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FUN Hits Speed Bump
 | By Debbie Bradley, Numismatic News
January 15, 2009 |
Forget about hitting rock bottom.
The coin market, while not spectacular, is holding steady and may be poised for an upswing by the end of the year, according to dealers attending the recent Florida United Numismatists convention in Orlando, Fla.
"I really did expect to see weaker prices for coins," said Greg Rohan, president of Heritage Auctions. "On a scale of 1 to 10, I expected a 6, was afraid of a 4, but I'd say it was (at least a 7 ½ or even) a solid 8."
While no sector of the economy has gone unscathed in this market downturn, rare coins and currency continue to hold their own, said Todd Imhoff, Heritage vice president, due in part to the commodity price of gold and silver and the passion that serious collectors have for coins.
"The market is OK," said dealer Gus Tiso of Salisbury, Md. "It's just a little slower. Coins are selling."
There were plenty of serious buyers at the FUN show, Tiso said. People who have money were buying quality coins, he said, but the collector who doesn't have as much money and is worried about the economy pulled back a bit.
"I had orders from new customers. There is money out there," he said. "The 'haves' are buying right now, hedging against a worsening economy."
Tiso remains optimistic.
"I think we have some good years ahead," he said. "I would say the second half of the year we are going to see a slight upswing again. I think in 2010 we are going to start again having a better market."
In fact, he's looking forward to a boom, "just like Jimmy Carter times."
Steve Musil, a dealer from Kearney, Neb., expects the market to start climbing again.
"It appears to me that a lot of liquidity is being pumped into our economy and at some point we may get whiplash from the speed at which we go from deflating values to a fast-paced inflation," Musil said.
With the stock market and certificates of deposits not providing the return on investment that people want, Musil thinks more investors and collectors will be putting some money into coins.
While rare U.S. coins were selling well for Nicholas Brown of Majestic Rarities, it was modern Chinese coins that were his hot item at the FUN show.
"The market was strong for me," he said.
As for the next six months, Brown expects the market to maintain the status quo.
"I think everyone is going to be very cautious," Brown said.
Right now, Brown is seeing success selling Chinese gold and silver coins, including the gold kilo.
"A lot of people have never seen a 2.2 pound gold coin," Brown said. "What's really nice about it is they're big, they're beautiful and they're a work of art. And unlike a modern U.S. coin, because the mintage is so small, they are highly in demand. All these coins grade MS-68 or MS-69 and there isn't a huge premium to pay."
A 2005 panda kilo gold coin goes for roughly $40,000.
For Tiso, gold, silver and copper coins are selling well.
"Gold is selling and silver dollars are always strong because it's a big coin. Americans like a big coin," he said. "The copper series, Indian cents and Lincolns, are very hot right now. The better grades are hard to find."
Brown expects the price of gold to rise by year's end.
"I think gold will move, and it may go down more first, but it will eventually break new highs, and it will happen in 2009."
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