Conditions Impact Rare Coin Market By Mark Ferguson
COIN VALUES Market Analyst
courtesy of HeritageAuctions.com
When the Finest Known Indian
Head gold $10 Eagle, PCGS Mint State 67, changed
hands March 16, its new buyer paid $1,725.000.
In 1979, Dr. Steven Duckor paid $85,000 for
it. The most profitable collections mature over
Most experienced coin
collectors seem to have developed a fair grasp of
economic changes and conditions, even though few of
us are qualified economists.
For the most part, collectors and dealers have learned
to think for themselves, evaluating economic changes
as they occur.
April 25, the US. stock market posted a new milestone
as the Dow Jones Industrial Average reached 13,000
for the first time. Just 25 years ago it was lower
than 1,000. Sales in the housing sector have slowed
considerably during the past year and prices have
fallen. And now we have the dollar near a record low
compared with other major currencies, such as the
euro, the British pound, the Japanese yen, etc.
And as we all know, oil prices, and hence gasoline
prices, have skyrocketed during the past couple of
years. Other costs of living are rising, such as grocery
items and insurance costs. But most of the population
seems oblivious to the major factors underlying the
Some say precious metals are very much
overpriced, while others predict gains at multiples
of todays prices. Who do we believe? The best answer
may be to read and think for ourselves. Of course,
the Republicans, now in the White House, will paint
a rosy economic picture as the presidential election
nears, and most mainstream investment specialists
talk down rare coins and precious metals in favor
of the traditional investment products they sell.
The bull market in rare coins, as well as for high-grade
contemporary coinage, that has lasted during at least
the past four years has given us proof positive that
coins are great investments. Even most collectors
who purchase coins just to enjoy building a collection,
not to invest, secretly hope their collections will
bring much more money at resale than what they've
paid, and that's generally the case if one can ride
out the long-term market trends.
Most astute collectors instinctively know that well-formed
collections will be in demand, bringing strong prices
at the time of resale, if they work at it with a good
long-term plan. Savvy, big-money participants know
this. They've been lucky to see major rarities climb
in prices from a few hundred thousand dollars 10 to
15 years ago to mul-timillion dollar prices today.
Other collectors of more average means have had similar
percentage gains with many other lesser-priced coins.
The most successful collectors, in terms of earning
profits, take a long-term approach, over many years,
not just in a couple of years of trading in and out
of the coin market.
Economic conditions change, sometimes very quickly,
and other times barely noticeably during many years
and decades. The coin market doesn't follow set patterns
as the economy changes, except that during times of
high inflation, coin prices generally rise. However,
there is no general "rule" for coins, such
as when stocks are up coins are down. We've seen diverse
occurrences as both markets change.
Probably the best areas to read about in relation
to how economic changes affect the coin market are
what's happening to the dollar in relation to other
currencies and precious metals industrial usage, as
well as their historic economic trends and what's
going on with the underlying trends in the worldwide