Coin Collecting Doesn’t Exist in a Bubble

The price of gold American Eagle and generic circulation strike coins of the late 19th through early 20th century have recently stabilized, following as might be expected the spot price of gold bullion. The price of gold has leveled off on world markets due to the exchange value of the U.S. dollar and signs of weakness in the bond markets. Once again this illustrates that coin collecting does not function in some form of bubble that isn’t influenced by what is going on in the rest of the world. It doesn’t matter what you collect – all market sectors be they minor denominations, silver or gold denominations, they are all influenced by outside forces.

At the time this commentary is being written, it appears equities are appreciating to record levels. This in turn means there is more discretionary money available with which to either pursue hobby interests or to make tangible collectible asset purchases for either investment or speculative purposes. While the big winner is usually the scarce to rare coins, not everyone looking to obtain coins for non-collecting purposes is prepared to pay the lofty prices the top coins command. Collectible coins of more modest value as well as bullion-impacted coins are the beneficiaries. This doesn’t suggest that some future downturn in equity markets will signal a downturn in coin collecting, but not all sectors of the coin market are on equal footing and are impacted differently by outside forces.

Right now the best market barometer may be the continuing numbers of seldom-seen rarities that are being offered via auctions. Owners of such expensive coins only offer them when they feel confident their anticipated prices will be met. It does not appear they are being disappointed.