By Leo Frese, Independent Numismatic Consultant – LeoFreseCoins.com ………..
The special Reverse Proof $50 Buffalo gold coin is currently being produced and sold by the Mint. If you can buy a piece directly from the Mint for $1740, why would you purchase one currently offered in today’s marketplace for $3000-4000? Let me begin by stating that I have not been involved in the modern coin market. In some ways, the mass production of Commemoratives, Special Sets, Special Strikings, and various forms of bullion remind me of the Franklin Mint productions of the late 1970’s. That said, there are some coins which capture the interests of the collectors and perform quite well over time. “Modern Rarities” as they are called, are eagerly sought if all the conditions are right.
The 2013-W Reverse Proof Buffalo is commemorating the 100th Anniversary of the initial striking of the Buffalo nickel in 1913. As such, it has a “cross-over appeal” to collectors of the nickel series. Demand will be present from some of these collectors. The Buffalo gold series began in 2006, so there will be demand from those seeking to complete or keep their sets up-to-date. Bullion is popular again, so there will be those who are looking mostly for a “safe haven” play. So far, none of these criteria bode well for the Buffalos to be trading at levels 2-3x their bullion value, especially when you can still order them from the mint for several more days.
So why is there a demand for some of the coins in today’s marketplace? Well, it would appear the final mintage figures on the 2013-W Reverse Proof could exceed 50,000 coins. Of these, collectors will pay a premium for “Early Release” coins. The premiums can be in the 10-30% range. But there is something even more special about some of these Buffalos, that being the “ANA RELEASE“.
At the ANA Convention in Rosemont, Illinois (A Chicago suburb), 2000 of these Reverse Proofs were released. Both NGC and PCGS offered special grading inserts on coins that were purchased there and submitted for grading at the convention. And these are the coins collectors are seeking! While we wait for the figures of grading submissions to appear on the Census and Population Report, it is clear that only about 60-70% of the coins were submitted for grading. Of those graded, it appears that more were submitted to NGC than to PCGS.
So what are these coins worth? As of this writing, the Proof 69’s are selling in the $2000-2500 range and the Proof 70’s are in the $3000-3900 range. Although these premiums may seem high to some, the fact that only about 1500 coins appear to ahve been graded (and even if all 2000 were graded), they certainly qualify for “Modern Rarity”. If the market promoters seek to truly push the “ANA Releases” to their client base, they could easily double from here! Now keep in mind, this is merely an opinion that I offer. I do not hold a large stake in these coins, in fact I have only purchased 7 pieces for various clients (4 PCGS and 3 NGC).
I may buy one to put away for a few years just to see what happens! If gold approaches the $5000 level some claim I will have done well regardless. If bullion drops below $1000 I will pray that these “modern rarities” found a niche in the marketplace!
Enjoy our hobby!
For more information on this coin, or your own consignment opportunities visit Leo’s website (LeoFreseCoins.com) , call (949.291.8496), or email him “[email protected].
PCGS pop report shows 700 of the ANA coins were graded by PCGS. According to the PCGS forums, 941 were graded by NGC. So 82% of the 2000 were submitted for grading
FEB 2016 UPDATE: Well, you can buy a Chicago ANA MS-70 from the major online dealers for about $2,200. You can see active bidding on Ebay a few hundred dollars below that; I’m sure some coins go for less and maybe a few go for just under or just above the online dealers Buy It Now prices.
So the price has fallen another 25-30% from the depressed price after the bubble burst. If you bought 1 or 2 at inflated levels, hey, as long as you like the coin. But this shows why you should ALWAYS ask what happens if the price of a modern coin, even a specially struck one, falls to the underlying bullion value. Will you be happy with your purchase ? If you lose 30-50% (or more) of your investment, does that matter ? If you just wanted 1 or 2 for your collection or as a future gift and enjoy looking at it….no harm, no foul.
The problem is always the same: these coins have limited supplies…..special labels….artificially high demand….and NOBODY wants to wait a few months (or years) to buy one later at lower prices. The Mint is always coming out with new items, some good some lousy, but new just the same. What is New & Hot today will not be the case 2 years from now. And with a limited supply of $$$ in this hobby, it means that the ‘hot money’ goes elsewhere. It’s no different than any other market: real estate…. stocks…. currencies…. antique cars… whatever.
Leo, I enjoyed your article but the market for these types of ‘hot’ coins always cools off. But you yourself said you just bought 1 so hopefully no novice collectors got burned.
Caveat Emptor !!