Ten Numismatic Predictions for 2013
Posted on 12/20/2012
2012 was a great year for numismatics. The market remained solid and most dealers and collectors experienced a profitable year. Let’s do a quick review of my predictions for 2012 that I gave last December before I give my predictions for 2013.
- Gold and silver prices will be higher at the end of 2012.
- New price records will be set in 2012.
- Blockbuster auctions of famous collections will be announced in 2012.
- High grade generic gold coins will be discovered as greatly undervalued.
- Several major coin shows will struggle for survival.
- Modern coin collecting will increase in 2012.
- World coins will soar in value in 2012.
- Previously common ancient coins will increase sharply in price.
- The United States Mint will continue to frustrate collectors.
- Numismatic crimes will increase in 2012.
Gold began the year around $1,600 per ounce and silver was about $28 per ounce. Both will probably end the year higher! Gold is trading around $1,700 per ounce at the moment. Prices did not soar, but precious metals outperformed many other investments.
Although no coins broke the current auction record for a single coin (about $7 million), many individual coins saw new records when they crossed the auction block. Just one example is the incredible 1871–CC Double Eagle graded NGC MS 64 that sold for $322,000. Great coins continue to bring great prices! Maybe the individual price record will be broken next year.
I might have missed this one by a year. There were no famous name collections sold in 2012 along the lines of Pittman or Norweb. There were some nice collections sold, but no blockbusters. Stack’s Bowers has announced a big sale in January that could be classified as a blockbuster. I will probably review this sale sometime in February. I still think there is great collection out there waiting to be sold!
High grade generic gold coins did increase in price, but not by as much as I had anticipated. I think this area of the market is still a great buy. MS 65 Saint–Gaudens Double Eagles are now at the lowest premium to MS 64 ever!
The ANA announced that they will be dropping its fall convention. The shows were a modest success, but did not justify the time and effort. Other shows are making progress, and this prediction was not totally accurate. I love coin shows and hope they figure out how to remain relevant in our industry.
I think it is safe to say that this prediction proved to be accurate. More people collect modern coins than ever before. Several new books were published on this part of the market, and there will probably be more coming out next year. Whitman just put the finishing touches on the 2nd Edition of the 100 Greatest U.S. Modern Coins. Look for this trend to continue.
This prediction was very accurate. Price records are set nearly every week when some great world coin crosses the auction block. The sale of the ANS collection of Spanish coins for over $25 million helped stimulate the market as well. Hopefully someone will come up with a better way to gauge this market. Most would be astounded!
This is definitely true for 2012. I deal with mass-market ancient coins quite often, and I can promise you that the supply of fresh material is at an all time low. Coins that used to cost $500 are now selling for over $1,000 when you can find them.
This is a pretty easy call, as the United States Mint has been frustrating collectors for years. Just read any issue of Coin World and check out the letters to the editor. The United States Mint is the largest coin dealer in the world, but unfortunately acts like they have a monopoly. Maybe next year will be different—not!
This is the one prediction that I should have followed my own advice on much more carefully! My office was robbed in the fall, and the loss was greater than it should have been. I had recommended everyone to “tighten their ship.” Well, mines tight now, but a day late and quite a few dollars short. This prediction will unfortunately prove true in 2013. The bad guys are being much more brazen and desperate. Please be careful with your numismatic collectibles. Being the victim of a robbery is a terrible experience!
TEN NUMISMATIC PREDICTIONS FOR 2013
- Gold and silver prices will continue in a narrow trading range.
- There will be a major numismatic discovery in 2013.
- The rare coin market will focus more on quality in 2013.
- There will be a tremendous increase in the use of mobile devices in the numismatic industry.
- Cyber crime will discover the coin business.
- The American Numismatic Association will become more relevant next year.
- World coins will continue to outpace other parts of the numismatic market.
- Silver Eagles will become even more popular in 2013.
- Auction records will become more important when trying to value rare coins.
- Taxes will become a major issue for the numismatic industry.
This is a departure from last year’s prediction of increased prices. Obama won the election and most fear a continuation of massive deficits by the federal government. We are now hanging on every word out of Washington about the “fiscal cliff.” Despite the dire predictions of many gold and silver pundits, I believe precious metal prices will continue to trade near current prices for most of the year. There will be swings of course, but I do not believe we will see new highs anytime this year. My reasoning is that gold and silver prices have soared in recent years and have priced in most of the bad fiscal news. Unless the United States makes a major stumble, or if there are disruptive world headline events, the precious metals markets will remain quiet.
Recently the Bank of Canada announced that they possessed a hoard of over 200,000 vintage gold coins from 1913, 1914 and 1915. Who would have believed that such a hoard existed? I believe that there will be similar discoveries in 2013. Our friends at Odyssey Marine have been quiet lately and they are due for another discovery as well. Major discoveries are what I love most about rare coins. You never know what will show up and astound you!
In recent months I have seen a surge in demand for coins with great eye–appeal. Buyers are willing to throw out the price guides for coins they love. I recently consigned an 1884–O Morgan Dollar in NGC MS 64 to a Heritage sale. The coin has incredible rainbow toning on both sides. Average examples of the very common date sell for around $75. This beauty hammered for over $4,000! I believe this is very positive trend in our industry and is one that will continue to gain steam. Not every coin is created equal, and now the marketplace is rewarding coins of superior quality. Knowing the difference will be crucial in the future for successful dealers and collectors.
I am not an expert in the use of technology, but I know enough to get around the web and create an Excel or Word file. More and more I see people at conventions using mobile devices to look up prices, figure deals and keep track of inventory. My son, who is an up–and–coming 20–something, uses his iPad for everything. Heritage, NGC and several other large companies are busy creating apps for this new age of computing. I look for this trend to greatly increase next year.
Cyber crime is more and more in the news these days. Well organized criminals are attacking financial institutions, large corporations and even governments. There is a lot of money in the rare coins market that trades hands each year. I would not be surprised to see an attack on our industry. I would recommend anyone who does ecommerce to be very careful and more diligent next year. The same advice can be applied to retail customers. Beware of online fraud.
I have to confess that I have some inside knowledge on this subject. I currently serve on the board of governors and plan to run for Vice President next year. The ANA Board is very aware that it needs to make advances in technology and information to grow the organization. Substantial sums are being devoted to the ANA website. There are also plans to create more and better content to attract new members and to serve those we already have. Look for great things at the ANA next year!
I made this prediction for last year and it proved very true. The world coin market continues to expand and I believe this trend shows no signs of stopping. As the rest of the world grows wealthier, there will more and more buyers of quality world coins. Prices for great world coins still lag those of similar rarity United States coins. World coins will also benefit from advances in accessible information. Sometime soon there will probably be better data about the rarity and the history of popular world coins. This will increase demand.
There are currently thousands of people buying American Silver Eagles by date in MS 69, MS 70, PF 69 or PF 70. I believe this popular series will attract even more collectors. More and more information is being generated about Silver Eagles. Collectors are very interested in bullion as a hedge against inflation and Silver Eagles are fun to collect and have a high degree of “bullion play.” The coins are large and the series has been around long enough that a complete set is an impressive accomplishment. Anyone who has attempted an MS or PF 70 set can attest to the rarity and lack of availability of these popular coins.
This is a trend that began a few years ago and is becoming more prevalent. Auction records are becoming more accessible and are an important consideration when trying to establish the value of a rare coin. NGC now has this tool available on its website. Catalog prices are a very good tool, but knowing what someone actually paid for a coin creates a tremendous sense of security when making a purchase decision.
Just this week my accountant’s office was paid a visit by the California Sales Tax Commission. The audit was to review my rare coin sales at California coin shows despite the fact that coin sales above $1,500 are exempt from sales tax. The bottom line is that states are desperate for money and will continue to be so. States are lobbying hard to find a way to tax internet sales and this could have a profound impact on the rare coin business. This issue will probably end up in the Supreme Court. The Federal Government is also desperate for money and will probably eye the coin market for income as well. The rare coin market has been the beneficiary of free market forces for many years. It will be a painful change once this trend reverses and I expect it will.
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