Numismatic Market Reports
2018 PNG Annual Numismatic Market Update
At the end of each year, the Professional Numismatists Guild (PNG) conducts an annual update on the Numismatic Rare Coin Market. The PNG estimates the U.S. rare coin market was over $4 billion in 2018. That was a significant rise from 2017, which was between $3.4 and $3.8 billion for auctions and direct sales, but not including sales by the United States Mint or bullion coins, such as gold and silver American Eagles. The U.S. Mint itself was responsible for about $3 billion of bullion and collectible coin sales. When factoring in U.S. and world paper money and bullion from other sources besides the U.S. Mint, the numismatic business in the U.S. easily exceeds $8 billion annually and is growing.
The finest known rare coins set auction price records, while easily available lower grade coins declined in value over the last year. United States rare coins selling for $50,000 or more, and those selling for $500 or less, generally did well during the last year. Four significant, historic vintage U.S. coins and three 19th century U.S. bank notes sold for $1 million or more each during the year in public auctions and several other U.S. rare coins reportedly were purchased for $1 million or more in private transactions.
Even though investment money that may have gone into numismatic purchases went into the booming stock market in early 2018, the overall demand for extremely rare investor-collector coins rose later in the year, and the rare coin market looks promising in 2019. With the stock market dropping during the fourth quarter of 2018 there was an increase in interest in the rare coin market with some people taking profits from stocks and buying coins that have proven to show sizable and consistent increases in value over the years, as well as buying precious metals.
Two auction companies, Heritage Auctions, and Stack’s Bowers Galleries, accounted for over 70% of the overall totals, with Heritage reporting the largest amount of U.S. coins sold at auction during 2018, was approximately $187 million. Below are the aggregate prices realized for U.S. coins sold at major public auctions over the last several years.
• 2018 totaled $345 million
• 2017 totaled $316 million
• 2016 totaled $342 million
• 2015 totaled $439 million
• 2014 totaled $536 million
• 2013 totaled $393 million
Source: PCGS 2018
Ever since U.S. coin collecting became a hobby, most coin enthusiasts have sought to complete, or nearly complete, a set of a particular type of U.S. coins. The scarcest and most desired coins in sets are the “Key Dates,” some of which have become legendary. “Key date” coins are coins in each series that are usually the most valuable, often the rarest and hardest to find. They tend to have higher price appreciation than their common-date counterparts. Key date coins are considered the “Blue Chips” of rare coins because collectors want and need those to complete a rare coin set, increasing key date value. The impressive higher grade “choice” key date examples are even more desired and more valuable than lower grade key dates.
Key dates and rarities should remain a focus for all high end rare coin investors. Because they are seldom seen in the market, those coins which are a key to finishing a set have tremendous appeal for collectors, regardless of their quality. Demand is always strong and, therefore, price sustainability and upward price pressure is present even when the overall coin market is soft.
A very common question for both coin collectors and investors is, “What coins should I buy?” All U.S. coinage series have certain dates that are difficult to obtain. For example:
- Low mintages or short run varieties
- Low survival rate in higher grades
- Mass meltings with low survivors
- Condition rarities, like poor strikings
- Mint errors, like double dies
- Uncirculated coins in higher grades
- Popular series/date that become scarce
Source: PCGS 2017
The prices for rare United States coins have risen dramatically over the past 50 years, and experienced collectors and dealers of these U.S. coins have known that values and prices for high-end U.S. rarities have outpaced the coin market as a whole and outperformed traditional indexes like the Dow Jones and the S&P 500.
In 2014 the Professional Coin Grading Service published a 44-year price history of the ten most famous United States Coin rarities. The PCGS “Ultra-Rarities Index,” is a price history index from 1970 to 2014. The results confirmed that an investment in any one of these notable numismatic iconic coins would have proven to be fantastic investment!
All ten coins were indexed to 1,000 as of January, 1970 and by October 2013, the composite index stood at 63,271.9, or an increase of just over sixty-three times (6300%).
Source: Whitman Publishing 2015
The “100 Greatest U.S. Coins” book, by Jeff Garrett, and published by Whitman Publishing, is one of the most popular publications in the rare coin marketplace. These top-100 coins are the greatest US rare coins to buy and own in the view of an esteemed panel of top numismatists and significant market-makers. Members of the Professional Numismatists Guild (PNG) were polled on which are the greatest U.S. coins. Each coin in this book was voted into place by leading coin dealers, researchers and historians.
There is a price history of The 100 Greatest U.S. Coins, from 1960 to 2015, which was the last publication date and fourth edition of print. The most remarkable results of this pricing history over 55 years is that these same 100 Greatest U.S. Coins that were valued at approximately $860K in 1960, were valued at over $170 Million in 2015.
Price History of the 100 Greatest U.S. Coins from 1960 to 2015.
• 1960 = $860,700.
• 1980 = $11,261,150.
• 2003 (1st Edition) = $66,135,000.
• 2005 (2nd Edition) = $90,935,500.
• 2008 (3rd Edition) = $140,073,250.
• 2015 (4th Edition) = $170,867,750.
Mark Salzberg, chairman of Numismatic Guaranty Corporation (NGC), notes that even though the 100 greatest U.S. coins are valuable, they’re undervalued in the broader context of rare collectibles. In the 2015 fourth edition, Salzberg stated, “The 250 highest prices paid for U.S. coins at auction total just less than $250 million in value,” Salzberg writes. “In context, that is a bit less than the sales price of the most valuable painting ever sold, Paul Cezanne’s The Card Players.”
Source: KFLII 2016
The Knight Frank Luxury Investment Index (KFLII), which tracks the performance of a theoretical basket of selected collectible asset classes using existing third-party indexes. Rare coins recorded a 13 percent rise in 2015, higher than 2014’s 10 percent expansion.
The value of rare coins exchanging hands in the U.S. alone was worth between $4-5 billion last year, estimated Stanley Gibbons Investment (SGI), the firm behind the Stanley Gibbons 200 Index that Knight Frank references. Investment-grade coins typically boast the potential to appreciate in value, irrespective of what’s happening in financial or precious metal markets, SGI explains on its website.
Numismatic rare coins returned 232% over the decade. In the long term, rare coins maintained its top-tier status in luxury investments, finishing second to classic cars over the last five years, gaining 92%. Over 10-years, rare coins finished in third place, with an increase of 232% in value. As incomes grow here and abroad, the future looks strong for rare coins and collectibles. As individuals in emerging markets become wealthier, Knight-Frank expects to see the number of coin collector’s increase as well. Rare coins represent a safe tangible asset investment and is a respected status asset that is highly desirable among the wealthy.
Source: Penn State 2014
The Penn State Rare Coin Study was a famous 35 year rare coin study (1979 – 2014) conducted by Dr. Raymond E. Lombra, Professor of Economics at Penn State University, and a consultant to the House Banking Committee of the U.S. Congress, the Federal Reserve System, the Congressional Budget Office, the Joint Economic Committee, Prudential Bache, Morgan-Stanley Dean Witter, the International Monetary Fund and the U.S. Treasury. This 35 year study extends several earlier studies prepared for the Joint Committee on Taxation of the U.S. House and Senate on the investment performance of gold and rare U.S. coins and is for the period January 1979 to December 2013. The analysis conducted by R. L. Associates, Penn State University, February 2014 focused on the longer run performance of gold and rare coins, both relative to each other and to the more typical array of traditional assets.
Asset Class Performance: High-quality coins and stocks had the highest returns over the past 35 years, despite the strong performance of gold over twelve of the previous thirteen years.
Average Annual % Returns:
• Gold Bullion 5.7%
• Treasury Bonds 8.4%
• Coins (all types-MS63-65) 10.4%
• Coins (all types-MS65) 12.2%
• Stocks 13.0%
Summary of Case Study Findings: In general, over the full 35 year period and the challenging 1987-2013 period, portfolio volatility is reduced by augmenting standard stock, bond and bill portfolios with small proportions of rare coins and/or gold. Over the last 35 years, high quality coins and stocks had the highest average annual returns. High-end rare gold coins can not only outperform stocks, but prove to be a great addition to an investment portfolio.
Numismatic Market Tips
Rare Coin Market Trends
Over the last few years the rare coin market has been considered soft, as prices softened and/or stagnated. They appear by long-term market participants to be undervalued. The market has been tough to read, but it clearly begun to show some life in the last quarter of 2017 and there has been at times an impressive increase in rare coins sales, followed by weeks of stagnation in sales. However, at the high-end of the market, there has been coins selling at record prices. This has been because several billionaires have entered the market and have discovered one of the best keep secrets of the financially astute, numismatics. With the stock market strength and real estate boom, as well as, the economy at all-time highs, combined with low interest rates, affluent investors are looking to hard asset classes like rare coins. There have been incredible increases in net worth among the wealthy, and smart money has recently been selling-off their over-priced paper assets and buying underpriced tangible assets, like rare coins.
These wealthy collectors have found a fascination with the blend of history and economics that rare coin collecting offers as a storage of legacy wealth and personal enjoyment. Their timing couldn’t have been better, as over the last several years a number of historic numismatic collections have hit the auction blocks, with coins that have been hidden away for generations. Several of these billionaire collectors have invested well over $100 million in their world-class collections. They can afford to spend more money on individual coins than an average collector could spend in a lifetime of collecting. And they are not just buying million-dollars coins, they are employing market strategies to actively build sets of United States, World and Ancient coins that will appreciate in value over time. They want the finest known coins available and will spend whatever it takes to own them. Plus, these billionaires are very competitive with one another and they want to have the very best sets in the set-registry programs. These serious collectors love the competition and recognition that set-registry collecting provides.
These individuals think that rare coins today are an underpriced asset class that is tied directly to financial history. When world-class art often sells for hundreds of millions of dollars, million dollar coins struck in precious metals, seems like a bargain to these affluent collectors and investors. Coupled with surprisingly low rare coin prices seen at auctions over the last few years, it seems like now is a good time to acquire these rarities. For example, the finest known 1913 Liberty Nickel sold at auction recently for around $4.5 million, however, it last sold for $5 million over ten years ago. Another example is the recent discovery of an 1854-S Half Eagle that generated tremendous press, but the coin sold for just a little over $2 million, well below what many Numismatists thought the coin would bring at auction.
The famous 1787 Brasher Doubloon, insured for $10 million was recently sold in a private transaction. The Doubloon was the first American gold coin, struck by the silversmith Ephraim Brasher, George Washington’s New York City neighbor. The terms of the sale remain confidential, but you can imagine that someone with great wealth now owns the finest known example of this icon of early Americana and the world’s most valuable coin.
Why the Financially Astute Buy Coins
Why are the financially astute spending their hard-earned money on coins? It’s no secret that the financially astute have a serious interest in protecting their wealth and growing their money over time. Precious metals diversification is an important aspect of a well-balanced financial portfolio, and gold and silver coins are tangible assets that can play a critical role in asset appreciation and wealth management. There are many solid reasons why coins should be considered as part of a financial portfolio. Precious metal coins are often used as a safe haven asset to add security and preserve wealth.
Throughout human history, gold and silver coins have been coveted and collected for thousands of years. Often referred to as the “Hobby of Kings,” it’s been said that rare coins are the best-kept secret of the financially astute, and have historically been an important part in the financial portfolios of America’s elite. The prices for rare coins have risen dramatically over the past 50 years, and the values and prices for high-end U.S. rarities have outpaced the coin market as a whole and outperformed many traditional investments over time.
Which Rare Coins to Collect?
The gambit of U.S rare coins spans 141 years, from when the U.S. Mint Act was signed by President George Washington in 1792, which was the beginning of our Nation’s first official coinage… to the Gold Recall Act, signed by President Franklin D. Roosevelt in 1933, making it illegal to own gold, except for rare and collectible coins. There are many U.S. rare coins available for any budget. Below are just a few of some popular old coins.
Click the image below to learn more about popular U.S. rare coins to collect.
Timing is Everything When Buying Rare Coins
The recent volatility in the equity markets have served as a reminder how uncertain leveraged markets can become when negative sentiment sets in. It also reminds us that when equities slide it often translates into support for metal prices. This recent reminder send gold spot prices and gold shares soaring with little inflows of significant cash. This should be viewed as a strong reminder that instead of being dragged lower by a sliding stock market, the precious metals sector should soar if a sustained stock market drop prevailed. As I stated in my report earlier this year, I believe stagflation remains a real risk as time rolls on. If I am correct, the timing to purchase rare coins and precious metals appears to be now due to the weakness over the past three years.
There are many good reasons to look to rare coins as a store of wealth. Collecting rare coins is one of the oldest hobbies with the first coins dating back nearly 3,000 years ago and it is often referred to as the “Hobby of Kings.” Today, collecting rare coins is both popular and affordable, with a wide range of collectible rare U.S. coins suited for any budget. Below are some good reasons to consider acquiring rare coins now.
Market Size: The history of the U.S. rare coin market began from humble beginnings in the mid-19th century and has steadily developed into a 21st century numismatic market with annual sales in excess of $10 billion.
Collector Base: The rare coin market has strong and stable collector base, estimated at over 35 million people who have interest in collecting rare coins and currency, which continues to create consistent demand.
Portfolio Diversification: Rare coins provide diversification as a tangible asset‚ and creates a hedge against inflation. Unlike stocks and other paper investments, rare coins will always have an intrinsic value, as well as, collector value. Its asset value is not encumbered or dependent upon a promise or ability to perform.
Liquid Asset: Rare U.S. coins have high liquidity and have become one of the most liquid collectibles due to independent grading by PCGS and NGC, with documented population reports and rare coin price guides.
Asset Affordability: Truly classic U.S. rare coins can be acquired in all budgets, from copper to silver and gold. There are many various types of old coins in many different grade conditions to fit almost every budget.
Private Ownership: Rare coins enjoy no governmental IRS reporting requirements or confiscation concerns. Rare coins struck before 1933 can be safely owned without reporting and are a private storage of wealth.
Tax Simplicity: Rare coins are desirable as a management-free investment that doesn’t require market reports and complex tax statements. There is no annual asset taxation and can only be taxed once profits are realized.
Easily Transportable: Rare coins are very portable and can be carried in your pockets, or fit into small boxes. Substantial wealth can easily be stored securely or transferred anywhere confidentially.
Enjoyable Asset: Rare coin collecting is fun and can be a great source of enjoyment, plus rare coin investing has been an appreciating tangible asset, which has shown steady growth over the centuries.
Rare Coin Collecting Criteria
Rare coins are tangible time machines that can take you back to a moment in history. Every coin tells a story, it’s like holding history in your hands. They tell stories about the social and economic issues prominent in the times in which they were minted. Countless provide images of those figures who were rulers, both kind and cruel. Literally portraits of historical figures such as Julius Caesar, Cleopatra, and countless others adorn thousands of coins over the past two plus centuries. Rare coin collectors are custodians of numismatic, social and economic history. Rare coins were minted long before any of us today and will live on for future generations to explore. While these little treasures are old, not all coins are “rare.” Old coins have many important attributes that makes them rare, here are just a few…
Rarity: Rare coins are usually in high demand over common coins, due to low mintages or limited numbers of survivors. Very few modern coins are rare. Prices of true rarities with popular demand have shown impressive value increases over time and often outperform other asset classes. Population and census reports offer fairly accurate data in determining the rarity of a coin’s survival rate.
Value: Rare coins have shown impressive value increases over time. The spectrum of values for rare coins can run from hundreds to millions of dollars each. A good rule of thumb is to purchase the finest quality coins that one can afford. This strategy has proven to provide the highest increases in value in the long run.
Condition: The vast majorities of rare coins are in good quality condition. Standardized coin grading from the two top tier graders, PCGS and NGC, take the guess work out of personal opinions. With rare coins, usually, the higher the grade, the higher the price.
Beauty: The aesthetics of eye appeal involved in a rare coins’ greatness are apparent, as they are often considered pieces of monetary art that are sealed forever in precious metals. The intricacy of the design, strike, color, toning and overall beauty, determine value and appeal of every rare coin.
History: Rare coins are tied to moments in history and have great stories to tell. Many rare coins have an important provenance from previous owners, or are wonderful treasures from famous hoards or shipwrecks. Historically significant rare coins with a pedigree or story to tell are always in demand due to their rich history.
Popularity: Rare coins that have mass appeal and strong demand, tend to have long-term sustainability and good potential for price appreciation. Collectors should seek out those rarities that enjoy rarity, popularity and historically significant stories or images. By employing this trilogy as the blue print for an acquisition a collector is putting themselves in the best position for the value of their holdings to increase over time.
Set-Building, the Key to Rare Coin Collecting
When collecting old United States rare coins, the key is to purchase the highest quality coins one can afford. There are many different denominations, coin types, and rare dates that qualify as investment grade quality rare coins. There are a variety of ways in which to collect rare U.S. coins. Below are seven of the most popular and interesting ways to assemble a rare coin collection for the novice to advanced collector when building sets of U.S. Rare Coins.
- Collecting Denomination Series: Many rare coin collectors endeavor to build complete sets of within a specific denomination or design types of rare coins, such as $20 gold Double Eagles or Morgan Silver Dollars.
- Collecting Variety Type Coins: Some collectors wish to acquire just one nice example of each rare coin in a specific series by coin variety type, like Double Eagles in Type-I, Type-II, Type-III and Saint Gaudens varieties.
- Collecting by Die Variety: A more advanced way to collect types is by different die varieties. When old cracked dies became too warn, they were replaced, creating different die varieties, some which are very rare.
- Collecting by Mint Marks: Rare coin collectors often collect coins by mint location, like Philadelphia, New Orleans, San Francisco, Denver and Carson City. Building a mint-set within a date or series is very rewarding.
- Collecting by Date: Assembling a date set of rare coins from a specific year or era, like the Civil War, can be quite exciting. A carefully assembled, well-matched date set is highly desirable within the market.
- Collecting Proofs: Collecting proof coins is at the top of rare coin collecting, because they were minted in small numbers on specially polished dies. Building high quality proof sets, particularly dates prior to 1900 can be challenging and rewarding.
- Collecting Specialty Sets: There are some fun specialty sets that rare coin collectors assemble by personal preference. Some popular sets are a shipwreck treasure sets, Gold Rush sets and a Civil War sets.