Many investors have a common complaint: high-end, rare coins are ever-increasingly difficult to find. Many people seeking the opportunities of purchasing a high-end coin are extremely disappointed with the availability, and have differing views and theories on why they’re so difficult to find.
Collectors and investors who frequent shows generally share their concerns that while the low and middle grade coins are found in abundance, and at relatively low prices, the high-end options are nowhere to be found.
The High-End Coin Theories
One of the most accepted theories about the difficulty in finding high-end coins is the volatility in the prices of gold and silver. Typically, when the precious metals market displays a high amount of activity, investors tend to hold on tightly to their high-end coins. It can be a challenge for investors and collectors to appropriately adjust the spot price of rare coins when there’s a lot of movement, so rather than try, they tend to hold on to them until the volatility subsides.
With that being said, the price of gold and silver has been held relatively steady during 2013, which dispels the theory of volatility.
Another reason it may be that rare coins are so difficult to find, but also so sought-after right now is because the wealth of the high-end investor has grown tremendously, creating more purchasing power, thereby removing these gems from the market.
Forbes magazine recently estimated that the richest 400 Americans have wealth that starts at about $1.3 billion dollars, which has sent the demand for high-end rare coins soaring. With the exponentially increasing purchasing power of these extremely wealthy individuals, there’s little room for other investors to enter the high-end market.
The International Impact
It’s not just American investors who are part of the rare coin market anymore—international investors are also seeing huge increases in affluence, and they’re taking that wealth and becoming a competing force in the high-end coin market, further reducing the supply and making these coins seemingly disappear, while in actuality, they’re just being held onto by investors from throughout the world.
It’s not just that a few people have a much greater level of purchasing power—another contributing factor to the inability to find rare coins lies in the techniques of investors and collectors. In the past, most collectors focused on building just that—a collection. Now, it’s all about possessing a few of the most sought-after coins, which means a significantly smaller pool of available coins of certain types. This competitive pressure contributes to not only a lower available supply, but also big increases in prices.
The Future of the High-End Market
With a variety of economic factors at play, including the potential for hyperinflation and deficit increases, most industry experts don’t predict the high-end market will show any signs of slowing down in the coming years. With the limited concentration of wealth, and increasing competition from overseas investors, it’s not likely that high-end coins will make a reappearance any time soon.
Despite the difficulty of locating rare coins, we do have a vast selection of options, although we don’t anticipate we’ll hold on to these high-end options for long. We encourage investors to take advantage of any available high-end coins, before the limited supplies and competing buyers makes this an impossibility.
For more information about this blog post, please contact Liquid Bullion Coin and Collectibles at 1.888.522.2283 or contact us via email.