One of the most common questions we receive as coin dealers is, “What are the trends in rare coin values?” The trends in rare coin values can be influenced by several factors, including market demand, historical significance, the rarity of the coin, and even global economic conditions. For example, coins with a strong historical connections or exceptional preservation often appreciate in value over time. Also, as economic uncertainty drives interest in tangible assets, rare coins are viewed as a secure store of wealth, further fueling their demand. Understanding these trends is essential for anyone looking to navigate the evolving world of numismatics, whether as a hobbyist or an investor.
Do Coin Values Increase over Time?
In general, over long periods of time, rare coin values tend to increase. This has certainly been the case for rare coins over the past decade, but the key word here is “rare.” When a coin’s value is largely determined by rarity (along with condition and desirability) vs. bullion content, values tend to rise over time. However, when a coin’s value is largely tied to the spot price of silver and gold, its value will rise and fall with the value of the metal. Gold and silver prices have increased in in recent years; hence, bullion coin values have also increased.
When purchasing coins, you can purchase numismatically important rare coins or you can invest in bullion coins. Truly rare collectible coins have little relationship to the value of their precious metal content. Investing in rare coins is similar to investing in rare art, antiques, or other rare collectibles. Investing in bullion coins is akin to investing in other commodities like oil, corn, or soybeans.
How have rare coins performed?
Twenty years ago, a rare coin selling at auction for six or seven figures was shock. Within the last few years, though, these price ranges have been achieved regularly. In 2013, there was incredible competition for “trophy” coins like the 1794 Flowing Hair silver dollar. That coin, which is thought to be the first metal U.S. dollar ever minted, was sold at auction by Stack’s Bowers Galleries for $10,016,875. Numerous records were broken each time one of these masterpiece coins was publicly offered.
In the United States, other rare coin values have followed trophy coin prices. American collectors seem to be interested in collectibles for enjoyment as well as for the intended appreciation of the investment. The recent spike in sales of high-end collectibles, such as rare coins, art and antiques, may also reflect the increase in liquid assets the wealthy have to spend. Investors and collectors may be moving profits derived from the stock market into rare coins.
With the recent increase in gold and silver prices, new bullion buyers have entered the market; some have migrated to rare coins in search of additional sources of investment returns.
Like any investment, rare coins and other collectibles certainly carry their own risks. They produce no income, and have no future capacity to produce. If you invest in rare coins, you speculate that you will later be able to sell them for a higher price. Rare coins are not as liquid as, for example, stock market investments, and prices for most coins can only be determined through individual sales. However, for a true collector or an investor seeking to diversify, rare coins offer very attractive and inherently interesting investment possibilities.
It’s important that you consult a coin dealer whom you can trust. Research your coins, ask questions about the value and provenance of all rare coins that you are considering, and learn about the market value of rare coins. In many cases, it makes sense to invest in graded coins. Whether you are a seasoned investor or an avid collector, contact Grand Rapids Coins for insights into rare coins.
