With investors away, collectors play

Coin dealers might not like it, but the spot price of gold and silver continues to impact values for a large portion of the collectible coins on the market today. The same is true for bullion coins, but that is to be expected except during the unusual occasions of buyer panic. Then even the premiums on bullion coins soar. But we are closer to a buyer strike than a panic.

Many common collectible coins composed of either gold or silver have been recently reported as selling closer to their melt value than they have in the recent past. If the mintage of an individual coin indicates some scarcity, there appears to be better demand, but overall sales volume in the relatively common coin portion of the market is down about 20 percent.

A significant part of this decline appears to be due to price resistance from dealers holding inventory purchased at higher price levels just prior to the most recent drop in bullion values.

Collectors are active at coin shows and other venues, with scarce to rare coins selling nicely as long as they are priced at current levels. There has been some cautious price appreciation in the better date and better condition coins, but these increases remain conservative.

It appears the low spot prices of precious metals continue to discourage participation of investors in this market, likely a mistake on their part, since from their perspective this is likely to be a bargain basement market.

Astute collectors see this as a big buying opportunity and are more than pleased to participate. They will be the ones selling their purchases at a profit when the investors come back.