Will Investor Demand Drive Out the Collector?

Gold and silver, be they in coinage form or trading as bullion, continue to move in tightly defined pricing ranges. Neither platinum nor palladium coins are as available as those comprised of gold or silver. Coins composed of either platinum or palladium have continued to appreciate recently – without having drawing much attention to them. This appreciation is primarily due to their intrinsic values, but if you examine mintage figures, these are coins that can be described as scarce to rare. Palladium coins have risen in value by a third so far this year, with Stuart Burns of MetalMinter predicting palladium as the metal will hit $2,000 an ounce by early 2020 (palladium was at $1,763 an ounce when this article was being written).

Coins touted in auctions as being scarce to rare continue to sell, but while their hammer prices appear to be significant, further examination indicates many of these coins are selling at or below the price the consignor paid for them. There have been few record prices recently, with many coins selling for prices that can be termed “soft.”

Dealers are experiencing good volume sales but are selling within tight pricing ranges. Investors are cautiously entering the coin market due to the volatility of equities; however, the question is being asked if hobbyists should welcome these investors, or is it the dealers who benefit from their return? Will a significant number of these investors become hobbyists, or are they being attracted simply because prices are below levels experienced several years earlier, looking to take profits, then move on? Collectors want affordable prices. Investor demand may drive some collectors away.

To see last week's commentary, click here.