Coin Market Update
Coin Market Update (2/14/21)
Overview:
Bullion – Spot silver prices have been higher recently, helped by the “Robinhood” attempt to corner the silver market. Silver bullion coins and bars sell for unusually large premiums over spot price – if they can be found at all. Spot gold prices have not been nearly as strong. Nevertheless, demand for generic gold coins and gold bullion coins has been steady and resulted in some premium increases and a tighter physical market.
Rare/Collector Coins – According to the PCGS 3000 Index, coin prices dropped about 20% over the decade ending in 2020 but have recovered about 2% over the last year. We’re seeing stronger prices across the board. For whatever reasons, pandemics appear to be positive for coins.
Trends in the Coin Market:
Here’s what we’re seeing in the coin market:
· Many coin shows have been cancelled during the past year due to COVID. But those that happened have been surprisingly strong for both wholesale and retail business. Some have even been described as a “feeding frenzy”.
· With prices starting to rise, most dealers are faring better. Dealer profits tend to be reinvested into more coin inventory helping push up prices. This is the opposite of what has been happening over the past decade when dealers were minimizing inventories.
· The big are getting bigger, with particular growth among large national dealers who have well developed online sales platforms, deep pockets, and strong advertising budgets.
· Traditional collectors, many of whom are older, continue to wane in influence. At the same time, there is an encouraging influx of younger dealers and collectors. The number of females is increasing as well. Many of them are internet and social media savvy, and will help carry the hobby into the future.
· Finding and buying really attractive coins (especially those with CAC stickers) is somewhere between difficult and impossible. These are the coins people are putting away for the long-term. The price differential between low-end and high-end PCGS/NGC coins certified in a given grade is huge.
· “Gradeflation” at the grading services has slowed considerably but not stopped. There’s too much money being made by the grading services and crack-out artists for this to stop.
· Younger coin buffs are bidding up prices on high grade modern coins, especially those in MS70 and PR70 holders.
· World coins and currency as well as ancients are doing better than the more mature US coin and currency markets. The rest of the world seems to be catching on to the joy of our hobby.
· The amount of pricing information available is overwhelming and sometimes misleading. This is further complicated by the huge range of quality among coins graded at the same level by the grading services. It’s hard work to price coins and everyone seems to think they are an expert.
Let’s hope the positive momentum continues. Our advice: take your time, choose carefully, stick with quality and rarity, and hold for the long run.
(8/11/20)
Overview:
So far 2020 has been a wild year in many ways. In the world of coins, it’s been a surprisingly good year even with most coin shows being cancelled due to COVID. Online and phone retail sales along with dealer demand have been strong, and rising precious metals prices have put a floor under the prices of many coins.
Bullion – with rising gold and silver prices, all bullion and generic coins (common date gold and silver coins that trade primarily on their metal value) have done very well across the board. The current problem is availability. With mints shutting down and commerce slowed by COVID, there is a shortage of some gold and silver bullion products and premiums over melt value are higher than in 2019.
Rare/Collector Coins – Most collector coins have been soft for a number of years, but they are starting to find their footing. Time will tell whether things have turned for the better. The rare and high dollar (over $15,000 or so) coin market has been stronger in some cases, but still not immune to some price softness. Quality continues to rule with ever increasing price disparities between really nice coins and off-quality coins of the same grade. Many of the most attractive coins and CAC-stickered coins have been saved by savvy collectors/investors and will be off the market for years.
How do High Gold and Silver Prices Affect Rare Coin Prices?
The market for gold/silver bullion and the market for rare coins are very different, but they can be related. This has been particularly true since March of this year, with gold and silver prices rising sharply. Positive effects on rare/numismatic coins include:
- The numismatic value of many gold and silver coins has been surpassed by the value of the gold and silver they contain, driving up their prices. This has provided an opportunity to profit on coins that had been stagnant in price for some time.
- A portion of people who buy gold and silver bullion while it is popular will eventually find their way into rare/collector coins. This happened during the last gold/silver bull market in 2010-11.
- Bullion sales provide profits for coin dealers/collectors, who frequently reinvest their income in rare/collector coins. Much of the “float” in available coins resides with dealers and when they stock up it can move prices quickly.
While it usually takes a little time before the full effect is felt, rising prices for precious metals are definitely positive for rare/collector coins. Time will tell just how positive it is this time.
(2/6/20)
Overview:
Bullion – Spot gold prices are up about 20% over the past year and spot silver is up about 12%. Platinum prices are higher and palladium prices have exploded up. That is good for the overall coin market as it sets a price floor under coins made of precious metals, and brings money into the numismatic market. Premiums over melt value are still historically low, so many interesting coins (including pre-1933 gold $5’s, $10, and especially $20’s) can be purchased for their metal value.
Rare/Numismatic Coins - The January FUN show in Orlando usually serves as an indicator of the health of the coin market. This year’s FUN show was more active. Hopefully, that bodes well for the future. The market is two-tiered with lower cost “collector” coins in a soft market and rare/high priced material doing better. The price difference continues to widen between attractive coins and less attractive coins certified in the same grade. Quality and rarity are much in demand.
Fun and Interesting Ways to Collect U.S. Gold:
- Type Sets: By far the most popular is the 12 Coin Type Set, consisting of: Type 1 $1 (1849-1854), Type 2 $1 (1854-1856), Type 3 $1 (1856-1889), Liberty $2.50 (1840-1907), Indian $2.50 (1908-1929), Indian Princess $3 (1854-1889), Liberty $5 (1839-1908), Indian $5 (1908-1929), Liberty $10 (1838-1907), Indian $10 (1907-1933), Liberty $20 (1850-1907), and St. Gaudens $20 (1907-1933). For the 16 Coin Type Set add: Liberty $5 No Motto (1839-1866), Liberty $10 No Motto (1838-1866), Type 1 Liberty $20 (1850-1866), and Type 2 Liberty $20 (1866-1876). For the 18 Coin Type Set add: $2.50 Classic Head (1834-1839), $5 Classic Head (1834-1838).
- Mint Marks: Collect an example of each of the seven mint marks represented on US gold coins: Charlotte (C), Carson City (CC), Dahlonega (D), Denver (D), New Orleans (O), Philadelphia (no mintmark), and San Francisco (S). Or become a dedicated collector of one mint mark, as many do with Carson City coins.
- Complete Sets: Among all circulating US gold series, the most affordable by far is the 15-coin $2.50 Indian set. Depending on grade, it can be assembled for $12,000 or less. A few other US series can be completed but only with a six or seven figure budget.
- Specialty Sets: Various pioneer gold collections can be assembled from privately minted Georgia, North Carolina, California, Utah (Mormon), Alaska, and Colorado gold. Costs are generally high, with the exception of Fractional Gold which is quite affordable (including Kansas Fractional Gold). Other sets: Classic Commemorative Gold (1903-1926) consisting of 11 coins (plus two $50 Pan Pac if your budget allows); 33 coin set of $5 Modern Commemorative Gold (1982-2019); 7 coin set of $10 modern commemoratives (1984-2003).
- Bullion Coins: Uncirculated 1 oz. examples of Gold American Eagles (1986-Current) dated most years can be purchased for $50-80 over spot gold; proof 1 oz. examples cost $50-100 over spot gold. Fractional Gold American Eagles (1/10, ¼, ½ oz) carry higher premiums. Uncirculated 1 oz. Gold American Buffaloes (2006-Current) trade for $40-80 over spot gold.
- World Gold: There are many possibilities here including modern, ancient, and bullion coins. My favorite is gold coins that circulated in the US from colonial times until 1857 (Spanish, English, French, other). Be careful not to overpay on these and do your homework.
(2/8/19)
Overview:
Bullion – Spot gold and silver seem to have turned the corner and have been trending steadily upward over the last few months. That is good for the overall coin market as it sets a price floor under coins made of precious metals, and brings money into the numismatic market. Retail demand for bullion coins (including generic pre-1933 US gold and pre-1965 90% silver) has increased, but premiums over melt value are still historically low.
Rare/Collector Coins – The January FUN show in Orlando usually serves as an indicator of the health of the (2/8/19coin market. This year’s FUN show was more active both for pre-show trading and on the show floor. Hopefully, that bodes well for the future. The market is still two-tiered with lower cost collector coins in a soft market and rare/high priced material doing better. Encouragingly, there seem to be more young people and ladies involved in the business.
Heir on the Safe Side:
A bit of a pun maybe, but we deal with a lot of heirs who find themselves owning collections they have no idea what to do with. We are pleased to help in such situations, but a little preparation by the owner who passed could have reduced this stress for their heirs. And in some cases, it can prevent them from costly mistakes. Here are a few steps to consider if you own coins:
- Don’t overlook your coins when creating your estate plan. If you’ve been collecting for some years, the value of the collection may be more than you realize.
- Keep good records, including a list of your coins, their values and where they are stored. An appraisal is helpful if available.
- Talk with your heirs about whether they want to inherit your collection and if they know what to do with it, whether they keep it or not. If they really don’t want the coins, consider selling them or at least reducing the collection to a few favorite coins.
- Written instructions can be a blessing, especially during the stressful time of dealing with a loved one’s death. Names of long-time advisors, trusted coin dealers, or a knowledgeable collector friend can be a great starting point.
- If your coins are not certified, consider submitting some of the more valuable ones. Most heirs are unfamiliar with grading or the certification process. With coins certified by a reputable service, at least they can look up the approximate value in a price guide.
- Make every effort to steer your collection into the hands of someone who will appreciate and enjoy it as much as you have.
Studying and collecting coins is a highly pleasurable pursuit. Be sure to keep it from becoming a burden for your loved ones,
(10/3/18)
Overview:
Bullion – Spot gold and silver have been trending steady to down, taking bullion coins lower with them. Retail demand for both has slowed and premiums have shrunk. Many generic (common, lower grade) pre-1933 US gold coins are selling for close to spot gold price, making them attractive as a bullion alternative.
Rare/Collector Coins – High end coins ($10,000+ coins) have held their own, but most collector coins and coins under $10,000 have continued to show softness. There are a lot of collections coming on the market and not many new collectors/investors to buy them. We attended the ANA show in Philadelphia and prices were sluggish. At some point, prices will turn back up but it hasn’t happened yet.
Thoughts on Third-Party Grading:
It seems that no one is happy with the poor third-party grading services (TPGs). Having just read another highly critical article, it seemed timely for me to add my opinions to the debate (then duck and cover).
- Overall, the TPGs have been very good for the industry. Their certification provides considerable protection for market participants, especially those with limited grading and/or authentication skills. There was way too much deception going on before TPGs.
- The market has shown the most confidence in PCGS and NGC, with ANACS and ICG also receiving respect. The many unreliable “third world” graders from the early days of certification have pretty much washed out of the market. Thankfully.
- They’re not infallible. But given the subjective nature of coin grading, TPGs do a pretty good job. In spite of all the griping, PCGS and NGC grade with much more consistency than the average dealer or collector.
- The system has become way too complex, especially with the use of all 11 uncirculated grades and plus grades. Nobody is that good. But it generates a lot of crack-outs and profits for TPGs.
- Inevitably, a lot of garbage has accumulated in holders. Who would crack out a cleaned or over-graded coin? Only nicer coins get cracked out, sometimes doctored, and resubmitted over and over until they reach the next higher grade. Then they are dogs at the next grade up. Ever wonder why 90% of the coins at a show or auction are unexciting? Many of the really attractive coins are in someone’s safe deposit box and not coming out any time soon.
- “Gradeflation” has slowed considerably, but it won’t go away. Everyone from dealers to collectors to TPGs have an economic interest in this continuing.
- CAC has been a great concept, and the market has justly rewarded CAC-stickered coins with sizeable price premiums. In most cases, CAC stickered coins really are the nicer coins for the grade. The CAC concept has also saved some coins from attempts to crack out and doctor them.
- Unfortunately, novices put way too much faith in the TPG holders. There’s too much variation in quality amongst certified coins to do this. An experienced dealer or seasoned collector can be a great ally in sorting through the chaff. A CAC sticker is also pretty reliable.
Our advice is to buy and enjoy coins you really like. Carefully preserve them for the next generation. Don’t be too impressed with grades on the plastic holding them. In the meantime, the best minds in our industry/hobby will continue to debate (and hopefully find) ways to assign grades more consistently.
(9/3/18)
Overview:
Bullion – Spot gold and silver have been trending down, taking bullion coins lower with them. Retail demand for both has slowed and premiums have shrunk. Many generic (common, lower grade) pre-1933 US gold coins are selling for close to spot gold price, making them attractive as a bullion alternative.
Rare/Collector Coins – High end coins ($10,000+ coins) have held their own, but most collector coins and coins under $10,000 have continued to show softness. There are a lot of collections coming on the market and not many new collectors/investors to buy them. We just attended the ANA show in Philadelphia and prices were sluggish. At some point, prices will turn back up but it hasn’t happened yet.
Thoughts on Third-Party Grading:
It seems that no one is happy with the poor third-party grading services (TPGs). Having just read another highly critical article, it seemed timely for me to add my opinions to the debate (then duck and cover).
· Overall, the TPGs have been very good for the industry. Their certification provides considerable protection for market participants, especially those with limited grading and/or authentication skills. There was way too much deception going on before TPGs.
· The market has shown the most confidence in PCGS and NGC, with ANACS and ICG also receiving respect. The many unreliable “third world” graders from the early days of certification have pretty much washed out of the market. Thankfully.
· They’re not infallible. But given the subjective nature of coin grading, TPGs do a pretty good job. In spite of all the griping, PCGS and NGC grade with much more consistency than the average dealer or collector.
· The system has become way too complex, especially with the use of all 11 uncirculated grades and plus grades. Nobody is that good. But it generates a lot of crack-outs and profits for TPGs.
· Inevitably, a lot of garbage has accumulated in holders. Who would crack out a cleaned or over-graded coin? Only nicer coins get cracked out, sometimes doctored, and resubmitted over and over until they reach the next higher grade. Then they are dogs at the next grade up. Ever wonder why 90% of the coins at a show or auction are unexciting? Many of the really attractive coins are in someone’s safe deposit box and not coming out any time soon.
· “Gradeflation” has slowed considerably, but it won’t go away. Everyone from dealers to collectors to TPGs have an economic interest in this continuing.
· CAC has been a great concept, and the market has justly rewarded CAC-stickered coins with sizeable price premiums. In most cases, CAC stickered coins really are the nicer coins for the grade. The CAC concept has also saved some coins from attempts to crack out and doctor them.
· Unfortunately, novices put way too much faith in the TPG holders. There’s too much variation in quality amongst certified coins to do this. An experienced dealer or seasoned collector can be a great ally in sorting through the chaff. A CAC sticker is also pretty reliable.
Our advice is to buy and enjoy coins you really like. Carefully preserve them for the next generation. Don’t be too impressed with grades on the plastic holding them. In the meantime, the best minds in our industry/hobby will continue to debate (and hopefully find) ways to assign grades more consistently.