Doesn't the price of bullion lead the rare coin market?
jpkinla
Posts: 822 ✭✭✭
I have read many of the ANA market reports and can certainly understand the weakness demonstrated in some areas of the coin market. Truly rare coins brought all of the money and then some with the widgets bringing lower values overall.
It is true that the price of gold and silver have a direct influence on the strength of the rare coin market so it isn't surprising to have a lulll in that gold and silver have been languishing lately. I do believe, however, that will change in the coming weeks and months as gold begins it seasonal ascent into the holiday season and ultimately Valentine's Day 2007. As the supply of coins get absorbed in the coming months and the auction bills get paid off I believe that we will resume the strength we have seen.
The fundamentals which have brought us here haven't changed and in fact have gotten more compelling.
It is true that the price of gold and silver have a direct influence on the strength of the rare coin market so it isn't surprising to have a lulll in that gold and silver have been languishing lately. I do believe, however, that will change in the coming weeks and months as gold begins it seasonal ascent into the holiday season and ultimately Valentine's Day 2007. As the supply of coins get absorbed in the coming months and the auction bills get paid off I believe that we will resume the strength we have seen.
The fundamentals which have brought us here haven't changed and in fact have gotten more compelling.
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roadrunner
The only way I could see it having any effect would be from profit or losses encurred by the dealers from his bullion business affecting his cash flow for making coin purchases.
I really think any effect it may actually have is purely psychological. If the market is up people are exuberant and spend freely. If it is down they are depressed and just aren't "interested". Even though the "down" market is significantly higher than what it was last week, or the "up" market is still below last week.
and dealers are making money in metals then there will be more buying but this
will not necessarily be the same kind of kick it was in '79 when dealers were a-
wash in profits from selling metals brought in by the general public.
I also have a lot of doubt that gold is poised for another huge move. Silver looks
better than ever but gold is going to need to consolidate the recent increases be-
fore it can be propelled higher by new buying. Even if it were to go up now, there
is no certainty coins would be dragged along with it.
This bull market may just be in a transition phase. There are a lot of outside fac-
tors affecting it but all the trends appear solidly in place.
It's not time to bail. When it is time to bail it will be too late anyway.
Dealers awash in liquidity as they profit from gold sales certainly helps the cash flow. The opposite is just as true. It was odd that major dealers at the ANA who play heavily in the generic gold market were some of the weakest buyers at the show. I had seen these same dealers buy agressively in all types situations over the past 4 years. This was the first time I saw them all pull in at the same time.
roadrunner
Dealers awash in liquidity as they profit from gold sales certainly helps the cash flow. The opposite is just as true. It was odd that major dealers at the ANA who play heavily in the generic gold market were some of the weakest buyers at the show. I had seen these same dealers buy agressively in all types situations over the past 4 years. This was the first time I saw them all pull in at the same time. Fortunately there were enough smaller dealers to help compensate for the absence of the big boys.
If you look at the history of the 1974-1980 coin market you will see that gold lead the move in coin prices. It started first and ended first. The coin market crashed about 2 months after gold hit its peak.
Gold therefore would be appear to be a leading indicator of the coin market.
roadrunner
<< <i>
If you look at the history of the 1974-1980 coin market you will see that gold lead the move in coin prices. It started first and ended first. The coin market crashed about 2 months after gold hit its peak.
Gold therefore would be appear to be a leading indicator of the coin market.
roadrunner >>
This was much more true in 1979/ 80 than it is today. Everyone had huge profits from the
huge run-ups and much of it went into the coins that were popular at the time; Morgans and
walkers. When the metals tanked it became a safe bet that coins would follow.
The run-up this time hasn't been nearly as large or the drop nearly as large. Dealers aren't
buying huge amounts of it from the public and flipping it at huge profits. The increases in mar-
kets have been fairly orderly. Many things are different this time. If any dealers are pulling in
their horns because of gold and silver prices then they are still liquid and just watching events.