this series this week as higher bids have been observed on CoinPlex. Also, we have been getting some requests to add MS61 and MS62 pricing to the Greysheet, but we take this opportunity to inform Greysheet readers that these grades are priced in the Bluesheet.
Eagles: In addition to the upward movement caused by the higher spot price, earlier dated BU quarter ounce gold eagles are bid higher this week with a handful of dates bid at $500.