Panda coin expansion does not hinder appreciation; risks in modern and contemporary calligraphy and painting emerge. In 2011, the investment and collection market experienced a dramatic contrast between boom and bust. From gold and silver coin investments to calligraphy [bulk paintings] ceramics and miscellaneous auction markets, the first half of the year was very active, with individual items frequently setting new highs. However, entering the second half of the year, frequent negative news from external markets impacted the art market, leading to an adjustment. Auction companies lowered their estimates for auction items to avoid the cold wave. Modern Chinese calligraphy, especially contemporary calligraphy, however, shone brightly. Although the overall increase in the art investment market in 2011 narrowed somewhat, there were still numerous works worth tens of millions.
The Libyan conflict pushed gold (1567.00, +26.10, +1.69%) to record highs, rising from $1,400 per ounce at the beginning of the year to $1,900 per ounce before falling back to less than $1,600 per ounce now. Influenced by the volatile international prices of gold and silver, the domestic market for gold and silver coins also fluctuated. The most representative variety is the Panda Gold and Silver Commemorative Coin.
In addition, from diamonds to jade, all have experienced a round of speculation within the year. Truly fitting the saying "you sing and I act," the market's speculative targets in jade took turns appearing. Taking the newly emerged Taishan jade as an example, although players are concentrated in Zhejiang, Guangdong, and other areas, with little fame in the north, its price increase of dozens of times within the year was indeed astonishing.
Interviews with multiple industry insiders revealed that the current investment market has accumulated a certain amount of risk. Various previously speculated investment varieties face adjustments, which can be seen from the performance of the autumn auction market in 2011. The main reason is due to changes in the overall market environment.
**Investment · Jade**
**Jade Prices Soar Over Ten Million**
If one were to ask what the most frenzied investment item in 2011 was, stones would certainly top the list.
First up is the extremely valuable diamond. A rough estimate shows that since 2011, the rise in diamond prices has been conservatively estimated at over 30%, far exceeding the average annual increase. In the first quarter of 2011, diamond prices even saw weekly increases. Industry insiders stated that China has already become the world's second-largest diamond consumer. Observing diamond prices over recent years, they have steadily grown at an annual rate of 10%, with almost no significant declines. Data from investment banks also show that in the first half of 2011, the overall demand for diamonds by jewelry retailers increased by 10-15%. It is generally expected that future demand for diamonds will continue to grow.
The reasons for such a sharp rise in diamond prices include factors such as limited production, fewer external factors affecting price fluctuations, and speculative funds not yet entering on a large scale.
Next, let’s look at jade. Due to its dual functions as both a collectible and decorative item, jade has long been a popular item among collectors. From Hetian jade to Tianhuang stone, from Yangzhiju jade to Shoushan stone and Taishan jade, various types of jade have been continuously hyped up by the market. According to data from Beijing Poly Auction, jade jewelry sold for 157 million yuan during the autumn auctions in 2011, with all four pieces selling for more than ten million yuan being jadeite products.
"In 2011, the hot speculation in jade was largely due to excessive capital in the market but a lack of appropriate investment channels. Some financially capable players had stockpiled certain types of jade, driving up market prices before cashing out at high prices. Now, investing in jade has accumulated a certain amount of risk. For ordinary players who are not experts, it is essential to proceed cautiously, communicate more with experts, observe more, think more, and act less." Investment expert Li Xujie told reporters.
In his view, future investment in jade will increasingly diverge in price. High-quality items like Tianhuang stone and Yangzhiju jade will continue to appreciate in value, as these mineral resources are non-renewable. Items with fewer players and average quality may be neglected or even eliminated.
**Investment · Auctions**
**Calligraphy Becomes the Mainstay of Auctions**
Although the auction market in 2011 cooled down slightly compared to 2010, judging from the results, the auction market's intensity remains significant.
Looking at the spring auctions, many auction houses set new records for single-season sales, with items priced over 100 million yuan becoming common. According to statistics, in the first half of 2011, 219 domestic auction houses achieved a total turnover of 42.842 billion yuan, representing an increase of 112.71% compared to the spring auctions of 2010 and 15.13% compared to the autumn auctions of 2010. The number of high-priced items also reached a historical peak. Among them, Chinese calligraphy accounted for nearly 60% of the total turnover in the spring auctions, with Qi Baishi's "Pine and Cypress Standing Tall Picture · Seal Script Four-Character Couplet" selling for 425.5 million yuan, setting a new world auction record for modern and contemporary calligraphy.
However, in the second half of 2011, influenced by the European debt crisis and the U.S. debt crisis, the overall market environment changed, and the autumn auctions entered an adjustment phase. According to information from auction houses, the major autumn auctions for art in 2011 have basically concluded. However, from the sales situation, several major domestic auction houses showed varying degrees of shrinkage in their turnover.
"After breaking records in the spring auctions, the heat in the autumn auctions clearly decreased. Despite the continued strong sales of porcelain and calligraphy, many items failed to sell. While this cannot definitively indicate a turning point in the auction market, it does reveal certain risks." An insider told reporters.
Generally speaking, based on the sales situation of the autumn auctions, predictions can be made about the next year's investment market. Multiple industry insiders expressed that the market itself needs adjustments, so observation should come first.
Additionally, some auction houses are already planning their New Year's auctions for 2012. Beijing Poly announced that from January 7th to 10th, there will be a special auction, as the first auction of 2012, featuring mainly calligraphy, antiques, and rare wines.
**Investment · Precious Metals**
**Panda Coins Reign Supreme Despite Increased Issuance**
The Panda coins rank alongside the American Eagle, Canadian Maple Leaf, South African Krugerrand, and Australian Kangaroo as one of the world's five major investment coins. Since the first issuance of the Panda gold and silver coins to the market in 1982, 2011 marked the 30th anniversary.
Taking the complete set of Panda gold coins issued in 2011 as an example, when issued in December 2010, the price was only 18,000 yuan. As international gold prices climbed to $1,900 per ounce, the set of Panda coins rose to 26,800 yuan. Although prices have recently adjusted downwards, secondary market prices remain around 25,000 yuan.
It is understood that the 2012 edition of the Panda gold and silver coins has already begun issuance. This commemorative coin set includes 10 coins, seven of which are gold coins and three are silver coins. Comparing with the 2011 version, the majority of the specifications of the 2012 issue have increased in quantity. For instance, the 1/20-ounce gold coin and the 1/10-ounce gold coin increased from 600,000 to 800,000 units, the 1-ounce gold coin from 500,000 to 600,000 units, and the 1-ounce silver coin from 6 million to 8 million units.
If we sum up the issuance volume of the 2012 Panda gold and silver coins, the maximum issuance total is approximately 11.4755 million units. When the Panda gold and silver coins were first issued to the market in 1982, the total issuance volume was only 14,425 units. Over 30 years, the issuance volume has increased nearly 800 times, reflecting investors' enthusiasm for Panda gold and silver coins.
Miao Desheng, director of the China Gold Coin Collection Network, told reporters that the price of Panda gold and silver coins is mainly constrained by the trend of international gold and silver prices, with the lowest premium among all types of gold and silver coins, and few other factors influencing their trends. Although Panda coins closer to the raw material prices of gold and silver are more worthwhile for investment, if investors predict that the international gold and silver prices have bottomed out and will continue to rise, then the Panda coin market still has room for growth. If it is judged that international gold and silver prices will fall by more than 10% in the future, then observation should be prioritized.
Since late September 2011, international gold and silver prices have entered an adjustment period, with an overall decline of about 30%. Although after such a decline, the fine specimens among gold and silver coins present investment value, due to the poor overall market environment, the expansion of domestic gold and silver coin issuance, and changes in market supply and demand relationships, the trend of Panda gold and silver coins will be affected, and investment should remain cautious.
By Gao Heping
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