Numismatic Coins:
Numismatic coins are valued on their collector value rather than the intrinsic value of the metal weight. The coins are predominantly coins that were minted for use as currency. Due to the fact that many of these coins were used as intended, the remaining supply of coins that exist in a virtually pristine condition is very small. This small supply of coins is sought by the many worldwide collectors which establishes a classic supply/demand scenario.
Unlike bullion coins, numismatic coins are not valued based on the amount of the precious metal contained but solely on the price that a willing buyer will pay for the coin in a open competitive bid system. This is much like the art market where paintings sell to the highest bidder; however, the rare coin market is more highly organized with established prices for coins that are independently published on a weekly basis, in addition to having a worldwide computerized bidding network called the Certified Coin Exchange (CCE).
The coins are priced based on their individual characteristics, such as date, mint mark (the city where it was minted), type (such as one cent pieces, nickels, dimes, quarters, etc.), metal (copper, nickel, silver or gold), rarity and condition. Numismatic coins can be sold either by auction or through the wholesale network. The table below provides a vivid example of value differences for a one ounce American Eagle bullion coin (based on spot price of gold of
$1254.34 and a 1913 $20 St. Gaudens (also containing approximately one ounce of
gold, both certified by PCGS).
Coin
Date Composition
Condition Population
Price 2/28/17
American Eagle All
91.67% Gold Any
3.6 Million $ 1326.89
$20 St. Gaudens 1913 90.00% Gold
MS64
71
$ 6250.00
$20 St. Gaudens 1913 90.00% Gold
MS65
4
$62750.00
Notice the significant increase in price for the $20 St.Gaudens with a 1
point increase in the grade from MS64 to MS65
Semi-Numismatic Coins:
This category of coins are for numismatic gold and silver coins that are very common and priced with a dominant emphasis on the metal value of the coin rather than the collector value. These coins are either very common or in very poor condition or both. For example, using the 1913 $20 St. Gaudens in a poor condition of "Fine -12", this coin sells for only
$1640. This is slightly more than the price for the American Eagle. Common examples of these coins are low quality $20 U.S. gold pieces, common foreign gold (Russian 5 Rubles, German 20 Marks) and common silver coins usually traded in poor condition.
"Junk silver" bags contain a face value of $1000 of silver coins than contain either 90% silver or 40% silver in their composition. The 90% silver sells for
$14800 and the 40% bag sells for $2104 (based on silver spot at $18.41 per oz.)
The semi-numismatic coins are popular for several reasons. When numismatic coin values increase rapidly, these coins historically tend to increase more than pure bullion coins. In 1933, when gold bullion
ownership was restricted by the U.S. government, “coins of special interest to collectors” were exempted. In such a similar scenario, buyers of U.S. numismatic coins could profit from the potentially dramatic price increase due to the demand placed on these coins. The premium paid for this added security is a small percentage over the price of a standard bullion coin. Semi-numismatic coins are only sold via wholesale outlets since there is no collector demand to make an auction liquidation profitable.
These type of coins are not recommended for investment purposes for bullion
holding due to the premiums charged being much higher than standard bullion
material. For rarity, these coins are not candidates for investments.
|
|
|
