Would it be a good thing for the coin hobby if gold dropped to $700 a troy ounce and stayed there for a few years?

A good case can be made that the rapid upward movement in the price of the precious metal has made gold coins unaffordable to a larger number of collectors. It is the disposable income of collectors that ultimately drives prices in the numismatic market.

Sure, trophy coins like 1913 Liberty Head nickels can stay in the stratosphere. Their prices don’t fall. A weakness in the market is usually manifested by the removal of these coins from the market as owners await better times.

However, coins with larger populations in both raw and slabbed states see more fluidity in pricing, but even with these, there is enough rigidity to create unsustainable situations.

Many readers have pointed out the disappearance of scarcity premiums on gold coins that used to have higher mark-ups when compared to the underlying value of the bullion than they do now. They are right. They have shrunk or disappeared.

Stability in gold’s price allows some differentiation to occur that simply does not exist when upward thrusts reduce many coins to bullion value.

For example, gold $20s have long had a narrower price differentiation based on mintages than Lincoln cents. It is logical. There are more collectors of Lincolns than double eagles. What collectors there are tend to focus on the very top end. Also, the base price of any double eagle is far higher than a base price for any Lincoln, so there is wider room to make price differentiations.

In the VF-20 column in the June Coin Market, the 1892 double eagle with a mintage of 4,523 is priced at $1,350, less than $400 more than the $963 price of an 1898-S, which has a mintage of 2,575,175. In calmer markets, the 1892 was around 2-2.5 times the price of the 1898-S.

Sure, in calmer markets we lose the excitement of rapidly moving bullion, but we collectors get to be more true to ourselves by making buying and selling judgments based on scarcity.

Are there any rare coins left in collections?

Seems like a silly question, but I was paging through auction catalogs for the sales that will be held in the last week of May both before and during the Long Beach show.

Wow. It is amazing what is going on the block.

Collectors at certain levels of achievement find that it is very difficult to carrry on to a logical conclusion because certain rarities come into the market only infrequently. That can stymie many a hobbyist with large sums at his disposal. This is their time. Act now. It is a limited opportunity.

The present market environment seems to be at that rare point in time when generational shifts, profit-takers and routine business factors all seem to be working in favor of bringing coins to market.

The generational shift means none of us is getting younger and sooner or later prudent financial planning means selling off beloved coins. That certainly seems to be the case with the April sale of the David Queller Collection. It was apparent how emotionally bound up he was in his coins. He is not alone. We all feel it, but we all aren’t going to have an auction catalog with our name on it.

Profit-takers who bought coins a few years ago, even six months, ago might decide now is the time to take money off the table in view of the uncertainties in the economy and in the rest of the world.

For regular dealers it has been conventional wisdom since the present market got truly hot that the absolute best way to get the highest possible price for quality coins and bank notes is to consign them to a public auction.

How long this happy confluence of factors will remain is anyone’s guess, but boy oh boy do I enjoy seeing what is coming up for sale.

Treasures seem to be making a lot of news these days. It is not just one but three that have come to my attention in the last several days.

The dispute between the Spanish government and Odyssey Marine Exploration goes on over what is claimed to be $500 million in Spanish silver coins taken from what Spain says is the wreck of a naval vessal, the Nuestra Senora de las Mercedes, sunk in the Atlantic Ocean in 1804.

Hobbyists may be cheering for one side or the other, but the fact is that sooner or later the coins will enter the market.

The legal dispute could stretch on for years in the Florida court handling the matter, though if the coins are indeed from a warship, then Spain would seem to have a very strong case under admiralty law.

A recovery team that planned ahead and got legal title to a wreck in the Gulf of Mexico 60 miles off the Louisiana coast has yielded U.S. gold coins struck at the Southern mints and a nearly complete set of Capped Bust half dollars.

This treasure is smaller. It is valued at $1 million, but U.S. collectors who collect Dahlonega, Charlotte and New Orleans gold will be interested to see the census of the coins recovered even if they don’t want to buy them when they become available.

The wreck is of a sidewheel steamer called  the SS New York that sank in 1846.

And a subcontractor of the Mel Fisher Center in Florida claims to have found some jewelry from the treasure fleet of 1715 that sank in a hurricane. Not numismatic, but interesting and it puts a name back in the spotlight that has been coming in and out of numismatics for decades, though Mel himself is no longer living.

Stay tuned. Treasure always seems to attract buyers who are willing to pay too much.