Allen Rowe: The rush of modern coins
For the Nevada Appeal
One of the largest segments in today’s coin market is modern coinage.
Mints from around the world are competing for consumer funds and the U.S. Mint is no different. Earlier this month national headlines were made when the Mint released the three-quarter ounce gold Kennedy half dollar.
On release the Mint put out limited quantities at its gift shops and at the American Numismatic Association convention in Chicago. Thousands of people showed up to stand in line for, in many cases, more than a day for a chance to buy one of the 500 coins released that day. Prices of these coins at the show shot from $1,240 (release price) to $3,500. But before the end of the show they were already back down to $2,300. Why?
The Mint did a calculated marketing ploy. It released an item that is not limited in mintage in a small quantity to create the perception of rareness. Then and today you still can go online and order one for $1,240, so why the rush at the show and its gift shops? By only releasing a few to open the sales campaign people clamored to get them and then get them to the grading services so the coins could receive special labels designating them to this special release. By creating a perception of rareness the Mint has most likely increased sales for its newest product.
The Mint regularly puts new types of coinage as collectibles. Many of these coins wane in demand as the years pass, but a few increase in demand, too. One thing that is seen is there does seem to be an over saturation in the market of mint made products. On the secondary market we often see older mint products falling in demand and ultimately in price, too. In my experience I would have to say most mint products are headed that direction. There are exceptions, the American Silver Eagle program is one of the most highly collected series in coinage. Many of the limited releases in this series have done well.
If you are collecting modern coinage the grading becomes a big factor. Factors are which grading service, grade (most are 69 or 70), and even special labels. Let us look at the 2009 Ultra High Relief $20 gold coin. In the market I see coins priced as follows: $2,300 in original box, $2,350 in a PCGS69 gold foil label, $2,895 in a PCGS69 First Strike label, $2,890 in a PCGS70 gold foil label, $3,450 in a PCGS70PL gold foil label, and $18,995 in a PCGS70PL First Strike label. On top of that there are other special labels which are varied in price and NGC coins have just as complex a spectrum.
When it comes to collecting modern coinage there is one factor we have not seen — time. Nearly every coin made will most still likely be in its perfect or near perfect state due to immediate preservation today making them just as available in the future. This is the biggest difference in the coin collecting realm. Many of the classic coins collected today were made as money with the intentions of circulating. Even specially made proof coinage was not preserved well in many cases. Cleanings, fingerprints, exposure to air (toning), and being stored improperly have impaired many of the coins made 100 years ago.
It would be interesting to see what the demand for these coins are like in 100 years. What people are collecting can drastically change over the years. If we just look at modern proof sets we can see a glimpse of this. In the 1970s and 1980s proof sets were the hot ticket. The mint sold millions of them from $5-$11. During the 1990s and early 2000s the prices of these sets climbed with demand. But starting in about 2008 that shifted. Today many of these sets are bringing only a few dollars each. This could change, but it may also be an indicator for the future of modern coinage.
Allen Rowe is the owner of Northern Nevada Coin in Carson City.