Collectors Corner^SM: The Collectibles Marketplace

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Vintage rare coins, like the 1913-S Barber Quarter, represent one area of the numismatic market while modern bullion, like the 1986 American Gold Eagle, symbolize another area of the coin marketplace. Their similarities and differences drive the overall marketplace and offer many considerations for collectors-investors navigating the current market conditions.

Change is inevitable. Ultimately we can’t control much of what goes on around us, but we can prepare for eventualities or the inevitable. Whether we’re buying or selling, we would all like to know when to take our chance. Collectibles markets are constantly evolving. Rare coins, traditionally bulwarks in the collectibles market, have many competitors for collector and investor dollars today.

In the United States collectible coin market, we continue seeing record prices set for condition census rare coins. These prices are often due to a combination of their overwhelming demand, low population, and seldom (if any) auction appearances. If they come on the market, there will be competition for them among bidders. Yet, while strong bullion prices persist and demand is brisk virtually across the board, there is noticeable weakness in the overall rare coin market. Liquidity issues are starting to affect the bullion business.

While bullion prices are quite high, the premiums above melt charged for many mainstream bullion items, like gold and silver American Eagles, remain exceptionally low. Dealers want to buy and especially sell merchandise. For the most part, they are not speculating on bullion markets. Therefore, as with common numismatic material, marginal and more-difficult-to-sell bullion items are experiencing larger discounts.

There are always exceptions, but the general rule is to follow the profit. Dealers are still chasing the bullion business, and unless a coin has something “going for it,” so to speak, it might very well fall through the cracks.

Remember the old saying that while an apple and orange are both fruits, they are different? The rare coin market and the bullion market are different. Some of us in the numismatic world try linking how they react, but why should these two distinct markets react in a similar manner? There are different factors driving the rare coin and bullion markets. Yes, some of those factors are shared. But you must ask yourself if you’re more confident in the underlying value of your rare coins or playing the metals markets.

Perhaps the most important question is: what are you trying to accomplish?

Focus on rarity and demand, and let those determine both the direction you want to go and the underlying value of what you want to pursue. You can take advantage by learning about your preferred area of pursuit and seizing the opportunity when it knocks.