US Coins

Editorial Opinion: Looking at a healthy future for the rare coin auction market

As auction houses work to fill an increasingly busy and competitive auction calendar, they are as dependent on sellers willing to put their coins on the auction block as they are on buyers willing to bid.

Old collections especially provide fresh material for the market to absorb, but these old collections are getting fewer each year.

Take the example of Eric Newman’s collection that was sold in April at the Central States Numismatic Society convention, where the fresh-to-market coins regularly exceeded even optimistic pre-sale expectations.

The rare coin market is hungry for good material. Yet, the problem of market scarcity is much more pronounced in other areas, such as the fine art arena.

Souren Melikian noted the problem in a June 21 New York Times piece where he described the challenges of leading international auction houses Christie’s and Sotheby’s to put together great Impressionist and modern paintings auctions. He asked, “How will the field perform when the ever-thinning supplies get down to just a few pictures tumbling into the market at distant intervals?”

He notes that one day in the near future, the supply of top quality paintings coming to market in certain categories will evaporate.

“At that point, making estimates will become problematic because relevant points of comparison will be far and few between, or altogether lacking. Worse, interest in Impressionist and early-20th-century avant-garde movements will evaporate.

“A certain pace is necessary for buyers to remain visually familiar with the works, and this in turn is indispensable for them to feel tempted to bid.”

Great coins coming to market can lift the rest of the coins in a sale. Fresh, quality coins ignite excitement in bidders, or as Melikian writes, “When genuine collections formed over a long period turn up, buyers react like wanderers in a desert with parched throats stumbling upon a deep well.”

Thankfully, the supply of coins is not generally diminished by museums that are actively building permanent collections nor is the demand base shrinking for great coins. Both of these are good, long-term factors that support the rare coin market.

Further, unlike the paintings market — where major auction houses are conducting an increasing number of sales via private treaty rather than at auction — the rare coin market seems to be more reliant each year on auctions as a way to market coins.

As collectors get more comfortable buying at auction, and dealers use auctions to sell inventory, the rare coin auction market — unlike sectors of the painting market — seems to have a healthy future.





Steve Roach

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