I had a couple of emails yesterday from collectors who asked why the prices of certain coins are what they are.
That’s a tough question to answer.
I expect they want to be told that there is some formula. After you input all the variables, you then get an answer. That price is correct. All others by implication would be wrong.
It does not work that way.
There are tendencies in the coin market. There are no absolutes.
If a large number of collectors are interested in a particular coin series, those pieces tend to be priced higher than a similar series where there are very few collectors.
Coins in top grades tend to be higher priced than the same coins in lower grades.
Coins made of precious metals can run up hugely when the prices of gold and silver are motoring ahead completely independently of any collector factors.
If you study the gold series, you marvel at how low mintages can be yet prices are very little higher than melt value. This is because there are very few collectors of gold and the bullion influence overwhelms anything else except in the very top Mint State and proof grades.
I am sure veteran collectors can add to my list of price influencing factors, but none of them will yield a single, definitive value number unless you are talking about today’s melt value alone.
Also, none of these factors assure rising or even steady prices.
Popular series can turn cold and be abandoned by large numbers of collectors.
This currently is true of Prestige proof sets from the 1980s and 1990s, which combined a proof commemorative silver dollar (sometimes a half dollar as well) with the standard clad proof set coins, cent through half dollar.
A letter sent to me says these sets are so cheap that you can probably buy the full set at a price that is equal to or even less than the cost of the commemorative silver dollar alone.
How can this be?
If present collectors are not willing to pay an asking price, the prices of the sets will decline until a willing buyer is found.
On the other hand, a collector of commemorative silver dollars might want the dollar coin in the set and not any of the other pieces. This buyer is paying someone to take the trouble of breaking up the set and providing the dollar with a new holder. He might be paying for third-party grading. He might be paying for the dollar in original commemorative packaging.
It might seem odd to view a full set as a cost, but a dealer has to tie up his working capital to buy the set. It costs money in the form of labor to remove all of the coins from the holder and properly dispose of it. It costs money to have them graded. It costs money to rehouse and offer the coins for sale to others. It even costs money to simply take the clad proof coins in the set to the bank to obtain face value, though this happens remarkably rarely.
Collectors tend to prefer original packaging if they are not buying professionally graded coins.
This is why sets tend to stay in their original holders and simply get marked down in price until someone else comes along who is tempted by the low price and the thought that he is purchasing a full set for the cost of the dollar alone.
Buzz blogger Dave Harper is winner of the 2014 Numismatic Literary Guild Award for Best Blog and is editor of the weekly newspaper "Numismatic News."