Bullion Trends Down While Numismatics Hold Strong

Tuesday, December 10, 2013 11:19:45 AM America/Chicago

If you’re a novice metals investor, or even if you’re just attempting to choose the best option for your next purchase, it’s important to note trends in the industry, and in particular the shift away from bullion and toward numismatics.

Fundamental Differences

First, it’s imperative to understand the key differences in these two different types of coin. A bullion coin is one that’s purchased for reasons including investment, as a hedge against inflation, and for use in case of an economic collapse. The weight of a bullion coin is typically measured in ounces, and new bullion coins are produced by the U.S. Mint each year, as well as private mints which produce rounds and bars in 1oz, 10oz, kilo (32.15oz), and 100oz varieties.

A few of the top bullion coins include the U.S. Gold American Eagles, Silver American Eagles and Platinum American Eagles, along with the newly minted Gold Buffalo series started in 2006. 

By comparison, a numismatic coin is a collectible item that’s no longer produced. Rather than being valued for their metal, it’s their rarity and historical value that’s important. Most numismatic coins draw in a higher price than what their metal content would indicate. Examples of popular numismatic coins include Pre-1933 U.S. Gold and Silver, including $20 Gold Liberty Coins, $20 Gold Saint Gaudens Coins, $10 Gold Indian Coins, $5 Gold Liberty Coins, $3 Gold Princess Coins and the Peace and Morgan Silver Dollars. There are even many coins that do not carry any real precious metal value like Shield Nickels, 3 Cent pieces, and Copper coinage that can bring in the thousands of dollars in pristine collection.

The reasons for buying coins are what lead people to opt for one type over the other. For example, are you seeking coins as a way to protect your future, or as a way to create a historical collection?

The Trends in Bullion vs. Numismatics

In the years following the Great Recession, bullion coins saw a tremendous uptick, because of fears of inflation and economic uncertainty throughout the world. People began investing in precious metals, in its physical form, ie. 1 troy oz Gold American Eagle Bullion coins, 1 troy oz. Gold Bars, 10 troy oz. Gold Bars, Kilo Gold Bars (32.15 troy oz.), 1 troy oz. SIlver Bullion coins known as the Silver American Eagle, 10 troy oz Silver Bars, 100 troy oz. SIlver Bars, 1 troy oz. Platinum American Eagle Bullion coins, Platinum Canadian Maple Leaf Bullion coins and 1 troy oz. Platinum Bars which are generally considered a safe haven, and while it’s possible to invest in metals via the stock market, most investors preferred the security of possessing the metal. Tangible, Hard Assets are a must in the economic climate. Bullion Coins and Bars are one of the easiest ways to invest in metals.  In the past 15 years, the price of the white and yellow metals (Gold and Silver) rose over 500%, and many investors were scrambling to gain access to as much bullion as they could afford. In the last 3 of those 15 years, the metals have seen a 25-50% decline. Gold now at an astounding $1190/oz and Silver with its head just above water at $19.25/oz. leaving many wondering if the next big run is just ahead.

Recently, however, there has been a shift away from bullion, as we’ve seen a dip in the prices of gold and silver. Many investors have strayed away from metals in lieu of equities, and that’s meant a big change in the coin market. 

The stock continues to watch the Fed’s actions closely, as well as economic data, to search for signs of inflation, but inflation is holding steady for now, so what’s become the preferred choice for investors and collectors alike is the numismatic coin.

There’s been a significant rise in wealth for the top earners in the U.S., and many of them are competing to get access to the most sought-after numismatic coins, which has left them even more rare and difficult to find. 

It’s not just the U.S. market—foreign investors have also become heavily involved in numismatics, making it seem as if these coins are simply disappearing altogether. What’s appealing about numismatics for many buyers is that their value doesn’t hinge on the value of metals—it’s irrelevant to how much they could bring in, so they’re a safe long-term investment.

For a selection of the finest numismatics, browse our extensive collection. It’s also important to note that while bullion may be on the back burner for now, it’s likely to experience another big resurgence, particularly amid fears of inflation, so regardless of the investment route you choose to take, coins guarantee a solid safe-haven investment and that is why we recommend a diversified portfolio consisting of a balance between Bullion, Generic Pre-1933 Gold, and True Rarity (Numismatics) depending on your investment or collecting goals.

For more information about this blog post and to dicuss bullion trends versus numismatics, please call Liquid Bullion Coin and Collectibles at 1.888.522.2283 or email us directly

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