I’ve just come off the road, having attended four coin shows (Long Beach, Las Vegas, Santa Clara and Santa Rosa) in as many weeks. Coin shows present an outstanding opportunity to gauge the mood of the public, and to exchange information, observations and experiences with other rare coin dealers.
What makes this four week period exceptionally fascinating is that it corresponded with approximately a 10% drop in the price of precious metals: about $100 per ounce in the price of gold, and about $2 per ounce in silver.
Coin show attendance by the public was also sparse. It is impossible to know for sure if the drop in metals prices caused the lack of public patronage, but that seems likely. Some dealers speculated that it had to do with general public disgust with the state of affairs in the US and the ineffectiveness of US foreign policy, or a feeling of uncertainty about economic conditions in general, including fears of a stock market crash, or even the upcoming election.
And yet, some dealers reported strong on line purchasing by their customers. Whatever the case, the drop in precious metals prices presents an excellent buying opportunity.
One patron at the Las Vegas show – who bought up all the junk silver and close to bullion price BU rolls of quarters and dimes he could find - told me that he was shocked that there were not more buyers. Logically, that is surprising, but psychologically, it is not. Time and time again, I notice that when metals (or coin – or stock or real estate) prices are soft, people hold off buying. However, rising prices seem to bring out the buying public in force.
Maybe the public is simply afraid of missing out on a rising tide?
That attitude comes from short term thinking, where the goal is to generate maximum short term profits. The physical rare coin and precious metals markets are not typically short term markets. Thus, for long term accumulators, the best long term results are generally achieved by purchasing when markets are soft and prices are low.
Take a look at your long term plan. What do you want to have in your vault 10 or 20 years from now? If you are short of your goal, take advantage of the price drop to stock up. This is especially true for precious metals, but it is also true for rare coins.
Contrarian thinking is a true benefit in this kind of market.
P.S. My article on Rare Coins and Investment was featured in the September issue of the Las Vegas Coin Journal. These journals are a great way to build your knowledge base about Rare Coins. Please let me know if you would like a copy of the article