Trump and Numismatics

The presidential election this year was certainly a raucous event and the eventual winner was very much unexpected by most. Regardless of your political leanings, the question on many collectors' minds is what does a Trump presidency mean for numismatics? Most had already factored in that Hillary Clinton would be our next president and that many of the Obama policies would continue. On election night, as Trump started to stack up electoral votes, the overseas stock markets dropped sharply. Markets generally hate surprises and this was a whopper!

Starting the next morning the stock market made a quick recovery. Since then the Dow Jones has risen over 1,000 points. The stock market clearly likes the idea of a Trump presidency. This is somewhat ironic considering the large support that Clinton received was from Wall Street. Precious metals also rose initially after the election results became apparent, but have since fallen precipitously. Gold and silver now stand at about $1,200 and $16.50 respectively. The markets seemed to have calmed down in recent days and will probably stabilize until it becomes clearer how Trump will govern.

What does this mean for rare coins and the hobby of numismatics? There is no doubt that Trump will be the most “business friendly” president in recent times. Most of his stated policies include less regulation and lower taxes. These business friendly proposals should be welcome news for the many well-heeled numismatic collectors. In the long run this should mean more money in the pockets of those who spend the most on rare coins. The so-called “wealth effect” means that people who feel good about their finances will spend more freely.

The immediate downside, however, is that the stock market seems to be stealing all of the thunder from those feeling better about their investment spending. That is the most quoted reason for the fall in precious metals. Investors in the United States and around the world seem to be selling hard assets so they can ride the wave of equity increases. How long this will last is anyone’s guess. Low interest rates are still a driver for investors seeking a decent return.

In the long run many of Trump's stated goals seem to indicate a possible dramatic jump in the deficit. Lower taxes and giant infrastructure spending could mean a substantial rise in the already stupendous national debt. Ultimately, this will be good for those invested in precious metals and other hard assets. How this all plays out over the long term is unpredictable in my opinion. Many individuals buy precious metals as an insurance against the unpredictable and this is likely to continue. As we all know, higher precious metals are a driver of the numismatic market. Prices for rare coins generally rise when gold and silver perform well.

Rare coin prices have been very depressed in the last few years. The biggest factor in recent price drops has been the oversupply of coins entering the market and not enough new collectors to absorb them. In the last 5 years there have been several giant coin collections liquidated to the highest bidder. The sales of the Gene Garner, Eric Newman and Brent Pogue collections are just a few of the notable collections sold. The Pogue collection sales are nearly completed and there are no new monster collections on deck to be sold. This should help to stabilize the market.

Prices for many rare coins are near the lowest points I have seen in my career. There has never been a better time to start assembling a set of any of the following:

Proof Sets:
Indian Cents
Liberty Nickels
Seated Dimes
Barber Dines
Seated Quarters
Barber Quarters
Seated Half Dollars
Barber Half Dollars
Seated Dollars
Morgan Dollars

Commemorative Gold and Silver:
Morgan Silver Dollars in all grades
Mercury Dimes
Standing Quarters
Walking Half Dollars

Branch Mint Gold:
Dahlonega
Charlotte
Carson City

Indian Quarter Eagles
Indian Half Eagles
Indian Eagles
Saint-Gaudens Double Eagles

These are just a few ideas and, regardless of how the Trump presidency plays out, rare coins seem poised for success in the next few years.

Questions about the rare coin market? Send them to wmr@ngccoin.com.

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