Prices of circulation strikes follow metals

A coin dealer with whom I spoke at a recent local bourse pointed out most circulation strike gold and silver coins, regardless of the time period in which they were issued, are closely following the spot price of their metal content unless the coin is certified to be in an unusually high Mint State grade. In other words, the coin has to be a grade rarity in order to command a numismatic premium. Doom and gloom? Not really. But it is reality at present.

On Oct. 10, the U.S. portion of the Numismatic Coin Index charting the 52-week average of coin-business related stocks rose 2.94 percent from one month earlier, led by Sotheby’s and Collectors Universe. If you are truly a collector, this is a buying opportunity. If you are an investor, read the tea leaves.

Demand for both gold and silver coins followed the declining demand for the metals in any form throughout the first nine months of 2017. The United States Mint has reported sales of coins to be at its weakest levels in a decade. Silver coin sales totaled less than 3.7 million ounces, a low not seen since 2007.

The spot price of silver dropped nearly $2 during September. It has been bouncing back in October. Even at the September low, the silver price was higher than the short-term July low of $15.24. Perhaps a strong bottom is being formed.