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Market Shows Signs of Investors Becoming Collectors

Photo by Andreas Schoelzel, courtesy of World Money Fair.

In an ideal world, an interest in coins would be the exclusive realm of collectors. The current interest in the coin market is driven partially by collectors with discretionary money, but also by a significant infusion of speculators and investors. These speculators and investors are driven by the weakened U.S. dollar on world markets and by the uncertainties of the economy in this age of coronavirus. This fear, in turn, is driving up the value of gold and silver.

Many of these individuals are interested in coins for their bullion value rather than their desirability as a collectible. Their focus becomes gold and silver American Eagle coins first, followed by business-strike coins with intrinsic value that were issued through 1964. In order to sustain the current rally in the business of coins, some of the people in this investor class of buyers need to cross into the scarce to rare coin category not continuing as investors, but because they have become interested as new collectors. This staying power is necessary for the future of coin collecting. Right now the prospects of this happening are good. Coin dealers have recently indicated there has been an increase in purchases via the internet. Significantly rare coins are appearing in auctions, this drawing the attention of the general as well as the established collecting public.

The supply is there. It is the demand that needs to expand, then be sustained. The other side of this coin is that should demand fall, collectors buy at better prices. Any decline won’t help dealers, who are also necessary to the continuance of the hobby. For now the market is expanding. That is a good thing.

 

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