BLUESHEET: INFORMED BUYERS CONTINUE TO DRIVE MARKET VALUES

The certified coin market faces another test with the Heritage Central States auction. Coming off the heels of the same firm’s Dallas auction in April, it will be telling to observe at what price levels the market absorbs the more than 4,000 certified coins on offer. Dealer cash flow positions seem to be in better shape than at this point 12 or 18 months ago. While this does not always mean that dealers are willing to purchase and carry more inventory, it can help provide support at auction.

From Liberty head double eagles to modern proof bullion, one important factor that has impacted a variety of U.S. coin series, is the contraction in the telemarketer business model. Telemarketers traditionally make markets in retail-friendly products, focusing on popular series such as pre-1933 United States gold and super high grade moderns. We have been told by numerous dealers who supply these businesses that their demand has decreased to a trickle. While the most obvious factor to cite for this is the lack of activity in precious metals prices, there may be more to it. The perfect storm during the era when the gold spot price ran from $1,000 to $1,800, combined with the 2007–2008 global financial crisis, made tangible assets an easy sell, especially to new and first-time buyers. However, with the tremendous bull market in equities that has taken place since then and the recent results of the Presidential election, rare coins and bullion are a harder sell using established arguments. Does that mean rare coins are any less appealing to own? Of course not, but the solution for sellers lies in proper education of the buyer. Today’s coin buyer, especially those who are coming into the market with substantial resources, is better equipped to make shrewd purchase decisions, and tends to act decisively. The merits of rare coin ownership stand on their own, both financially and from an enjoyment aspect.

Dealers who are realistic about current retail price levels and understand the movements of the market are doing just fine in this market. With respect to certified coins, this also means staying abreast of changes in population data and pricing, especially in series such as Morgan dollars and double eagles. A well-read and informed rare coin buyer is not susceptible to speculative marketing that is not based on facts. This logic isn’t limited to rarities and high-end coins. The informed collector may be buying $150 Washington quarters, but that doesn’t mean any less thought goes into the purchase. There is a buyer for every coin at the right price, and that is what it takes to keep coins and money flowing through the market.

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