The rare coin market is a complex and sometimes confusing thing. Rare coin collectors respond to it differently than investors. In general, true collectors aren’t nearly as concerned about the intrinsic value of their collections. They are more concerned about the quality of their coins and with having complete series whenever possible. Investors, on the other hand, often put a lot of weight in the current value of gold and silver. Their confidence in the market rises and falls depending on those values. Investors and collectors alike are affected by the state of the economy as a whole too, and it is sure to make 2013 an interesting year.
The Light at the End of the Tunnel
Many analysts have already declared that the recession is officially over, but some still believe we have a ways to go. In either case, there’s no denying the fact that many important economic indicators are on upward trajectories. The state of the economy can affect the rare coin market in a few different ways. When times are good, people are more willing and able to collect rare coins for fun. When times are tough, people are more likely to sell their collections, but some folks start collecting in the hopes of making profits later.
At the beginning of the economic downturn, many long-time collectors sold their best coins out of sheer necessity. Soaring unemployment rates and lackluster financial markets prompted a strong need for liquidity, which is why many people ended up selling their rare gold and silver coins. This caused an influx of high-quality rare coins to hit the market, which actually lowered values in many situations. After all, there were more rare coins available. Things have slowly but steadily improved, however, and the glut that once existed is dwindling away.
When there is a reasonable number of exceptional rare silver and gold coins on the market, prices tend to drop. That is precisely what happened. However, this trend is fading. Prices are beginning to rise. People who have been thinking about collecting rare coins should act quickly. By the end of year, prices could be higher than they have been in years. Those who waited will have big regrets. There are no guarantees, of course, and no one is absolutely certain that the economy will continue to improve. However, it’s more likely that the economy will improve than it is that it will get worse.
As it stands right now, the economy is at a standstill of sorts. The price of gold and silver continues to fluctuate, but that is true pretty much all the time. When the economy gets into a rut like this, it is difficult to predict what will happen. With certain markets, like the real estate market, there is a lot of data that can be used to make educated predictions. That’s not the case with the rare coin market. There simply isn’t that much data to fall back on, so it is not easy to guess what will happen in the future.
Precious Metal Prices
Precious metal prices have at least a small impact on the value of rare silver and gold coins. However, serious collectors typically look beyond such qualities and are usually more concerned about the quality and rarity of such coins. Even if a coin has a very high face value based on its weight in gold or silver, it won’t be valuable to a collector without being in excellent condition or extremely rare. With all of that being said, precious metal prices can be great indicators about the course that the rare coin market will take.
When 2012 came to an end, gold and silver prices were on downward trajectories. It remains to be seen whether they will rebound in the new year. Furthermore, tracking tiny price fluctuations isn’t very useful. Still, it’s worth it for collectors and investors alike to keep an eye on precious metal prices. If nothing else, such information can provide clues about the state of the economy in general. For those who strictly collect coins for investment purposes, the value of precious metals carries a lot more weight. Fortunately, there are plenty of online resources that make it easy to track these values.
Uncertainty Rocks the Rare Coin Market
Financial markets don’t respond well to uncertainty, and the rare coin market is no exception. The dawn of 2013 saw a great deal of uncertainty due to the fiscal cliff debacle. The Bush-era tax cuts were due to expire at the end of 2012, and they nearly did. If it had been allowed to happen, a huge percentage of people would have seen their income tax rates soar. Congress was able to push through a compromise at the last possible minute, but the issue is hardly resolved.
Additional problems concerning the fiscal cliff will probably crop up sometime in the spring. Therefore, no one is quite certain about what will transpire, and that spells trouble for the rare coin market. Until the matter is settled and there is some sort of closure, many people will hold off on purchasing rare coins. Out of concern about what may transpire, some people may even sell their coins to be more liquid. There will be a period of at least a few months in which anything could happen. Chances are that it will mean a slowdown for the rare coin market.
Assuming that the fiscal cliff problem is put to rest once and for all in the spring, things could pick up again for the rare coin market. In the meantime, those who can should try to sit tight and hold onto their coins. Now is not the time to sell a rare coin collection. In a few months’ time, prices could be up again. Those who sell their coins now could lose out on some amazing opportunities later in the year. At the same time, now is definitely the time to buy. Prices continue to be remarkably low, and there are still plenty of exceptional coins on the market.
Rare Coins aren’t Going Anywhere
Rare coins may change hands frequently, but they will never go out of style. The current state of the rare coin market may not be ideal, but it won’t be like this forever. Most people would agree that things are considerably better than they were in 2012, 2011 or 2010. In fact, every passing year has seen small but valuable improvements. By the middle of 2013, the state of the rare coin market will be much clearer. Due to so much upheaval, it is difficult to predict how things will unfold.
Whether the economy continues to improve or falls into a slump again, there will always be people looking for rare coins. When buying or selling rare gold and silver coins, it’s important to do business with a reputable and dependable merchants. Many different factors can affect the value of a rare coin, which is why it’s so critical to have it assessed by an experienced professional. This is true when buying or selling coins. Those who buy and sell their coins without doing any research run the risk of paying too much or getting too little for them.