Remains Bullish for 2007 Coin Market By Mark Ferguson
COIN VALUES Market Analyst
a few segments of the economy may be struggling, like
the housing sector, the Federal Reserve is keeping its
eye on inflation, which it reports to be the greatest
concern at present. Comparatively lower energy prices
are now helping to quell the inflation risk, but it's
nevertheless a concern that's underlying the economy.
Because of this continuing risk, many investors are
again turning to precious metals and rare coins as inflationary
hedges, as these items tend to increase in value as
inflation heightens. Many professional gold analysts
say that central banks of several countries are working
in coordination with each other to artificially keep
the price of gold stable or to try to cap the price.
Some believe the price will soar in the near future
as natural market forces overtake planned economic controls.
2006's volatile gold market resulted in a
price correction that forced many pre-1934 gold coin values
significantly lower as the premiums over their melt values
dropped. So this may be a good time to purchase common numismatic
gold coin issues.
Coin dealers are reporting the market to be very active again
at this time. Those who handle the high-powered coins report
that market segment has not slowed down in several years.
People who purchase coins in the tens and hundreds of thousands
of dollars are usually quite sophisticated in money matters
and wouldn't spend this kind of money if they perceived a
serious risk of falling coin values.
However, on the other end of the population spectrum, television
news programs report that about two-thirds of Americans are
living from paycheck to paycheck. Most people just can't seem
to get into a savings mode. By building coin collections people
are able to have fun and build equity in their collections
that's reasonably liquid.
this happening as values for circulated coins continue to
grow, and as high-end coins and circulated coins have continued
to experience strong demand. It's the coins in the middle
- the low to mid-grade Uncirculated coins, those grading from
Mint State 60 to MS-65 - that haven't shown much action for
a while in general.
These days, collectors generally want coins that grade higher
than MS-65, except for modern issue coins, for which people
want the MS-69 and MS-70 grades. Registry collecting is still
a strong influence in this collecting arena. The Wall Street
Journal reports "online registries of graded coins tap
into collectors' competitive sides and help drive prices higher."
The Internet has also been credited with helping to greatly
expand the coin market by allowing traders to more easily
buy and sell coins and to study them. However, it's also publicity
from outside the market, like the recent Wall Street Journal
article, that's helped to attract new buyers and collectors.
The United States Mint has also been a huge factor in helping
to create new collectors. The State quarter dollars program,
which began in 1999 and runs through 2008, and the new designs
for the Jefferson 5-cent coins, introduced from 2004 to 2006,
have greatly stimulated collector purchases. Now the market
is poised for the introduction of the Presidential dollar
coins beginning in February. Mint officials are hoping they,
too, will attract strong demand from the public.
NEW COIN DESIGNS like the State quarter dollars and the Westward
Journey 5-cent coins, like that above, have helped promote
collecting among a larger population. The impending start
of the Presidential dollars program may have similar results.