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Bullion decline takes coin prices lower

The spot prices of both gold and silver took yet another dramatic downturn this past week, taking many bullion-impacted coins with them.

It didn’t matter if it was an American Eagle, a collectible yet bullion-influenced former circulation coin, or a modern commemorative. The values declined.

Ongoing weakness in precious metal prices and related coin prices again put the inventory of many dealers in jeopardy. They cannot justify selling these coins at a price that would not yield a profit. They are reluctant to sell at a loss. Yet further declines, if they occur, would put dealers further in the hole.

At the same time, the major auction houses continue to realize enormous gross prices realized. This isn’t necessarily because the rare coin portion of the market is doing so well but because increasingly both dealers and collectors are consigning rare coins that traditionally might have been offered over the counter. The sheer quantity of coins bulks up total prices realized.

The reason auctions are favored is velocity of turnover, not because they are getting a better price for each individual coin. Yes, there are some coins realizing record prices at auction, but these are few and far between.

The market is cautious right now, and with good reason. The number of active collectors is down. The number of investors is even further down.

Think about it. This should be thought of as a golden buying opportunity. For those who are actively collecting, prices couldn’t be better.

 

This article was originally printed in Numismatic News Express. >> Subscribe today

 

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• Download The Metal Mania Seminar with David Harper to learn more about the metals market.

• Any coin collector can tell you that a close look is necessary for accurate grading. Check out this USB microscope today!

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