By Douglas LePre, Senior Portfolio Manager at Blanchard and Company, Inc.

Over the last 30 years, the coin market has changed dramatically. Initially this market was primarily for collectors who built sets as a hobby there were no grading services and very few auctions where coins sold for six figures, let alone seven. Its truly impressive to see how this market has matured.

One of the more recent additions to the market has been Certified Acceptance Corporation, or CAC. This firm was established in late 2007 by John Albanese, who also founded the Numismatic Guarantee Corporation (NGC) in 1987. The reason I refer to CAC as a recent addition even though it is nearly nine years old is that only in the last three or four years has CACs effect on the market really become apparent.

The two primary grading services, Professional Coin Grading Service (PCGS) and NGC, had not entered the market until the late 1980s, and prior to their existence it was far harder to accurately determine a coins grade or value because grading is a subjective science one dealers MS64 could be another dealers MS63, which could have easily been another dealers MS65.

Oddly enough, prior to the grading services, all of these varying dealers opinions would have had a legitimate leg to stand on because they would each have diagnostics that led them to their conclusion. Its for this very reason that the grading services helped to create a stable market environment for both buyers and sellers.

PCGS and NGC have done for the coin market what PayPal has done for secure online purchases. The grading services have created nonpartisan intermediaries that dont have any monetary interest outside of their service fees, therefore creating a completely objective environment in which coins can be graded.

In their early days, the grading services were very conservative in their grading practices, which makes sense as they were new to the industry and had to be extremely careful as they built their reputations and proved their value to a skeptical market.

Over time, grading standards have matured and established an equilibrium in the current day marketplace, but as most collectors know, there are really pretty MS64 Morgan Dollars and there are unattractive looking MS64s as well. This is where CAC has found its place in todays market as an asset to coin enthusiasts and the industry as a whole.

CAC has created a means of earmarking coins that are of superior quality by using a holographic sticker bearing its initials. Like the grading services, CAC also keeps an updated population report of the coins it has certified as well as offering a means of verification by using the unique data located on every coin graded by either PCGS or NGC. CAC, unlike the grading services, has a system in place that prevents the same coin from being submitted repeatedly with the hope of a recognition of premium quality. Once a coin has been submitted to CAC and doesnt meet their standards, it is earmarked in their system and turned away should it be resubmitted.

When first entering the numismatic market, there were many that doubted the need for such a service, but the market has spoken and proven the naysayers wrong. Today, CAC is considered another layer of pedigree that collectors and investors pursue and prefer to own.

CAC coins generally carry a premium over their non-CAC counterparts, but in the long run CAC coins tend to appreciate better and have a higher liquidation price in the marketplace.

Another noteworthy fact is that CAC adds an additional layer of rarity to already rare coins. For instance, if a coins total graded population is 100 coins, one example represents 1 percent of the entire market. However, if CAC has only earmarked ten of those coins and a collector owns a CAC example, then that one coin represents 10 percent of the superior quality market.

I think you will agree that with the trend in this market having turned toward quality over quantity, CAC can only add value and peace of mind to your numismatic purchases and in the long run make your coins more desirable!

A major industry group has issued a new eye-popping estimate on the monetary value of the rare coin market in the U.S.

According to a survey of knowledgeable players conducted by the Professional Numismatists Guild, the overall U.S. rare coin market in 2015 was between $4.5 billion to $5 billion, although one expert estimated it at $6 billion.

The amazing thing about the PNG estimate is that it excludes numismatic bullion items and modern coins sold directly by the U.S. Mint, as well as collectible paper-currency notes and world coins. Therefore, were talking about real numismatic items from Americas golden age of coinage (in general, up to 1933 for gold coins and up to 1964 for silver coins), not any sort of modern issues.

Demand for superb-quality, historic U.S. rare coins remained strong in 2015, PNG commented, and by its calculations, a record 17 coins commanded more than $1 million each during the past year, compared with 12 in 2014. Of the 17 $1 million+ coins (most of which Blanchard and Company listed in a Dec. 23 2015 blog post), seven carried green stickers from John Albanese‘s CAC verification service more proof of the value-enhancing capability of the CAC endorsement.

Although the drop in gold and silver bullion prices affected demand for more common collectible coins, the clamor for trophy coins or those that combined historical significance, rarity and superb condition was robust in 2015.

PNG’s findings jibe with conclusions made by some of Blanchard and Company’s numismatic analysts. Senior portfolio manager Douglas LePre has argued that collectors and investors should focus on the ideal of quality over quantity, or focusing on purchasing the rarest coin you can afford, while senior portfolio director Bruce Smith has recommended that numismatists never skimp on pricing or competing for the chance at supreme quality.

With 2016 already having seen its first coin sell for seven figures (the 1894-S Barber dime, for almost $2 million), the new years prospects continue to look bright for ultra-rarities, while the uptick in bullion prices also could lift the market for more common collectible coins if the impressive momentum seen so far has longevity.

The new year is just getting under way, and already the numismatic world has logged its first seven-figure rare coin sale. Whats more, the ultra-rare silver Barber dime zoomed past the $1 million mark only to fall just short of $2 million.

Only 24 were minted: An anonymous buyer paid $1.997 million for the 1894-S Barber dime, certified at PR66 by PCGS and also sporting a green CAC sticker.

The San Francisco Mint struck just 24 of the dimes, and only eight to nine are thought to exist, though more could be lurking around undetected. The dime sold Thursday in Tampa, Fla., is widely hailed as the finest survivor.

Panic scuttled production: Its ironic that the 1894-S is so rare because in 1893 the San Francisco Mint produced almost 2.5 million of the Barber dimes. However, the so-called Panic of 1893 resulted in the mint scrapping similar large-scale production plans in 1894.

As its selling price attest, the coin ranks up there with the most storied specimens in numismatic history, including the 1804 Flowing Hair silver dollar and the 1913 nickel.

Coin has serious pedigree: The storied Barber dimes previous owners include renowned numismatist and Blanchard and Company consultant John Albanese, who paid $1.9 million in 2007.

Some stories suggest that the 24 Barber dimes were minted simply to balance the mints accounts before the end of its fiscal year on June 30, 1894.

Once again, the significant sale price for this coin, approximating levels seen for some pieces of fine art and other luxury collectibles, suggests that the market for ultra-fine numismatic rarities remains strong. And with gold and silver prices among the few bright spots in 2016s early landscape, hopes are that the more generic areas of collectible coins, whose prices trade more closely in sync with bullion, also will see gains this year.

One of Chinas primary tactics by which to navigate its current perilous financial straights is to devaluate its yuan, or renminbi, currency.

The devaluation, among other things, allows China to boost its struggling economy. A weaker yuan increases the competitiveness of Chinese exports and reduces the Chinese propensity to import, Commerzbank strategist Simon Quijano-Evans told Bloomberg.

But while its dumping dollars and other parts of its foreign-exchange reserves, it nevertheless continues to add steadily to its gold holdings.

100+ tons added in 2015: As of December, the Peoples Bank of China (PBOC) bought 19 more metric tons of gold, lifting its officially reported holdings to 1,762.323 tonnes. It added more than 100 metric tons in the second half of 2015, or about a 6% increase since it began updating its reserves via public announcements early in 2015. Still, its current bullion hoard represents only about 1.8% of its total foreign-exchange reserves.

More purchases by the worlds sixth-largest official-sector gold holder could lend support to international prices of the precious metal, Reuters reported. Higher gold prices will not necessarily curb PBOCs buying, but a sharp drop could prompt it to purchase more.

Aiming to rival the U.S. dollar: At these sorts of price levels, combined with Chinas determination to both diversify its foreign reserves and also to try and promote the yuan as a rival world currency to the U.S. dollar, I expect China will maintain its program of gold buying for a considerable period of time, MineLife Pty Ltd. exec Gavin Wendt told Bloomberg.

The world might be rediscovering gold as a safe haven in 2016, but China has never lost focus on the yellow metal and its unique wealth-preserving and diversifying properties. In fact, most informed observers think Chinas true gold holdings are much larger than their officially reported reserves. But until that theory is supported by concrete facts, gold investors now should be comforted by the fact that Beijing remains a steady buyer of bullion, likely for the long haul.

Vault has 1,500-ton capacity: For new proof of Chinas commitment, look no further than a new Reuters report that Chinas largest bank, ICBC Standard Bank, has purchased the lease on Deutsche Banks relatively new 1,500-ton London vault, which became operational in June 2014. The German bank pulled out on the project after liquidating its precious-metals trading arm.

In fact, according to Zero Hedge, ICBC is in fact the world’s largest bank by assets. Control of the new lease is aimed at enlarging its footprint in the city’s bullion market while seeking to fill the gap left by Western banks, which are retreating from commodities to cut costs and reduce regulatory burden, Reuters added.

The bank is currently pursuing membership in the London Precious Metals Clearing (LPMCL) company, which conducts clearing in the London Bullion Market Association. Thus, the vault will help China in its goal to have a greater sway in the price-setting mechanisms of the gold market, which London still dominates.

Gold is enjoying a great start to 2016, but investors shouldnt forget about that other major precious metal: silver.

Nicknamed the devils metal, silver is often viewed as a beta play on gold, in that once the latter metal starts moving higher, the former can produce even greater returns on a proportional level. Whereas gold has been compared to a large aircraft like a B-17 bomber, silver is sleek and nimble like an F-16 fighter jet.

Price rose 14% last time around: After fluctuating between 69 to 79 over the course of 2015, the gold-silver ratio now stands at 78:1. That is, it takes 78 ounces of silver to buy one ounce of gold. In the past two decades, the ratio has only been above that level on about five occasions, and never for more than a three months, Bloomberg reported.

And the ratio hasnt been this high since August, when it stood near 80:1. What happened then? Silver rallied 14% in the following two months. Gold added about 5% in the period, Bloomberg noted.

Coin and bar options abound: If youre looking for a bullion product that tracks the price of silver while also boasting an attractive design, look no further than the silver American Eagle bullion coin produced by the U.S. Mint. A new all-time sales record was set last December when the Mint sold 47 million of the 1-oz. coins over the course of 2015. In fact, silver Eagles have experienced their five best sales years in the recent past, when records were set in 2014, 2013, 2011, and 2010.

The new 2016 silver American Eagle will go on sale in the coming days. Other major mints also produce flagship silver coins, such as the silver Maple Leaf from Canada. Blanchard and Company also regularly offers privately minted silver rounds, circulated Morgan dollars, circulated Peace dollars, 10-oz. silver bars, and 100-oz. silver bars.

And for the silver investor who has everything, consider a sealed green Monster Box of 500 silver American Eagles.

The new years first week is well under way, and 2016 so far hasnt been kind to the global stock markets. As some analysts have shown, opening day for stocks often sets the tone for the rest of the year.

In a note titled The 7-Year Cycle in Equities Is Rolling Over…Buy Gold!, one major Swiss investment bank is throwing caution to the wind and predicting the end of the seven-year bull market in equities, with a significant correction forecast for the S&P 500, or SPX.

20% to 30% decline seen: Tactically, after a weak start into January, we still see the chance of a bounce and selective overshooting in later [first quarter]towards 2,200 to best case 2,300, wrote a UBS team led by Michael Riesner and MarcMller. However, looking at the further increasing selectivity/volatility globally, andtaking into account that from a cyclical aspect the eight-year of a presidential turn has quite a negative trackrecord, we expect the SPX to move into a [second quarter] top and fall into a full-size bear market, with risk of a 20%to 30%correction into minimum later 2016 and worst case early 2017.

What does a potential bear market for stocks mean for gold? Precisely what you might expect for two asset classes that historically often move in opposite directions: UBS is predicting that the building blocks of a new bull market in gold will fall into place in 2016.

Dollar goes bearish by 2017: Gold has been trading in a cyclical bear market since 2011, the team noted. In 2016, we expect gold and gold mines moving intoan eight-year cycle bottom as the basis for the next multi-year bull market. Initially, we see gold profiting as a safehaven and as of 2017, gold could profit from the U.S. dollar moving in a major top and starting a bear market.

A key catalyst for a turn in the dollar would be if the Federal Reserve reverses course and loosens, rather than keeps tightening, monetary policy in reaction to deteriorating economic conditions. This big U-turn in policy might result in a fourth round of quantitative easing, or QE4.

However, UBS apparently isnt predicting a straight-up move higher from here. It sees the potential for another major buying opportunity that investors should not be concerned about, but rather seize with both hands.

A potential bottom in 2016 bottom could be a rather powerful bottom, since together with a four-year cycle low we have also an eight-year cycle low projection for this year, its analysts wrote. In this context we expect a potential 2016 low in gold to be the basis of a new multi-year bull market.

No bubble until $3,300: For UBS, the bull market in gold never ended with the 2011 peak and subsequent price drops. Rather, the pattern in evidence today is merely like what occurred during the mid-1970s. Pattern wise we continue to see the 2011/2016 cyclical bear market in the same context as the 1975/1976 bear cycle in gold, UBS argued. Keep in mind, in the mid-70s gold lost 43% of its value from its January 1975 top before another gold bull market started into the January 1980 bubble peak. It is amazing to see that with a loss of 45% from its August 2011 top into the early December 2015 low, the decline in gold has more or less exactly the same proportion as in the mid-70s.

Furthermore, there are still a lot of market commentators who say that the August 2011 top in gold was the top of a bubble. According to the average gains we have seen in historical financial bubbles, the gold bull run from 2001 into 2011 (760%) was far away from any bubble territory. In the first gold bubble, gold gained 2400%. In the 1903 to 1929 Dow bubble, the Dow Jones Industrial gained 1200%. The 1979-1989 Nikkei bubble came in at around 2000% and the 1980-2000 Nasdaq bubble topped out a +3900%.

So if gold moves into a bubble, we would need to see a gold price of minimum $3,300, and in this case we would still talk about a low bubble phenomena such as the 1903-1929 Dow Jones bubble!!

In other words, if UBS is correct, you aint seen nothing yet in gold, and the $1,900 peak reached in 2011 could be merely the opening act or intermission before the yellow metals bull-market resumption and all-time record-setting crescendo.

Is it safe to come out yet after this weeks carnage in the Chinese stock market? Not according to at least one major investment bank. And if Chinas economic woes persist, look for a potential resurgence in gold demand from the citizens of the worlds most populous country.

The Shanghai Composite stock index could lose 27% by the time 2016 is over, thanks to slowing growth and major debt, predicts Bank of America Merrill Lynchs head of Chinese equity strategy, David Cui.

High risk of credit crunch: Historically, any country that grew debt this fast inevitably ran into financial-system problems, including currency devaluation, banking recap, and high inflation, and we do not expect China to be an exception, said Cui. We believe that the government had maintained system stability over the past few years by allowing various implicit guarantees to get firmly entrenched, which has made the financial system fragile.

Cui expects further financial instability to manifest itself in the form of a combination of RMB devaluation, debt write-off and banking sector re-cap and possibly high inflation. Given the sizeable and unstable shadow banking sector in China and the potential of capital flight, we also think the risk of a credit crunch developing in China is high.

Battered investors swear off stocks: If this is just the beginning of turbulence in the Chinese stock market in 2016, then gold could gain in allure as Chinas gun-shy neophyte investors return to what they know as a traditional safe haven: bullion bars, coins, and jewelry.

According to one Associated Press story, Chinese investors are already getting frazzled as their equity investments sour. I do not want to invest anymore, one citizen complained. This is just too miserable. It hurts, emotionally, a lot.

Battered by market gyrations, Chinese small investors are swearing off stocks, the AP noted. Despite a rebound in prices from their August lows, no significant new money from small investors has flowed into stocks.

They have either no more money to invest or they just dont want to invest anymore, said Guo Yanhong of Founder Securities.

Global economy is slowing: In contrast to stock investing, gold has been a culturally important form of saving and investing in China for thousands of years. No doubt the Chinese will be holding onto their yellow metal a bit more tightly this year if Bank of Americas forecast pans out.

Western investors should be paying attention, too, because according to The Lindsey Groups chief market analyst, Peter Boockvar, the Chinese stock correction is sending a dire message about the U.S. economy.

The Chinese economy has been slowing for years, but its a wakeup call to the markets that the U.S. economy is slowing down, the global economy is slowing down, and central bankers are losing their effectiveness in propping things up, Boockvar told CNBC.

Bottom could be in for gold: If the stock bear takes hold, where should investors turn? Investors have to go to whats already been beaten up, and commodities are now 4 years into a bear market. I believe that the drop in oil last year was the last phase of the bear market, Boockvar said.

If what we saw yesterday in the markets is a precursor to more, the Fed, I dont see them raising rates again. Therefore, the dollar strength is not there, commodities may get a bottom from that, gold and silver will be a big beneficiary of that. Theyve had a rough four years, and I think the bottom is in.

Meanwhile, China is making clear that the foreign banks it invited to participate in its bullion markets had better buy into its yuan-denominated benchmark fix this April or else they will be effectively banned from using their import licenses to bring gold into the mainland. Those banks are the Australia and New Zealand Banking Group, HSBC, and Standard Chartered.

The carnage thats taken place in the Chinese stock markets has been blamed in large part on its government policies to prop up and rig markets.

Its easy for Westerners to point fingers at the Chinese, but if what one former Federal Reserve policymaker recently said is true, the U.S. central banks post-crisis monetary engineering was just one big con game that artificially inflated the stock and bond markets.

What the Fed did, and I was part of that group, is we front-loaded a tremendous market rally starting in 2009, in March of 2009, ex-Dallas Fed chief Richard Fisher told CNBC on Tuesday. It was sort of what I call a reverse Wimpy factor: Give me two hamburgers today for one tomorrow. And Im not surprised that almost every single index you could look at, if you take away dividends in the S&P last year, unweighted goes down significantly. And all the other indices were down. In terms of the 10-year bond, there was almost no movement for the year.

Painful digestive period ahead: According to Fisher, the pain that U.S. markets are experiencing is not because of Chinas slowing economy and stock crash, but the withdrawal of Fed stimulus, which now is bringing on a major hangover. Basically, we had a tremendous rally and I think theres a great digestive period thats likely to take place now, and it may continue, because again, we front-loaded at the Federal Reserve an enormous rally in order to accomplish a wealth effect, he noted. So again, I wouldnt be surprised at whats happening. I wouldnt blame it on China; were always looking for excuses.

Overpriced market can correct: Fisher warned that the stock markets are overpriced and overdue for a correction, noting that numerous other analysts on CNBC have made the same observation. I was warning my colleagues, Dont go wobbly if we have a 10% to 20% correction at some point. The markets still overpriced. Everybody you talked to all morning long, from (Blackstone executive) Byron (Wien) on, have been warning that these markets are heavily priced. Were trading at 19 times earnings, were not having the kind of top-line growth we would like to have, were late in the cycle, things are richly priced. Theyre not cheap. They may not be overpriced any longer, but theyre certainly not cheap.

Investing pros are cautious: According to Fisher, who during his time at the Fed made headlines for owning the largest gold stake among his colleagues, he is seeing a lot of cautious positioning now among investment professionals. All of the managers that I talk to in my role at Barclays a lot of people are building cash positions. The long-only investors are being extremely cautious here. They raising their cash levels, are nervous about the valuations in the market. I could see significant downside; I could also see just a flat market for quite some time, again, digesting that enormous return the Fed engineered for almost six years.

Managers are turning to cash in order to prepare to buy assets cheaply if further crashes materialize. Moreover, cash is one of the only major asset classes that didnt sink in 2015. The only thing that really returned anything last year, again if you take away dividends, believe it or not was cash, at 0.1%. Thats a very unusual circumstance, he said.

Fed is now out of ammo: With the Fed now apparently tightening monetary policy and raising rates, true economic fundamentals will hold sway, and the results wont be pretty for many stocks that grew mainly because of central-bank infusions. The Federal Reserve is a giant weapon that has no ammunition left. What I do worry about is that it was the Fed, the Fed, the Fed. For half of my tenure, which was a decade there, everybody was looking for the Fed to float all boats. In my opinion, they got lazy. Now we go back to fundamental analysis, the kind of work that used to be done analyzing whether or not a company truly on its own is going to grow its bottom line and grow its shareholder value and price accordingly, and not just expect the tide to lift all boats. We are going to find out indeed, when the tide lifts, whos wearing a bathing seat and whos not. Markets should be working on their own animal spirits, but they were juiced up by the central banks, including the Federal Reserve.

While stocks still have to endure a stiff correction to return to their natural equilibrium, precious metals began their corrective slide in 2011 and have seemingly bottomed, with gold refusing to fall below $1,050. Now is the time to reallocate portfolios, shifting investment capital from overvalued stocks and into gold and silver before the latter resume their long-overdue ascent.

The U.S. Mints shattered record for sales of its silver American Eagle bullion coins was set on Dec. 15, at which point purchases to authorized wholesalers were halted. The all-time annual high for silver Eagles now stands at 47 million ounces, up almost 7% versus the 2014 record of more than 44 million.

However, sales of the Mints gold bullion coins to authorized purchasers continued through December (except for three denominations that had already sold out in November). Final sales figures are now in for these coins.

Sales of the Mints 2015 gold American Eagle coins hit 801,500 ounces last year. That marks a 52.8% increase over the 2014 sales total of 524,500 ounces.

The Mints other major gold bullion coin, the gold American Buffalo, also enjoyed a strong year. (This coin differs from the gold Eagle in that it is 99.99% gold, as opposed to the gold Eagle, which contains some copper in addition to its full ounce of gold.) The 220,500 ounces sold marked a 24.2% increase over the 177,500 sold in 2014. Last years total was the third-best annual sales performance since the Buffalos introduction in 2006, when 323,000 ounces were sold.

Now that its 2016, get ready for the Mint to roll out new versions of these three bullion coins along with its other offerings of modern proofs and collectibles. Stay tuned to Blanchard and Company for more information on when these 2016 issues will become available later this month.