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A month after the chaotic launch of the 2014-W 50th anniversary John F. Kennedy gold half dollar at the ANA summer show in Rosemont, Illinois things look very different than they did at that time. Prices for coins sold and graded at the show and at other U.S. Mint retail locations have dropped sharply, and sales of the coin by the Mint have slowed dramatically. In fact, in recent weeks there have been several sales reports from the Mint that showed a negative total because of more returns than sales.
During the show the potential to turn a coin that was $1240 from the Mint into a $4-5,000 coin created an unseemly spectacle of greed, frenzy, and security problems. Dealers were paying double or more Mint price for raw coins, and this situation drew most of the energy of the show away from other activities.
Some people, especially the large dealers who were the main ones that sent busloads of stand-in buyers to purchase coins on their behalf, did make big profits during the first week or so after the coin was launched. But to an extent never seen, prices for the show label coins have continued to drop each week since the show. Today it is easy to obtain one for $2,000 or less, or a few hundred dollars over the cost of a non-show label graded example. Industry insiders tell me that many dealers who purchased from other people at the Rosemont show are now upside down on their purchases.
Meanwhile, prices for regular PCGS and NGC PF70 and 69 examples of the coin have also continued to drop in online auctions, and dealer prices have also come down. Some buyers have been able to purchase raw coins or 69s for less than Mint price.
The initial burst of sales during the first week was clearly driven by speculators looking to cash in on show label and other graded coins. But as the supply has continued to increase in the marketplace, prices for graded coins have declined.
Some of the decline in prices for non-show label coins has to do with a certain negativity towards the coin itself that Stephen Roach, editor of Coin World, discussed in his September 8 editorial. In fact, ever since the coin was first proposed a number of coin writers and editors, and some collectors too, have criticized the coin. They said it was too expensive, especially for Kennedy half dollar collectors and that it is not even really part of that series; that it makes no sense to issue a coin that honors a coin; that its odd weight of three-quarters of an ounce would be unpopular, etc.
In addition, the Mint announced during the first week of sales that it might continue producing and selling the coin all year if the demand was sufficient to do so. It said it was prepared to strike 6,000 coins a week so it would have 75,000 coins available by October 1. That figure includes the 40,000 that were ready when sales began.
But given how fast and how much demand has slowed for the coin, not to mention how often raw coins do not even sell when offered on e-Bay, I would not be surprised if the Mint ended sales soon. This may create the prospect of a lower-than expected final mintage for the coin. And that plus higher gold prices down the line could set the coin up for a bright long-term future. As often happens, coins that are not widely sought today become tomorrow’s widely desired collectibles.
Plus the Mint is tentatively planning to issue gold half dollars in 2016 to honor the Walking Liberty half dollar as well as a gold Mercury dime the same year, which will mark the 100th anniversary of the issuance of both coins. There may also be other anniversary coins in the future. The Kennedy gold half fits in nicely with this approach, and some day these may be collected as a set.
Getting back to show labels and the lessons from the JFK show label episode, the market is clearly becoming more astute and sophisticated about coins with these labels that many numismatists have argued are simply not worth the prices buyers were paying for similar coins over the past couple years.
Although it did not happen as quickly, show label specimens of the 2013-W reverse proof Buffalo gold coin sold in Rosemont last year, and show label 2014 Baseball Hall of Fame coins sold in Baltimore this past March, have also seen their prices decline, though not as much as the JFK ANA coins.
The Mint's Deputy Director Richard Peterson said during the Rosemont show last month that the Mint will continue to launch high-profile coins at major coin shows, though in the weeks since then the ANA has made it clear that this will not happen until a new process is developed that prevents the problems seen last month from emerging again. And Mint officials are also reviewing how to better handle show releases.
I suspect that if another coin or set, possibly the proposed 2015 ultra-high relief Liberty gold and silver set, is launched at next year’s ANA, sales will go more smoothly and in a more orderly way. In addition to the fact that new approaches will need to be developed to better handle show sales, dealers and other speculators are not likely to risk spending large sums on coins that may not sell well and that could decline in price quickly.
There will probably always be some market and some degree of premium for show label coins, but as we have seen in the past few weeks, that premium is something in the order of a couple hundred dollars over non-show coins, not several thousand.
This development, if it continues, is another sign of how the modern coin market is becoming more mature, and that modern coin buyers are becoming more sophisticated. And that bodes well for the largest and fastest-growing segment of numismatics.
||Louis is an award-winning numismatic journalist and writer specializing on modern coins. He has been writing a weekly column for CoinWeek since May 2011 called “The Coin Analyst,” which focuses primarily on modern U.S. and world coins and developments at major world mints. In August 2015 he received the Numismatic Literary Guild’s award for Best Website Column for “The Coin Analyst.” He is also a contributor to several magazines, including Coin World, where he writes a bimonthly feature;The Numismatist, the American Numismatic Association’s monthly publication, where he writes a monthly column on modern world coins; and American Hard Assets. He began writing about coins in 2009. He is a founding member of the Modern Coin Forum hosted by ModernCoinMart and has written articles for MCM since 2014. He has collected classic and modern U.S. and world coins since he was about 10 and first joined the ANA in the 1970’s. He was previously a congressional relations specialist and policy analyst at the Congressional Research Service of the Library of Congress and a syndicated columnist and news analyst on international politics and national security for a wide variety of publications. He has been writing professionally since the early 1980s.|