Dealers buy gold but collectors don’t

The recent stock market correction has had an impact on the business of coins. Gold is selling, believe it or not. But it is not selling to collectors. Instead, it is being scooped up by dealers. It appears the reason is so people can raise fresh money with which to take advantage of the lower prices in the U.S. stock markets.

Gold and silver bullion have had a disappointing reaction to the market slide, with prices for bullion-impacted coins remaining soft under the circumstances.

The Numismatic Stock Index of U.S. publicly traded numismatic-related businesses slid along with the stock market. As of Feb. 9, NSI-listed stocks were trading at 68.44 percent of their 52-week highs, which is down from 78.7 percent one month earlier, placing them at the same level as they were in May 2016.

Hit particularly hard were Collectors Universe (parent company for Professional Coin Grading Service, down 31.6 percent in one month) and A-Mark Precious Metals (down 10.2 percent). Foreign stocks traded down a modest 0.42 percent from one month earlier and did not appear to be impacted by the correction.

Rare coin prices remained steady as a rule. There is not even a notable exception to this lack of price increases.

The coin market appears to be taking a breather, with discretionary money now being in shorter supply. Perhaps potential buyers are holding back to see if the stock market correction will turn into a rout as was the case in 2008. If history is any guide, it will not become that severe, but painful memories might temporarily stall active buying, overruling history’s teachings.

Take advantage by hunting for bargains.