Our June edition of the Monthly Supplement apparently caused quite a stir among readers-so much so that we felt it would be appropriate to devote this month’s cover story to the topic of how we represent market pricing here at CDN. The reason for the angst was sparked by the introduction of three new pricing columns on page 3, which relate specifically to 20th-century gold issues. We split the pricing of MS63-MS65 coins into two categories: one each for coins that have been CAC approved and those that have not. Decoupling these values has the effect of bringing sharp focus to the ever-growing price spreads on these issues. Most of the feedback we’ve received has been postive and enthusiastic, but we’ve also been taken to task by others who feel that we lowered the previously published levels too quickly-as if delaying the reporting of current market pricing would somehow improve prices (not true).

Resulting dialog we’ve had with readers and key market traders over the past few weeks make this the opportune moment to feature this article to better explain our long-term pricing strategies and hopefully reduce confusion among traders about how market forces affect our pricing. Here at CDN, the key measure of success is that we maintain credibility in the marketplace as having the most accurate pricing information in the world for the areas we cover.

HOW GREYSHEET PRICES ARE DERIVED

To best understand our need for splitting out CAC pricing on 20th-century gold coins, we first need to examine the formula for Greysheet pricing. The methods are straightforward but the practice requires a lifetime in numismatics to perfect. The starting point for all pricing is the existing published value. Period. Historical prices matter, which is why we know that 1914-D pennies are valuable, even in low grades. They’ve always been considered a key date and both collectors and dealers seek them out. The same concept applies to 1911-D quarter eagles, a highly coveted issue that bids $2,800 bid in XF.

The second step in evaluating pricing comes from anecdotal market information. Are Indian Head quarter eagles strong now? How does the demand look? Are there any new market bids for these coins since the previous publication? We look into all of these factors and examine the most recent auction price (APR) data to determine if pricing should be adjusted. In the current marketplace, most coins valued over $250 are expected to be certified, and the live/internet auction companies (e.g. Heritage, Stack’s Bowers, Golderberg, Legend, David Lawrence, Lyn Knight, etc) offer critical insight into the levels that coins are trading.

Interpreting this data is still not as easy as it sounds because many coins sell below or above published levels, and we must make a determination as to whether the new value represents a market shift, or not.

Further complicating the matter of pricing is whether or not the coin is CAC approved. If it is CAC approved, and the new trade value is higher than published, should ALL coins of this date/grade reflect this higher number?

THE CAC WILDCARD

The long-standing tradition of pricing coins at CDN has followed the doctrine that Greysheet represents a value for a high-end coin of its grade. Likewise, we are not trying to value an AU coin in an XF holder either. We just want to publish a value for a nice coin for the grade. Sounds simple, right? It’s not. When I took over as publisher of CDN in August 2015, CDN had made a long-standing practice of respecting the highest published sight-seen bid for a coin on a dealer exchange network like CDN Exchange (CDNX). If a market maker like CAC (the trading arm of the stickering service) wishes to publish buy bids for coins with very selective quality, that’s always been acceptable for use as the Greysheet value, so long as said market maker is reputable for honoring their transactions. By this measure, CAC is the ideal bidder. CAC literally has hundreds of millions of dollars in posted bids for coins they have pre-qualified. Anyone on the CDNX can hit their bid, ship the coin(s), and expect immediate payment. In six years’ time CAC has established itself as the single largest market maker across the board on CDNX (or anywhere!).

CAC’s bid values are higher than virtually any other bidder for coins they are competing for, and thus they have supported the market for hundreds of thousands of coins. So reliable are CAC bids now that most sellers bypass CAC altogether and sell their CAC-approved coins for even more money outside the exchange.

Those invested in the rare coin market as a whole should be extremely grateful for CAC’s market support-even if they don’t support the service itself. In many cases, coins would be valued far lower without their bids, and we prefer to maintain the strongest possible set of values in support of a healthy market.

Take, for example, the Heraldic Eagle Draped Bust dollar type of 1798-1803. CAC has maintained a bid of $4,000 in XF40 for this coin for several years, however we count dozens of examples to sell in public auction for levels of $3,000-$3,750. If not for the fact that XF Draped Bust dollars regularly trade in the CAC circuit at around the $4,000 level, we would immediately have to drop the Greysheet prices listed for these issues to reflect their generally lower prices realized at auction. There are many more such examples to be found in Morgan dollars, 19th Century mint state and proof type coins, and so on.

This puzzle has vexed us continuously for the last 18 months, and the spreads between CAC and non-CAC are seemingly growing, not shrinking. Our goal is to best represent a coin’s wholesale value to our readers, so hopefully you better appreciate the complexity of the situation.

WHY ARE CAC PRICES HIGHER THAN NON-CAC?

This is a question we often see posited by collectors on message boards. The reason is simply that CAC has determined that a sub-grou