Ten Numismatic Predictions for 2012

Around this time of the year many of the popular numismatic newsletters publish predictions for the upcoming year. The predictions range from amusing to extremely thought provoking. One of the reasons predictions are worth considering is the extensive experience and knowledge of some authors. Decades of dealing in the rare coin market gives a unique perspective that only experience provides. In my opinion, predicting the future requires an understanding of the past. This year I will take a shot at this popular form of fortune telling.

1. Gold and silver prices will be higher at the end of 2012.

   Gold and silver bullion prices will continue to be a prime driver of the rare coin market. Metal prices slipped considerably at years end, but still remained up over 10% for the year, outperforming the stock market. Much of the impact on rare coins is psychological and down markets do have an affect. The case for gold and silver is as strong as ever. Sovereign debt issues loom and very few nations have made any substantial changes to reduce deficits. Democrats and Republicans become locked in mortal combat over even the smallest attempts at reducing long-term spending. The biggest change to metal prices will be the increase of volatility. Hedge funds have discovered that they can move prices easily with the billions of dollars they have at their disposal. This will mean wild price swings. Gold and silver will remain a good long-term investment, but it might take plenty of courage to stand the ride!

2. New price records will be set in 2012.
   We have all read how trophy coins continue to set new records when offered for sale. Impressive price increases this will bring many of these prime rarities out of the wood work. Look for some amazing coins to find their way to market and then stun the world with the prices realized. The upcoming New York International sale of Ancient coins is a great example. Many of the coins being offered have been off the market for years if not decades. Rumor has it that the buying activity of one extremely wealthy Arab buyer has enticed several important collectors to put some of their most prized Ancient coins up for auction. Look for outstanding headlines after the January sales!
3. Blockbuster auctions of famous collections will be announced in 2012.

   Not only will some great individual rarities trade hands, I predict that several important collections will also cross the auction block. Many collectors dearly love their coins and are loath to sell any of them. However, prices such as those that have been seen recently will make them think twice. Some great collections have been formed over the last 50 years and many of the collectors will strongly consider taking advantage of the current price boom for great coins. Look for some name sales to be announced in 2012.

4. High grade generic gold coins will be discovered as greatly undervalued.

   The premiums for United States gold coins are at the lowest I have seen in my 35 years as a professional numismatist. There are many reasons for this and I have explained the situation in a few of my past articles. I think that average and lower grade coins will continue to trade at discounted premiums. Currently the supply simply overwhelms demand. The situation is much different, however, for high grade generic gold. There is not an oversupply and there never has been. Even a small increase in demand will see prices soar. Check price guides from a few years ago and you will be astounded to see that many MS 64 and MS 65 or better gold coins trade for half of current prices. This was when gold traded well below $1,000. I think high grade gold coins are the chip shot investment for 2012!

5. Several coin shows will struggle for survival.

   There are currently too many major coin shows for all of them to be well attended. With the internet now giving collectors access to the inventory of most rare coin dealers, there will be a greater reluctance for many to travel to coin shows. Another problem is that many of the most active coin dealers in the country are starting to age and travel is becoming much less appealing. I count myself in this group and many of my close associates feel the same. Traveling all day coast-to-coast to a coin show and then taking the red eye home is no longer an option. Great coin shows that are well run still bring out the crowds and are well attended. Look for the marginal events to suffer and a few will probably disappear in 2012.

6. Modern coin collecting will increase in 2012.

   Modern coin collecting will gain significant ground in 2012 for several reasons. The most important driving factor will be increased information and collecting tools for the modern coin market. I believe more books will be published on the subject and more and more information will become available on the internet. Collectors love information and I fully expect this need to be met. There will also be several new players enter the market and that will have an impact on prices and market promotion. Lower prices might hurt some of the current players in this market niche, but collectors will be the beneficiary of this trend. In keeping with my second prediction, several modern coin sales will be announced in 2012 at incredible prices. This will further stimulate the modern coin market. The 25th Anniversary Silver Eagles will also provide more attention to modern coin collecting, particularly the silver eagle series, which has become one of the most collected United States issues.

7. World coins will soar in value in 2012.

   For decades world coins of similar rarity and condition have lagged in price far behind those of the United States. The US market is larger and much more developed. There is infinitely more literature and information available for collectors of every denomination or series. Also, much of the world’s wealth has been concentrated in the United States. These trends are beginning to change with booming economies in Asia and other developing countries. I predict that many publishers will recognize the need for more in depth information and data on World coins. NGC now offers more content on World coins than ever before. For years third-party grading was shunned by many World coin collectors. Today, most of the important coins sold have been certified. I also expect registry set collecting to really catch on with World coins, and see high grade coins set new price records. Investors and collectors better catch this train soon before it leaves the station!

8. Previously common ancient coins will increase sharply in price.

   For years American collectors have been able to purchase interesting and historical Ancient coins for a nominal cost. Widows mites (an early Jewish bronze coin) could be bought for under $10. Historically important silver coins of Alexander the Great sold for less than $200 each. In the last few years the supplies of these coins entering the United States has dropped sharply. Fewer are being found and increased demand around the globe has meant far less coins for American collectors. Further price pressure will also be caused by pending import restrictions. Unless something is done to reverse the rising tide of restrictions, American collectors will be denied access to an ever smaller number of coins that come to market. In my opinion Ancient coins have been underpriced for years. Look for this to change in 2012.

9. The United States Mint will continue to frustrate collectors.

   This is probably the safest call for 2012. The United States Mint continues to misjudge the market for its products and provide dismal service to its customers. The 2011 Silver Eagle 25th Anniversary Sets are a prime example of the Mint’s current management. They grossly underestimated demand, they frustrated those who tried to buy the sets, and they left millions of dollars on the table by charging only $300 per set. The Mint’s website was incredibly slow and is obviously outdated. Shortly after this fiasco they announced plans to spend over $100 million dollars to solve the problem with a British company. Not a very popular choice at a time when the United States has record unemployment. Finally, when the sets I ordered arrived they were sent by UPS. This is at a time when the United States Postal Service is facing insolvency. I’m sure the United States Mint is not interested in my opinion, but I would suggest an advisory board of dealers and collectors to give them guidance and help them avoid the predicaments they constantly find themselves in.

10. Numismatic crimes will increase in 2012.

    I hate to end my predictions for 2012 on such a negative note of caution. With the US economy on the rocks and with more and more individuals finding themselves in desperate situations, numismatic crimes will probably increase this year. Gold and silver prices are almost constantly in the news these days. Dealers around the country run full page ads touting the sharp increase of prices and the need for you to sell. Dealers and collectors should really tighten the ship when it comes to security. Your safety is the first concern and no one should keep numismatic material in their homes. More than a few dealers have decided to arm themselves just in case. Now is the time to check your insurance coverage and be as careful as possible. I hope this is the one prediction that does not become true!

Jeff Garrett bio