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Is Rare Coin Market Hot? Cold? Or?
By Patrick A. Heller
December 03, 2013

The latest sales of the Eric Newman collection realized $23 million, bringing total numismatic auction sales for November to more than $38 million. Wow! The rare coin market sure must be hot!

On the other hand, I have talked with a number of dealers in the past several weeks who have told me that their volume is down 20 to 30 percent year-to-date compared to 2012 results. Is the rare coin market in a downtrend?

The correct answers are both – and neither.

At the same time that record prices are being paid for works of art and other collectibles, trophy rare coins are also selling for record high levels. A 1794 silver dollar sold for more than $10 million in January, for example. Many other top-quality ultimate rarities also sold for record high prices for the issue. A high percentage of these trophy collectibles are being bought by the extremely wealthy, some of whom have attained that status just within the past decade. The number of billionaires and centi-millionaires around the globe is soaring. Therefore, it is easy to realize that the top end of the numismatic market is now strong.

Toward the other end, you have the bread and butter collectors, many who started their collections by sorting through the change in their pocket and filling holes in coin folders and albums. Many of the coins they seek cost less than $10 each. Almost all of them are available for $100 or less. Such collectors may never spend as much as $500 at a major coin show, but there are hundreds or thousands of such numismatists compared to those who could afford to purchase a $1 million coin.

Right now, the economy is teetering, despite all the efforts of the many government officials to pretend that the economy is recovering. Purchasing rare coins is not one of life’s necessities. People who are concerned about being able to pay for the necessities of life such as food, clothing, shelter, and transportation, will hold onto excess funds right now “just in case.” So, I can understand why many coin dealers have seen their sales volume shrink this year.

Further, demand for collector coins in countries with a rising middle class population is stronger now than in years past. China, India, and Russia are just a few of the examples. The United States is not one of these countries on this list.

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Also consider the impact of gold and silver prices. Since the beginning of the century through 2012, the price of gold ended each year higher than it began. Even though the silver price did not appreciate every calendar year during this time span, its overall price increase surpassed that of gold. Well, 2013 looks highly likely to break the lure of “a sure thing.” Prices of both metals may end the year down more than 20 percent from the end of 2012. Although there was a surge of demand after major price drops in precious metals prices, these mini-booms did not last long when gold and silver prices did not quickly recover. However, even if total volume increased, that does not necessarily result in additional profits. The increased price competition in selling bullion-priced coins and bars means that dealers have to sell much more product in order to earn the same dollar profit.

Rather than crying that the market is down, long-time dealers need to realize that the nature of the rare coin market has changed over the past decade. Several dealers tell me that they only bring a fraction of inventory to shows compared to what they used to. The reason for this is that they can now take great photographs of their inventory and post it for sale online. There is less need for serious collectors to bear the cost of time and travel to attend coin shows in order to personally inspect pieces they might purchase.

Taken as a whole, the rare coin market has several strong niches and other sectors where activity is subdued compared to levels of a few years ago. This is a normal state of the numismatic market. As for whether the overall market direction is up, down, or stable, I think we will have to wait to see what gold and silver prices do in 2014.


Patrick A. Heller was the American Numismatic Association 2012 Harry Forman Numismatic Dealer of the Year Award winner. He owns Liberty Coin Service in Lansing, Mich., and writes Liberty’s Outlook, a monthly newsletter on rare coins and precious metals subjects.


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