Bullion investors vs. collectors

Whenever the coin hobby experiences a bullion boom of the kind it has been experiencing in recent years, the point is always made that bullion investors could become coin collectors and, boy, wouldn’t that make demand for collector coins soar over the long term.

Well, the evidence gives little support to any kind of mass conversion of investors to collectors.

I have lived through three bullion booms – four if you break the 1970s in half at the 1974 gold peak.

The first was simply as a collector and reader of Coins Magazine and Numismatic News in 1967-1969.

Silver was very frisky then and investors poured in to buy the metal which was getting scarce.

I used paper route money to buy a 100-ounce silver bar at $2 an ounce, which at the time was near the peak. I was a coin collector who wanted to be an investor. I also needed to learn a lesson. Bullion doesn't always go up.

The price fell. Investors disappeared and times actually got quite hard in the numismatic field, especially for Krause Publications, publisher of my two favorite periodicals.

Why didn’t the investors become collectors? Good question.

Investors streamed back into the field after a bottoming out process in the early 1970s and then again 1974-1976 and then bullion was once again attracting attention. The peak was in 1980.

Then the bullion investors fled.

They began coming back in large numbers after bullion bottomed in 2001. Now they are very much in evidence.

If bullion turns cold, will they stay this time?

Not likely.

They didn’t before.

I don’t expect them to change now.