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.