Tale of two coin markets continues

The tale of two coin markets continues, with a few coins that are seldom offered selling at astronomical prices at auction. The balance of the market vacillates or continues what has been a slow but steady decline.

It is difficult to tout these especially rare coins that appear in auctions as investments, since rather than trend higher they simply spike higher when offered. They can’t be charted, since unlike stocks and bonds there aren’t sufficient transactions taking place to suggest there is going to be continuing upward direction for their values.

Making things even more challenging to interpret, these coins don’t always realize a higher price than the last time an equal coin was offered.

The coin market in general is experiencing what is happening to all commodities. Despite recent downturns in the equity markets, there has not been any significant flight to commodities. The puzzling question is, why not? Silver is down on the year. Gold is up only slightly.

While dedicated coin collectors are enjoying favorable current prices, investors are staying away. In economic terms, this means we have a fixed supply of many collectible coins, but the demand for them has decreased.

There has been some decline in supply, as well as some collectors and dealers who hesitate to offer their coins while prices are suppressed, but this can only continue for so long.

Change will eventually come. Investors will come back, or dealers who are holding on will decide to sell at lower prices. Which will it be?

True collectors continue to buy, especially under these circumstances.