On “Top of the Market” for 2008

Posted on 1/24/2008

Early indicators suggest that 2008 could be a remarkable year for rare classic coins with low mintage and census numbers. Numismedia offers advice on how to make the most of this opportunity.

The past year has seen a very active market for the majority of numismatic coins. This year could prove to be even more remarkable, especially for rare classic coins that have low mintage and census numbers. We have monitored a number of coins that have increased in value substantially over this one-year period. Some of these coins had not appeared on the market for some time. In other examples, the current demand has simply forced the FMV to much higher levels. When making comparisons of FMV data, make sure you also compare the census reports from both timeframes as well to determine the increase in the number of coins certified for a specific grade. Below is a list of various issues that have increased substantially since the beginning of 2007.

Denomination – Grade    Jan 2007    Jan 2008
1796 Bust Quarter MS64       $104,000      $125,450
1804 Bust Quarter MS63    $78,130   $113,750
1794 Flow Hair Half Dollar AU53    $73,130   $91,880
1796 Bust Half Dol 15 Stars MS63   $293,750   $350,000
1796 $2 ½ Gold No Stars AU58   $146,880   $191,880
1825 $2 ½ Gold MS63   $38,030   $63,050
1848 $2 ½ Gold CAL. MS60   $43,750   $71,880
1880 Flowing Hair $4 PR60   $95,630   $137,500
1795 $5 Gold Sm Eagle MS65   $343,750   $500,000
1799 $5 Gold MS63   $43,130   $66,880
1796 $10 Gold AU50   $55,630    $71,880
1799 $10 Gold MS64   $97,500   $121,550

The common characteristic of these coins is that they are all rarities by original mintage and have a very low census in the grades listed. In fact, these particular issues have a very low availability in just about all grades. As long as the coins are accurately graded, there are buyers for these coins. The trend for early coinage should continue, since the demand for these coins in NGC and PCGS holders remains very strong. Bear in mind when pursuing any rare coins that they must be accurately graded. Some coins offered in auctions that are in grading service holders other than NGC or PCGS are seemingly rare, but have damage of some sort. These coins consistently bring discounts of the listed FMV and are typically purchased by collectors as “fillers” for their sets.

A new year always brings questions as to what will be the hot series in the coming months. Many dealers have stated that any of the coins minted prior to 1900 could play a very strong role in collector demand. Astute numismatists have made it quite obvious that they are looking for quality coins that are not found in every dealer inventory. When you start comparing the number of coins certified in most series prior to 1900, with those coins minted afterward, there is little reason for the newer coins to be valued at the same levels as the older ones, especially since there are fewer high-quality pre-1900 coins available.

In many cases, the reason that most of the more recent coins have been in such demand is the fact that they are available to market in large quantities. This is known as programmed marketing. In order to sufficiently advertise a specific series of coins, you must have a large enough inventory to sell to adequately absorb the cost of doing business and make a profit. It is quite difficult to advertise a limited number of rare coins and have them absorb all of the cost of marketing. This will typically make the price of the single coin appear too high to the normal buyer. However, advanced collectors are realizing that the slim number of coins available provides a very opportunistic timeline for acquiring coins that have potential. At the rate the coin market is advancing, the number of new collectors will soon deplete the current supply of pre-1900 coins based on relative value to post-1900 coins.

In the past year, the rarity of pre-1900 coins has become much more apparent to collectors and the demand has thrust the FMV to higher levels. Here again, we feel the need to stress accurate grading for coins to command current FMV levels. Advanced collectors do not want coins that exhibit any kind of problems, including distracting marks or color. Further, they will pay a premium if the coin has exceptional eye appeal for the grade. Most dealers feel that Bust and Seated coins will lead the market for 2008; this includes all copper, silver, and gold issues. Just in the last few months we have noted the FMV on the rise for Seated coinage in MS63 and higher. In some cases, the FMV has climbed 25 percent.

Also watch for programmed sales efforts for specific areas of the market. Morgan Dollars in MS64 through MS67 are always a good product for the high-volume retailers in the country. We have noted one of the major players currently in the market for MS65 Morgan Dollars and will take up to 1,000 coins. This is a good indication that they feel this area can make a concerted advance in the first six months of the year. Look for other areas like this where large quantities of very popular coins could be available for an extended marketing program. Walking Liberty Half Dollars are always good sellers and so are Peace Dollars, although they do run in streaks at various times. Classic Gold and Silver Commemoratives are very trendy and tend to run in cycles. We do not see a lot of interest in them at this time, except for individual collecting. However, when the time comes, these can move very quickly. If realistic opportunities are present, purchase coins that have eye appeal so that you can make “top of the market” profits. Watch for dealers stocking up on these issues and follow suit. Just be ready to sell into any of these markets when profits are substantial. Once the end is in sight, it is difficult to sell at higher levels. Remember in June 2006 when the MS65 Morgan Dollar FMV went well over the $200 level for common dates? Since the top of the market, they have not recovered. Is now the time?

This article is a guest article written by:
 
NumisMedia

The thoughts and opinions in the piece are those of their author and are not necessarily the thoughts of the Certified Collectibles Group.