FOCUS: Numismatic Coin Collecting Interest Revived With Gold Price Drop by Blanchard | August
(Kitco News) Numismatic
coin collecting always appeals to a certain segment of the
precious metals industry, but some dealers say the drop
in gold prices earlier this year sparked greater interest
in the hobby.
Gold prices fell $200 an ounce in April
and then fell further again in June, but has since rebounded
to the $1,360 region. That’s still a far cry from
the nominal record high of $1,921 reached September 2011.
That fall in price revived interest in coin
collecting, said some dealers at the American Numismatic
Association’s World’s Fair of Money held this
week in suburban Chicago. The show continues through Saturday.
“The interest in collecting has risen.
It’s a direct result of the pullback in the (gold)
market. Even though there’s no correlation, the perception
is there,” said Paul Montgomery, executive vice president,
purchasing and sales at APMEX.
Buying interest has stepped up, but sellers
aren’t necessarily accommodating them. “The
drop in the precious metals market has made it a challenge
for some coin collectors to sell. Because of the pullback
(in gold prices), this is a buyer’s market. (But)
we’re seeing a bit of the supply and demand go out
of whack and premiums rising,” he said.
Michael Fuljenz, president, Universal Coin
& Bullion, said some of the demand is coming from people
willing to loosen their purse strings a little bit, too.
“We’ve seen a lot of pickup
in business, especially in coins. People with discretionary
money are spending again on their hobbies. From the 2008
recession until about 2011, we hardly saw anything,”
He noticed a little less interest from straight
bullion investment purchasers who are just interested in
bullion. However, the collector and the person who straddles
between numismatic collecting and bullion investing is buying.
“The pure collector and the collector/investor
is buying and that’s about 80%” of the market,
The ANA’s show is one of the top global
coin shows, Montgomery said. More than 1,000 coin and paper
money dealers are buying, selling and appraising items,
from coins worth a few cents to those over $1 million. Also
on display is the Chicago debut of the new $100 bill, which
goes into circulation in October.
It’s harder to get quality coins and
rarer coins, Fuljenz said. There are a few reasons for that.
One is the increase in hobbyists returning to add to their
collections, so that is driving up demand.
Another reason is that many coin dealers
aren’t stocking the inventory they used to carry.
Part of that is that banks aren’t loaning as much
money to businesses, Fuljenz said.
“Bank loans are tighter now. It’s
not just houses. If you were a dealer who used to have an
inventory of $10 million, you might now have $7 million….
So when the market heats up, there’s less inventory
around,” he said.
A third reason is wealthier investors are
entering the market, seeking alternative investments, whether
it’s rare coins, artwork or something similar, he
“The big money is spending like they
haven’t in the past five years. Coins that are in
the $5,000 to $10,000 range are scarce,” Fuljenz said.
He gave an example of gold coins from the
Carson City, Nev., mint, which operated from roughly 1870
to 1893, are harder to find. “I see one $20 Carson
City coin a year when I used to see three or four,”
Lee Minshull, president of Lee Minshull
Rare Coins, agreed that finer quality coins are scarce.
“It’s tough to buy nice coins
in the $10,000 to $100,000 range…. People who have
nice quality aren’t selling. (Those pieces are) in
strong hands. Those who have not very nice quality or just
OK, they’re the ones selling,” Minshull said.
Montgomery agreed that people with deeper
pockets are showing interest in numismatic coins, and bullion
to an extent. The tangibility of hard assets remains a lure
“There’s still not the interest
in the financial world, real estate is not what it was,
the stock market is still scary to a lot of people, but
gold is very real,” he said.