When will coin prices react to the falling US dollar?

DoubleEagle59

I think we all can agree that the US dollar has greatly decreased in purchasing power since approx the year 2000.

Oil has gone from $20 a barrel to a high of over $90 a barrel.

Gold, precious metals and base metals have increased drastically.

A lot of other areas such as collectibles, fine art have also skyrocketted.

Based on the chart below, there has been very little increase in coin prices from 2000 to 2007. What is everyone's opinions that coin prices will increase to 'offset' the fall in the US dollar.

ie a $2500 coin back in 2000 could get you 10 ounces of gold....now this same $2500 coin (perhaps has appreciated to $3300) can only buy a little over 4 ounces of gold. Wouldn't it be nice if this $2500 coin increased to $7850.00 (to reflect the drop in the US dollar)

homerunhall

Coin prices usually lag increases in gold bullion prices, i.e. coin prices lag falling dollar prices. Based on the history, I'd say that coins could do very well in 208/2009.

Also note that many coins, especially ultra rarities are way up in price in the past 5/10 years.

hrh

DennisH

Prices of better/rarer European coins already have.

messydesk

<< <i>Coin prices usually lag increases in gold bullion prices >>


Do they lag by more than the amount of time until the current Trading World Series ends? (Not that it'd help me much, anyway.)

Bear

When the rise happens it is generally with a great big whoosh.

It will be relatively fast , fairly steep and will be a big surprise.

I believe that HRH is quite correct. 2008 or 2009 will be the year.

itsnotjustme

There are great difference from metals and oil. These are global commodities, no different in China than the US than Italy. Being prices in dollars, we can see an increase in the dollar price that reflects a steady price in say Euros, Pounds, or Canadian Dollars.

US coin have a primarily US collector base. Since they are priced in dollars and the majority of buyers are dollar users, they will not reflect the same price swings. Yes, coins where a large percentage of their value is the metal will reflect metal price changes, but for 3 cent silvers, half dimes, seated dimes etc, that is not much.

291fifth

US collectors, except for those at the very top of the economic scale, are now very hard pressed to make ends meet due to years and years of overspending on credit.

The prices for the great majority of US coins are going to stagnate or drop. Price guides may not reflect this, due to the way they collect their pricing data. Liquidity will become a problem for anything that is not an exceptional coin.
Exceptional coins probably make up less than 1% of the total coins, but account for a considerably higher percentage of value.

Try selling some ordinary numismatic (not bullion) coins for cash and see what happens.

Wouldn't you like to know how many lots in those mega-auctions are really sold?

Bear

291fifth is correct in one way. Economics will accelerate the bifurcated

market. Thus PQ coins will be sought after and highly liquid ,while the

average dross , floatsum and jetsom ,will serve only as ballast and weights

on fishing rods. PQ will be the market and all the rest with the exception of

ultra rarities will be dead, dead, dead.

jdimmick

Thats exactly correct. The market that HRH and the others are referring too is the upper eschelon of buyers. Those folks are not nearly affected by current economic factors like the general collector. Just in the past 2 months, many local collectors around here have stopped buying, because they dont have the extra funds to spend with rising cost of gas, food, rent, and other necessary items. In fact, most of the coins I have been buying over the counter as of late have been from folks needing funds to get by.

Several of the other local dealers are experiencing cash flow problems also, they cant buy becuase they have limited funds. They are not turning the merchandise like they were a year ago. I dont complain, becuase it gets me referrals on larger deals as I am called to bail them out when they overspend. ((Just like yesterday, a local competitor of mine bought a collection and had to dive into his household savings to buy the collection, now he has to turn the merchandise so fast by listing it on 1 day E-bay auctions he leaves profit margin on the table.)

About the only thing selling good here locally is gold!! The headline's are getting folks attention who do have a money to spend.
The rising precious metal prices will push the bullion related material stronger, but if it were to turn around it would flatten /dip drastically along with the other general type commoner coins.

Go too your show and check dealer buying prices at shows for general stuff, and I think you will see a softening buying price for general numismatic items (non bullion related) at least arounf here regionally.