U.S. Coin Supply Out-Pacing Demand

Sales are up, prices aren’t. This pretty well summarizes the current state of the business of coins.

Some of this can be blamed on the recent declines in the commodity spot price of precious metals; however, there is some weakness in the market for copper half cents and cents, and for nickels as well. Morgan silver dollars continue to under-perform, although there have been some surprise upticks, especially for very high-end grade certified coins, these not necessarily being key dates. In fact, some key date Morgan dollars have recently sold for lower prices than are their published prices.

In a recent promotional letter, Heritage Auctions wrote, “The rare coin and currency markets have enjoyed renewed strength this year ... [American Numismatic Association] coins auction generated an astonishing 99.5 percent sell-through rate, and that collector demand continues.”

Overall, scarce to rare date coins sell well, but even here there have been some noticeable price declines. Simply put, supply can be termed “available” for most U.S. coins, but demand isn’t keeping pace. Should more investors enter the coin market, this might give a boost to prices, but this would likely come at the expense of true collectors, who at the moment still view most values as being reasonable.

Yes, some investors might become collectors, but most investors invest where opportunity is envisioned, then move on. While dealers will embrace an influx of investors, true hobbyists might not be as pleased. The business of coins and collecting coins doesn’t always move in tandem.

This article was originally published in Numismatic News.

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