Coin Market - Best Ever?

A guest article from NumisMedia

With over 45 years of numismatic expertise, we have no qualms about suggesting that this is the best coin market ever. Since the early 1960s, when most collectors visited and did the majority of their buying through their local coin shops, the coin market has transformed as dramatically as any industry can claim. Today, a major portion of collector (and dealer) purchasing activities are done over the Internet. Whether they are buying from retailers or auctions, websites are an enormous sales tool. From the 60s to now there certainly have been cycles where prices were higher for some individual coins, but never have we had the depth of buying power and interest that we enjoy today. While the metals spurred higher prices for gold and silver related coins during the rush of 1979 and 1980, once gold topped out at $850 in January of 1980, the coin market has become much more self-reliant. We cannot expect valuable coins to go up in price because of their metal content; but we can expect common silver or gold coins to increase as the metals rise – this is a bonus to numismatists.

If the metals continue to rise, the attraction will be widespread among everyone from neophytes to numismatists. Numismatics has become broad-based, but if we start adding even more reasons to collect coins it can spur the coin market to unheralded heights. We have seen many U.S. Gold coins rise dramatically over the last month alone as demand is bordering on being out of control. Not only has the FMV advanced for bullion related tens and twenties (common dates), but the premiums have widened as well. This is a certainty that demand is far ahead of current supplies. One caveat we must mention: this can reverse just as quickly. However, most gold analysts are confident that the overall upsurge is just a matter of time. So, while we may see some swings, the long run looks very positive for U.S. Gold.

In the past month, FMV has moved from $1,260 to $1,650 for MS65 Saints, up a little over 30%. Most of us can remember when these beauties were over $3,000 each, so the potential is there for a long run if the market receives added incentives such as inflationary news, increased oil prices, and any other dollar value reductions that may come along. The MS65 Saint is not the only example of this strong rush. We have a list below for you to contemplate. These are just some of the robust FMV increases over the last month:

One of the more interesting aspects of these numbers is the quantity of coins traded throughout the industry. We all know that MS65 Saints trade all the time, but how many MS65 $20 Libs are traded? There are not that many available; further, the only ones you see are the most common dates. Granted, we have FMV listed for the better dates, but when an accurately graded MS65 with a low census is traded, it usually commands above the current FMV. That is because the astute collector understands that there is additional value to the better date issues over the long run. A further comment on the $3 Gold as it continues to rise in all grades. This has become one of the more popular collector coins during the last year. It was not always this way. In past decades, it was considered more of a novelty by collectors and was one of the last coins to be acquired; and sometimes not even bothered with because nobody else cared. What a difference time makes with attitudes ever-changing. With this new popularity comes very strong demand to the point that we don't see that many coins being offered because they are not available. When dealers inventory $3 Gold they are immediately sold to their anxious customers.

The smaller denomination U.S. Gold coins are also receiving some attention, but mostly as fallout from the larger denominations. What some numismatists don't realize is that these smaller denomination coins may fall behind as tens and twenties rise due to the reaction of a rising gold market. However, this may well be where the bargains are for collectors. If you do agree with the analysts that predict higher gold prices, then the smaller denomination coins may languish while the spotlight is on tens and twenties. If this occurs, then the smaller coins will become more attractive to collectors since the potential will appear to be that much greater by comparison of past FMV relationships.

One of the major dealer complaints about today's coin market is that there are not enough coins in the marketplace for their customers. Not that there are not millions of coins available; we see thousands of them all the time at shows, in auctions, retail ads, just about anywhere there are dealers or collectors assembled. What they are saying is the coins their customers are demanding are the ones that are most difficult to acquire, either because they are not available or they continue to rise in price and the buyer is always a step behind rising FMV prices. But isn't this what makes the coin market as successful as it is today? Rising prices fuel activity and motivate increased sales, which in turn attracts new buyers and more sales. The more the economy plays into the hands of numismatics, the more attractive coin collecting becomes to the masses. Just wait until you see what a really hot market can do. Better yet, don't wait; get involved in the greatest collectibles market ever.

NumisMedia is the NGC Official Price Guide.

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