Coin collectors with cash to spend are kings

(Image courtesy http://money.cnn.com)

Gold’s down. Silver’s down. Platinium’s down. What a difference a week makes.

In consequence, it can be no surprise that collectible but common-date busines-strike gold coins continue to deflate in value along with their intrinsic value.

What is going on has less to do with the collector demand for these coins but much to do with the increasingly strong U.S. dollar on foreign exchange markets. It is coupled with fears of a possible trade war.

This combination of factors is driving the value of all precious metals downward despite the political and economic problems appearing on the world stage.

Gold and silver are struggling to compete with yield-bearing assets such as Treasury bonds as borrowing costs rise. Since coins have the opportunity to appreciate in value, but don’t pay a dividend that can compound, would-be investors continue to sit on the numismatic sidelines.

These same investors aren’t buying better coins for the same reason. Collector interest is strong, but this is not creating sufficient demand to outstrip available supplies. The advantage, however, is in the collector’s corner for this reason. Prices for many desirable coins remain reasonable when compared to a few years ago. If you have cash to spend and you are planning to add to your collection, this is a great time to do it. Classic coins will always be classic.

If you are looking to invest for a quick gain, you should look elsewhere.