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Rare Coin Market Commentary – What To Expect For 2017 And Beyond

Now is an excellent time to be collecting rare coins

By Jeff Garrett for Numismatic Guaranty Corporation (NGC) ……

As the year winds down most who are involved in the world of numismatics are starting to consider what the New Year will bring. Many will be happy to put 2016 in the past. The rare coin market has been quite soft in most areas. The accumulation of excess rare coins entering the market has taken its toll. The mega auctions of old time collections has been difficult to digest in the last few years. Sales such as Newman, Gardner, Pogue and many others have more than amply supplied the rare coin market with material. Also, for every mega sale there are many more private transactions of material that also come into play. There is only so much money to take these coins off the market.

Another part of the market that has been extremely week is generic United States gold coinage. These are defined as the most common issues in grades of MS 60 to MS 65. Premiums for these types of coins are near all-time lows. Again, the main culprit for this is the amount of new coins coming into the market. I’m not sure of the reason, but the flood gates of fresh coins coming from Europe has increased dramatically in the last several years. The buying power of the US dollar could be one of the factors.

Regardless of the reason, the generic gold market has been weak and for many years these coins have been a pillar of the US coin market. There are a lot of dealers who count on these coins for a living.

As mentioned above, prices have been very soft for most US coins. Price guides and auction records show declines in many areas of the market. Some rare coins are at the lowest levels in over two decades, with Proof type coins leading the list of depressed series. Prices for many 20th-century series have also been under pressure in the last 12 months. Those who collect coins for set registries have felt the pain of low-pop coins seeing an increase in available coins entering the market.

Finally, the rare coin market has seen a huge shift in the preference of buyers. The average collector is now very fussy and wants coins with great eye-appeal. This phenomena is seen clearly in the wide range of prices coins have been bringing at auction. The market is now driven by collectors, most of whom understand quality. Investors are less picky but there has been less of this kind of money in recent years.

But enough of the bad news. There has been some new enthusiasm in the last few weeks.

The election of Donald Trump is clearly seen as good news for many of the demographic that buy rare coins. Buyers of high-end coins are probably the ones who will most benefit from a “pro-business” president. Lower taxes will also be a huge plus for many rare coin collectors.

In recent weeks, most of the shows and events I have attended have shown increased enthusiasm by those in attendance. The flood of new material has slowed greatly and a lot of dealers are looking to increase inventory. That has not been the case for quite some time. There are also a few new buyers that have entered the market and they are buying large quantities of rare coins. One new collector has reportedly spent tens of millions in just the last six months.

This is great news for a market that had been over saturated with expensive coins.

Modern coins have played a large role in the rare coin market in the last several years. The US Mint has produced a wide array of interesting coins and several exciting products are on the drawing boards. Some collectors and dealers have expressed deep concerns about proliferation of modern coins, but I think there is a bright side that should be considered. Tens of thousands of new collectors are created by the marketing of modern coins. This is an undisputed fact. A certain percentage of these new collectors will graduate to vintage coins. I have seen this with numerous clients of my own. Hopefully the exposure of numismatics to the large group that have purchased modern coins will pay dividends in years to come.

In summary, the rare coin market has faced many headwinds in the last few years. I am very optimistic about the prospects for 2017 and beyond. Now is an excellent time to be collecting rare coins. There has never been more information available for the study of numismatics. As I have stated many times, numismatic education is your best chance to be a successful collector. Prices for most rare coins are also extremely favorable. The financial downside for serious collectors has been greatly reduced and now is a great time to start building a collection.

Next week the Florida United Numismatists, Inc. will hold its annual convention in Ft. Lauderdale. The annual FUN Show has always been a great bellwether event for the year. Hopefully, I will have great things to report in my next article.

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Questions about the rare coin market? Send them to [email protected].

Jeff Garrett bio

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Numismatic Guaranty Company
Numismatic Guaranty Company
NGC was founded in 1987, and for coin grading, its opening heralded the introduction of a new standard of integrity. From the beginning NGC focused on only one objective, a standard of consistent and accurate grading. As NGC has grown to become the leader in third-party grading services, we have maintained a steadfast and uncompromising commitment to this standard. The knowledge, integrity and dedication of NGC's team of grading experts ensures you a level of grading consistency unparalleled among grading services. This record of consistency, built over the years, has helped to foster greater stability throughout the rare coin marketplace.

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