The Slumbering Market: Supply, Demand, and the Value of Collectible Coins
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Supply and demand matter when it comes to the value of collectible coins. We get hung up on mintage figures too often, while the demand for the same coins may not equal or exceed the number of coins available. Caution should always be taken when what is marketed as a limited-edition issue is first released. The issue may sell out initially, but what about what will happen in the secondary market?
For example, if a million coins were produced, would there be a million buyers for them when they hit the secondary market? This is where the price of coins occasionally bumps up initially, then drops and eventually levels off once the coins have been distributed beyond the mint.
Some of these coins are later suggested to be ‘sleepers,’ coins that are underpriced and, by someone’s logic, should once again appreciate once collectors realize just how scarce they really are. This may happen in some situations, but here is where the phrase " buyer beware" should be taken seriously. For example, the mintage figures for many of the Platinum American Eagle coins is very low, but their retail prices don’t appear to reflect this. A second example is the First Spouse half-ounce gold coins. While there are some significantly lower mintages of First Spouse coins, most dealers price each the same for their grade.
However, for both of these examples, the demand is low. So, if you are a collector, you can enjoy buying what you may view as a bargain. This is also the reason that only investors and speculators should view such issues as sleepers.
Many of these coins may continue to slumber.
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