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Jeff Garrett: Do Bullion Prices Still Matter?

While prices of gold and silver have cooled, the collectible coin market is still on a hot streak


By Jeff Garrett for Numismatic Guaranty Corporation (NGC) ……
Jeff GarrettThis afternoon, I saw another slip in the prices for gold and silver. At the time of writing, the spot price of gold stands at $1,710, and the price of silver just slipped below $18 for the first time in three years or more. These downward moves are remarkable in light of the current inflation rates reported by the US government. After years of very modest inflation, the reported rate is now around 8.5%. For anyone who buys food and many other necessary goods, you know that the rate increases for many products are much higher.

For decades, precious metals have been an investment hedge for those wanting to protect against excess government spending and the resulting inflation. We now have extreme government spending and inflation, but gold and silver have fallen. Equally confounding is the strong demand for physical gold and silver. American Silver Eagles are trading for about $10 over spot–an incredible 50 to 60 percent above melt.

2020 American Silver Eagle NGC ANA President Signature labelThe strength of the US Dollar is the reason most often given, and many skeptics believe the “global powers” are artificially depressing paper trading of precious metals to mask the impact of inflation. I will let the gold and silver bugs debate this issue, but the big question is: Do gold and silver prices still matter in the rare coin market?

The recently concluded ANA World’s Fair of Money and the auctions held the week after the show would indicate no. At one time, the link between bullion prices and the rare coin market was very strong. Past booms in the market, such as in 1979, were directly linked to soaring gold and silver prices. Many rare coin dealers were making millions and buying rare coins with the proceeds. When bullion prices fell sharply in the following years, rare coins prices crashed and did not recover until the next spike in bullion prices several years later. Until recently, this close link has remained constant.

The 2022 ANA convention in Rosemont, Illinois, was a great success by almost any measure. The crowds were ample and those in attendance were buying coins. The only dealers who found the show unsatisfactory were those with meager stocks of rare coins. For the first time in several years, there were dealers from around the world, and they all reported great sales.

Personally, I have benefited from the strength of the US Dollar when buying ancient coins from several of my regular sources. The special display of artifacts from SS Central America was one of the most interesting I have ever seen. If you did not attend the show, then you missed out.

Jeff Garrett: Do Bullion Prices Still Matter?The auction sales by Stack’s Bowers and Heritage the following week were simply staggering in size. The slate of sales literally took the entire week to conduct. Many landmark collections crossed the auction block, and record prices were achieved across the board. This all happened with sharply lower bullion prices posted throughout the week. Buyers seemed completely uninterested in the prices of gold and silver. The totals have not been reported yet, but I’m sure the combined totals for Stack’s Bowers and Heritage will exceed $100 million. Sales at the convention the previous week were almost certainly in the tens of millions.

One of the highlights of last week’s auction was the Salmon Collection of Massachusetts silver coins. The small selection of rarities sold for over $2.9 million.

Ancient coins were another super-strong segment of the market last week, with several coins selling for six figures. One of the highlights was a Roman Imperatorial, Octavian & Divus Julius Caesar Gold Aureus graded NGC Ancients Ch VF that realized $288,000. Many ancient coins sold for multiples over the estimates.

There was amazing strength in nearly all parts of the rare coin market at the ANA show, and the auctions held the following week. The sale last week of a Mickey Mantle baseball card for over $12 million further demonstrates the incredible demand for rare collectibles.

Jeff Garrett: Do Bullion Prices Still Matter?Many of the armchair quarterbacks who ponder the rare coin market are surprised that collectibles are holding or increasing value in a down market environment for nearly all other conventional investments. The stock market seems to be taking a daily pounding; bonds are falling; real estate has come to a halt in most areas; cryptocurrencies are down by more than half and cash is losing buying power as inflation stays stubbornly persistent. There is seemingly nowhere to hide except collectibles. Maybe that is the primary reason for so much interest.

Falling bullion prices could have one major benefit for the health of the long-term rare coin market. As falling prices tempt new buyers and those looking to preserve wealth, a certain percentage of them will eventually transition into coin collectors. This pattern has been repeated many times over the decades. American Silver Eagles have long been known as the “gateway” introduction for new collectors. The cable TV shows and full-page media ads by large marketing companies bring in hundreds of thousands of new buyers each year. We all owe thanks to them for growing the hobby each year.

Even though rare coin buyers seem to be ignoring falling bullion prices, that may change in the future when metals turn around. A major increase in gold and silver prices would create more foot traffic in shops around the country and spur sales for the major marketing companies. Rising precious metal prices would probably be a positive for the market.

The long historical connection between precious metals and rare coin prices seems to be on pause, at least for the time being. Records continue to break for rare coins and other collectibles even as bullion prices fall. Time will tell if this is a short-term phenomenon or the new normal.

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Rare Coin Gallery


Jeff Garrett
Jeff Garretthttps://rarecoingallery.com/
Jeff Garrett, founder of Mid-American Rare Coin Galleries, is considered one of the nation’s top experts in U.S. coinage — and knowledge lies at the foundation of Jeff’s numismatic career. With more than 35 years of experience, he is one of the top experts in numismatics. The “experts’ expert,” Jeff has personally bought and sold nearly every U.S. coin ever issued. Not a day goes by that someone doesn’t call on Jeff Garrett for numismatic advice. This includes many of the nation’s largest coin dealers, publishers, museums, and institutions. In addition to owning and operating Mid-American Rare Coin Galleries, Jeff Garrett is a major shareholder in Sarasota Rare Coin Galleries. His combined annual sales in rare coins and precious metals — between Mid-American in Kentucky and Sarasota Rare Coin Galleries in Florida — total more than $25 million. Jeff Garrett has authored many of today’s most popular numismatic books, including Encyclopedia of U.S. Gold Coins 1795–1933: Circulating, Proof, Commemorative, and Pattern Issues; 100 Greatest U.S. Coins; and United States Coinage: A Study By Type. He is also the price editor for The Official Redbook: A Guide Book of United States Coins. Jeff was also one of the original coin graders for the Professional Coin Grading Service (PCGS). He is today considered one of the country’s best coin graders and was the winner of the 2005 PCGS World Series of Grading. Today, he serves as a consultant to Numismatic Guaranty Corporation (NGC), the world’s largest coin grading company. Jeff plays an important role at the Smithsonian Institution’s National Numismatic Department and serves as a consultant to the museum on funding, exhibits, conservation, and research. Thanks to the efforts of Jeff and many others, rare U.S. coins are once again on exhibit at the Smithsonian Institution’s Museum of American History. Jeff has been a member of the Professional Numismatic Guild (PNG) since 1982 and has recently served as president of the organization. He has also served as the ANA President and as a member of the ANA Board of Governors.

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  1. The current coin price level is primarily the result of inflated major asset markets which are and have been in a full blow mania for years or several decades: stocks, bonds, and real estate. That’s the source of the wealth to support these prices.

    The scale of financially motivated coin buying is negligible compared to the market capitalization of the major asset classes, but there would be no market at these prices without it. No different for other collectible areas or art.


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