It is not just that Gold and Silver are passing 20+ year highs, it is also important that there is an insurmountable confidence in the overall coin market at this time. Every day there are more collectors adding to the swarms of enthusiasts enamored with numismatics.
It is not just that Gold and Silver are passing 20+ year highs, it is also important
that there is an insurmountable confidence in the overall coin market at this time.
Every day there are more collectors adding to the swarms of enthusiasts enamored
with numismatics. First, you have to understand that it is not just about buying
coins and making a profit. If it was you would not see all the terrific books we
have on the history of coins informing us on how, why, what, when, where, and who.
Without someone like Q. David Bowers we would not have been able to generate the
passion we are seeing in today's collecting society. The generations that follow
us will have so much more technical information available that the collecting drive
will manifest itself into many different areas that we may not even recognize today.
Yes, it is nice to make profits in numismatics and we are sure that is what most
of today's collectors are driven to accomplish. Many of the new collectors are interested
in coins because of the mass marketing that is being done around the world, advocating
U.S. coins especially, as FMV prices continue to rise. The majority of these collectors
feel that prices can only go one way, and that is up. Don't be fooled, that is not
always the case and there will be some downturns or market corrections in most areas.
Supply and demand dictates market cycles.
What is most interesting at this time is that many astute dealers and collectors
are "going after" true rarities. This is the main reason we have seen
so many million dollar coins sell in the past two years. There are collectors who
have the ability to buy these rarities and put them away for their legacy. Further,
we are seeing some dealers with the cash reserves and knowledge to purchase any
and all known rarities that may have an FMV of $20,000 up to $500,000. These dealers
have been trying to purchase these coins and basically not having much success.
Why? Because there are very few of these coins actually available in the marketplace.
We are seeing massive increases in some of these issues because sellers are not
willing to part with the coins they have in their collections. There is something
to be said about a business where a collector can make tremendous profits, yet,
is not willing to sell these rarities because they have become so attached to them.
A further explanation of this holding pattern theory may well be that there is no
better place to put your money at this time.
Many of the rarities we refer to are early coinage around the 1800 era. First of
all, most of the coins in this timeframe began with low mintages. The survival rate
cuts down availability and then you have coins that simply lack eye appeal for the
grade. These kinds of coins require discounts of our FMV because they do not express
the most important rule in numismatics, "Buy me!" Without this precept,
a collector has no guidelines on when and how to purchase coins. Your own personal
set of rules is really what takes so long for some numismatists to develop. It is
not an overnight sensation. It actually takes some mistakes along the way to advance
to the hierarchy of numismatic ability. As a collector, if you think you are the
only one that makes errors in buying, you are sadly mistaken. Dealers have become
what they are through a long history of trial and error. Many have survived the
major adjustments in numismatic grading since the 1960s and we are here today with
a better marketplace which has been accepted by a majority of today's knowledgeable
Before we go any further, we would be remiss if we did not mention the metals and
where they are headed. Well, where are they headed? We are not sure, but we suspect
they are headed upward. They have already moved to levels we have not seen in over
20 years. Many analysts believe that there is a lot more room for advances, but
you as a dealer or collector have to be aware of this market whenever you are buying
or selling your coins. Make sure you know what the current market is before you
make any important transactions and commitments.
So, what are the early rarities that seem to be causing an FMV price shattering
war between potential buyers and not-too-interested sellers? Early Half Dollars
and Dollars from 1794 to 1803; throw in the Bust Quarters, especially the 1796 and
then discard the dates where there are way too many in dealer inventories. This
is kind of an oxymoron as there are not a lot of most of these dates anyway. However,
the buyers are actually looking more for the issues where the available population
may be fewer than five coins in a specific grade. When you consider the many collectors
of these early rarities you quickly realize that competition will ultimately force
these prices to levels where the actual number of competitive buyers is more compatible
with the available supplies. What are these FMV levels? It is difficult to say at
this time, but what we do know is dealers in this market are not locating enough
at current FMV levels to satisfy their aggressive buyers.
FMV levels for Early $5 and $10 Gold are increasing at an even more dramatic rate.
The Small Eagle Bust $5 has jumped about 10% since June of this year, with some
grades up as much as 20%. If you want more evidence of these advances the Early
$10 Gold issues are up as much as 50% over this same timeframe. All of the Capped
Bust $10s from 1795 to 1797 have advanced in all grades. The AU50 was $34,200 in
June and is now reported at an FMV of $48,130. The MS60 was $58,750 and currently
lists at $85,630. The Heraldic Eagle $10 is only up about 25% in AU50, but the MS60
has increased from $23,130 in June to its current $30,630, which is a little over
30%. The expression "it's a sellers market" comes to mind here in determining
how much is enough for some of these prices to rise. When sellers decide they have
made enough profits, then the advances will subside. However, as a seller, we will
reiterate, where do you put your excess profits?
Next month we will report on the overall market compared to last year.
is the NGC Official Price Guide.
This article is a guest article written by:
The thoughts and opinions in the piece are those of their author and are not necessarily
the thoughts of the Certified Collectibles Group.