Sunday, November 13, 2011

Buying Panda Coins on Ebay

Chinese Pandas have very low mintages compared to US modern coins, and they are dispersed widely around the the world. Ebay is one of the few places where a large number of Pandas are available for sale 24/7, worldwide.

Ebay and its subsidiary Paypal have significant strengths and weaknesses that are important for anyone trading Chinese coins to understand.

Ebay Strengths
  • Worldwide market with many coins listed
  • An large pool of active buyers and sellers of Chinese coins 
  • Fees that are lower than most major coin auction houses like Heritage and Bowers
  • Paypal has excellent buyer and seller protections against fraud
Ebay Weaknesses
  • The seller rating system is not sophisticated and doesn't communicate a sellers character.
  • Unknowledgeable sellers and expert sellers are difficult to distinguish
  • It can be difficult to identify problem coins vai photos alone.
  • Scammers occasionally sneak by ebay screening systems, especially in China, and collecting on buyer protections can be a hassle.
  • Ebay and Paypal fees are still quite high compared to face-to-face deals.
How to use Ebay and Paypal for buying coins

Ebay is excellent for connecting buyers and sellers of chinese coins. Finding coins to buy and comparing prices has never been easier.

Paypal provides fraud protection for both buyers and sellers.  If a seller's coin is not as advertised, or not delivered. a buyer can get refunded by Paypal if the seller is uncooperative.  Similarly, if a buyer doesnt pay, files a fraudulent chargeback, or tries to use a stolen credit card, Paypal will cover the loss.  This very valuable feature allows both parties to have the confidence to make high value transactions online.

Nevertheless, be cautions of sellers like these:
  • A history of selling $2 trinkets and then suddenly start selling $2000 coins
  • Gold coins selling under spot
  • Photos that are "stock" or copied from another seller
  • Photos that are not of the exact coin
  • Blurry or dark photos
  • Prices that are way out of line from other sellers or the price trend.
Although you are protected by Paypal, it is still a hassle to have to wait for disputes to be resolved.

We also recommend buying Pandas certified by PCGS or NGC only, unless you are very knowledgeable and can identify fakes, or you are working with a seller who you trust to identify fakes for you.  This will be very important when it comes time to sell. 

Ebay and Paypal Fees

The seller pays all Ebay and Paypal fees.

Ebay Powerseller fees vary from 11% for items under $50 and drop to about 2.3% ($114) for a $5000 fixed price item.  New ebay sellers will pay 20% more ($137 on $5000) until they are established.

Paypal fees depend on monthly volume.  About 2.9% for low volume sellers scaling to 1.9% for those processing more than $100K per month.  Typically, its about $110 on a $5000 coin.

Overall, the seller has to carry at least 5% in fees on a sales over $1000.  In a business where margins are often 5% or less, this is a huge tax.  As a business necessity, very often this fee is embedded in the listed price. It effectively inserts 5% into the bid/ask spread that buyer will have to pay.

Clearly, the value of Ebay and Paypal services are diminished once buyer and seller know and trust each other.  Ebay and Paypal fail to consider trusted party transactions in their current pricing structure.  As a result, many sales go "offline" in order for reasonable deals to be made.

How to save 5%

If you already have a good relationship with a seller, you may want to ask the seller if he has any coins he can sell "off-line" with a payment by check in exchange for a price discount of 4-5% off a comparable Ebay listed item.  The seller will net the same amount and you save a few hundred dollars!

It is against Ebay policy to negotiate off-line sales through the Ebay message system, or to renegotiate items already purchased through Ebay.  However Ebay does not have jurisdiction over sales conducted entirely outside of Ebay.  So it is best to use the sellers direct email address or a phone call to make this kind of deal.  Ask if he has any other coins like the one you saw on Ebay, but at a lower price.

Note that you will not have the Ebay/Paypal buyer protections, so be sure you trust the seller to deal fairly.

Until Ebay and Paypal adjust fees to better match the needs of the coin market, this is a good way to pay less for good coins from reputable sellers.


Many of the best coins will be listed at a fixed price, waiting for a discerning collector to come along.  However, sometimes Pandas come up or sale on Ebay as an auction rather than at a fixed price.  There are three reasons why a seller would use an aution.
  1. the market is hot or the coin is very rare and he hopes that his coin will be bid higher than previous sales
  2. he doesn't know what the coin is worth and lets the auction decide
  3. he doesn't care to maximize his selling price and just wants to liquidate quickly
Mass marketers and pawn shops sometimes dump coins onto ebay to raise cash or take a quick profit.  If too many are sold at once, or the auction ends at 3:00am, there are not enough cash-ready buyers online to bid for everything.  High-end auctioneers like Heritage manage auctions to maximize prices, but Ebay is unmanaged.  This can be a short term buying opportunity for savvy buyers.

Sometimes coins are underbid because the coin has problems or the seller is unkown to collectors.  Sellers who "dont know" or "dont care" about pandas, may not be able or willing to properly disclose issues and stand behind their coins.

Auctions can be fun and sometimes good bargains can be found.  However, a relationship with a good dealer can help you avoid costly mistakes.

Sunday, November 06, 2011

Panda Coin Buying Opportunity

Like any market, the Panda coin market goes through short term cycles.  After very powerful moves in spring and summer of 2011, it looks like this fall is a time of consolidation.  With a pull-back in gold from $1950 down to the 1600's, many newer entrants in the market are now hesitating.  Some are selling. Did the market peak?  Will pandas go down from here?

Whatever the reasons, there are now many excellent quality Pandas available on the market, and overheated prices have pulled back.  Key dates and rarities are still quite strong and going higher, but many excellent coins are now re-appearing at good prices.

The old-timers and market savvy collectors see pull-backs as a prime opportunity to find good deals.  Major dealers are happily re-stocking at bargain prices.  This is the time to buy!

Chinese dealers are buying in full force, raiding US inventories for any gold panda from 1990 to 2003.  Certain dates are targeted for accumulation, including 2000 to 2003 gold panda sets. They know to strike when the coins are available, and they are expecting renewed Chinese market strength in December and January. 

Gold fundamentals are stronger than ever.  We will see $2000 gold soon.  The European debt crises illustrates how deep the economic rot has become worldwide.  Chinese investors are looking to store wealth outside of the weakening real-estate sector and outside of paper currencies.  This trend will continue. 

Key coins to watch:
  • 1989 BU Gold, all sizes (maybe not as common as we thought!)
  • 1989-P proofs
  • 1990-P proofs 
  • 1992 and 1993 still in thin supply
  • 2000 frosted (1oz and 1/2 already pushing $3000), all sizes
  • All 1/2oz Pandas

High Flyers - look for deals that wont last:
  • 1998 small and large dates
  • 1999 all types still strong
  • 1995 - ready to catch up to 1998?
  • 91, 92, 93 and 94 proof sets are still being acquired by strong hands

Wednesday, October 26, 2011

Global Gold Demand

The graphic below shows that physical gold trading in the US is just a quite backwater.  China and India are doing the buying, hand-over-fist.

Chinese gold coins were sold only to foreigners for decades, but now they are being brought back home by eager Chinese buyers.  As the China real estate market falters, wealthy Chinese are seeking new places to preserve wealth.  That place is gold!

The US panda coin market has been slow in October, but Chinese dealers are buying from US dealers on the weakness.  Prices for many Pandas are decoupling from spot gold, and did not decline appreciably despite a $300 drop in gold.   Prices on many pandas may not be this low again, and will likely surge with the next run-up in gold.

This represents a once-in-a-lifetime opportunity.  Gold Pandas will be sold to Chinese investors.  Will they buy the coins from you or someone else?

Monday, October 17, 2011

Hong Kong Coin Show

In August, I attended the 2011 Hong Kong International Coin Convention.  The Hong Kong show is the world's #1 show for Chinese Modern coins, and I wanted to get the pulse of the market in Asia.

Compared to the major coin shows in the US, the HK show is physically small, occupying a little more than a ballroom at the Holiday Inn in Kowloon.  Surprisingly, the show floor is about 70% occupied with watch dealers - a throwback to when coin and watch dealers needed to join forces to draw enough visitors.  However, now it appears that the fairly small contingent of dealers in Chinese coins attracts the majority of traffic.

Attendance at the show was overwhelming.  The bourse floor was so packed with people, that you couldn't walk the aisle or see the dealer tables without pushing your way between bodies.  US shows feel like a leisurely stroll in a spacious mall by comparison.

Just prior to the first day opening, a large contingent of dealers from the Chinese mainland descended on the tables of the major US and European dealers, each elbowing their way into position to try to be the first in line to buy.    It was very clear that these wholesale buyers were very hungry for any new material they could find to feed what must be very strong demand in Shanghai and Beijing.

As I have mentioned previously in this blog, most Pandas and many other Chinese modern coins were exported to the west up until about 2001.  Therefore, most of the desirable coins are outside of China and are now making their way home.

For coin dealers, the first day of the show could be described as a feeding frenzy.  Buying was fast and furious, and there was little or no negotiation for the most desired coins.  To say that money was being thrown at coins would not be an overstatement.  At times, paper money was actually thrown on the counter to try to close a deal.

Before and after the show, there were coin auctions in nearby hotels held by Baldwin, Spectrum, and Champion.  The Champion auction was focused entirely on modern Chinese coins and had the most high-end coins overall.

The next show will take place in early December.

Friday, July 22, 2011

Summer Slowdown Buying Opportunity for Pandas

The first half of 2011 was an extremely intense period for for Chinese Pandas and Chinese modern coins. Beginning with the very strong Hong Kong Champion Auction in December 2010 through June, extremely strong buying from China, US, and Europe drained dealer stocks and drove prices skyward.

In July were are finally getting a rest. The summer doldrums that are typical in coin and precious metals markets have set in, allowing dealers to catch-up and re-stock. The relentless rise in prices has taken a pause, presenting an opportunity to buy many of the best coins while they are still available. We fully expect Chinese buying to resume in earnest this fall, accelerated by what may also be a rising gold bullion price.

Strong hands are now focused on buying some previously over-looked coins. Including:
  • 1/2oz Gold Pandas from 1990-2007
  • Gold Panda Proofs 1986-1994

The half ounce pandas have some of the overall lowest mintages of the series, but have been overlook in favor of the big 1oz coins. However, with most 1oz Pandas now trading over $2000 (and many at $3000+), the half ounce looks much more affordable. Mid 1990's dates are already scarce, but early 2000's are still possible to find, but are going fast.

The lowest mintage gold proofs, 1995 and 1996 are trading in 5 figures and are out of reach of many, but the earlier proofs, especially 1986-1991 are still reasonable. Mintages over this period were 10,000 to 3,500 coins, but prices do not yet fully reflect this scarcity.

Other current market trends include:
  • Very strong buying of MS69 and PR69 coins. The premium for 69 over 68 and raw coins has expanded.
  • Silver pandas of all types have been very strong despite the pull-back in silver bullion prices.

Silver panda mintages are much lower then US Eagles and other mainstream coins, and silver is more afordable to collectors worldwide. MS69 graded silver pandas and certified silver pandas in general are commanding a premium as buyers seek out quality and authenticity. As silver resumes its upward climb past $50, we expect to see silver pandas out-perform the metal.

We see a few pandas that remain "sleepers" with prices that do not reflect the scarcity. These include 1991, 1994, and 1997 gold 1oz, 1986-1989 proofs, as well as 2002, 2003, and 2004 of all sizes. Value seekers may want to consider these for the longer term.

Thursday, May 26, 2011

China buying up world's gold bars and coins

Below is a link to mainstream article that notes the massive Chinese buying of gold.

This is the force driving the rapid price increase of gold Pandas and other Chinese gold and silver coins.

Ken Sweet, contributing writer, On Friday May 20, 2011, 3:47 pm EDT

China edged out India to become the world's largest buyer of investment-grade gold products, according to a World Gold Council report.

In the first quarter, Chinese consumers purchased 90.9 metric tonnes in gold bars and coins, valued at $4.1 billion.

That's more than double the amount Chinese consumers were buying year ago. It's also more than the 85.9 metric tonnes bought by Indian consumers during the first three months of the year.

"Persistent high inflation levels in [both countries] continued to motivate investment in gold," the organization's analysts wrote in a research report.

India still dominates the gold jewelry market, buying 206.2 metric tonnes in the first quarter, compared with China's 142.9 metric tonnes.

China and India account for nearly half of all gold products sold during the first quarter, said the World Gold Council.

"You have a growing middle class that has increasing disposable income that is also concerned about upward inflation pressures," said Carlos Sanchez, a precious metals analyst with independent metals research firm CPM Group.

Sanchez expects China's market to continue to grow noticeably for the foreseeable future as the country's economy expands.

Monday, March 07, 2011

Massive Chinese Gold Buying


The buying frenzy reached a peak in December at the Champion Auction in Hong Kong. Low Mintage modern Chinese coins sold at prices well above expectations. Anything with a mintage less than 2000 saw breathtaking prices. Buyers were particularly eager to bid on Chinese commemoratives, with some 1oz gold coins selling at more then $10,ooo each. 1995 and 1996 Panda proofs were well bid in the December auction, but most Pandas were out of the spotlight.

The serious Panda buying took off in January and February. Gold BU pandas with 1990's dates were purchased in large quantity by Chinese buyers, draining dealer stocks. Coins such as 1996 and 1991 gold pandas that were readily available last summer are now difficult to find.

The list of "sold-out" dates now includes these 1oz Gold Pandas:

1999 serif and small date
2000 Mirror
Most Gold Panda Coin Show Medals

The following are still available, but perhaps not for long:

1999 large date
2000 frosted

Half-ounce pandas are even more scarce for all 1990's dates.

Silver Pandas are also seeing heavy buying, pushing premiums up to $20 - $80 over spot for many dates