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Buyers waking up to ‘cheap’ bullion

You can look at current coin market conditions as a glass being half full or half empty. Regardless of your perception, the market is half something. Several dealers with whom I’ve recently spoken admit to paying cutthroat low prices for inventory. They also explain that they need to.

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Buyers are anxious to buy gold and silver coins at the current low prices for these two precious metals. When silver dropped below $15 and gold dropped below $1,200, buyers began to aggressively seek out purchases. Unfortunately, dealers with older inventory paid too much at current price levels. They can sit on their older inventory or sell it at a loss to raise capital for future purchases. Turnover is the most important thing for a dealer. Dead inventory means previous mistakes prevent improving business going forward.

The other half of the problem – there are few collectors selling to dealers at current price levels. The rare coin market isn’t doing much better than is the market for coins impacted by bullion values.

There is no way to tell if the recent $1.74 million price realized for the Washington gold coin was good or bad, since the coin was purchased a long time ago at an undisclosed price from a private buyer.

The recently sold Eliasberg specimen 1913 Liberty Head nickel that realized $4.56 million had been auctioned for $1.485 million in 1996, was acquired in 2005 for $4.15 million, then sold again in 2007 for $5 million. Such is the checkered state of prices for most of the scarce to rare coins trading in the marketplace as the autumn season is about to start.

This article was originally printed in Numismatic News Express. >> Subscribe today

More Collecting Resources

• The Standard Catalog of World Coins, 1601-1700 is your guide to images, prices and information on coins from so long ago.

• Download The Metal Mania Seminar with David Harper to learn more about the metals market.