2011 has been an interesting year so far and in many cases coin prices for quality rare pieces have exceeded expectations at auction. Many collectors have placed their coins in auction believing that they can secure much higher prices rather than listing them on eBay. It has to be remembered that auction houses charge a commission which has to be deducted from the final selling price. eBay has clearly suffered as a result and there are very few sellers on the site this year selling quality coins. eBay's proposed increase on their 'Final Value Fees' from 1st May 2011 will also have a negatory effect on coin dealers who operate on the site as the fees will increase from 5% to 10%. This coupled with Paypal fees (many UK buyers still use Paypal as they feel secure in using this method) will mean overall some 15% of a coin's selling price will be eroded in just fees. Postage costs have also increased too in the UK.
The problem most dealers have encountered this year has been the huge shortage of quality material. Precious metal prices continue to surge with the global economic problems, particularly the US which has a debt crisis and is owing some $14 trillion. The unrest in Libya and governments using Quantitive Easing (printing money) have acted as a catalyst for the metals. In addition to this, the 'Eurozone Crisis' has added fuel to the flames and in particular Greece which has major debt problems. Many are saying that we are on the verge of a more serious economic crisis than was once thought and that the US dollar could lose its status as a reserve currency. If this happens then it could turn out to be a global economic meltdown.
The gold price has reached a brief new all-time high of just over $1,900 in early September 2011 (back down to $1,775 as at 16 November, 2011) and the price of silver has more than doubled to over $40 (almost an all-time high in dollar terms - the metal's last high was $49.45 on 18 January 1980 when the Bunker Hunt brothers attempted to manipulate the market) as many believe the metal is undervalued. There is also continued concern from many that the silver market has been manipulated (notably the bank J.P. Morgan has been accused of this) as each movement upwards appears to result in a counter-movement downwards i.e instant profit-taking, caused not by physical buying or selling but by ETFs (Exchange Traded Funds). More importantly, the AU/AG ratio has dropped from around 60 to 44. This ratio reflects the number of ounces of silver required to purchase one ounce of gold. These high prices are clearly underpinning the numismatic market. In a recent Spink auction record prices were achieved for many hammered gold coins, some fetching more than three times their estimate. This would have been unheard of just five years ago.
Dealers' lists this year have been sparse with Spink cutting down the issue of its popular Numismatic Circular from six copies a year to five.
It is hard to predict where the coin market will go in 2012 although we can be almost certain that top quality rare pieces will continue to command high prices as ever. As prices remain very high many collectors are seeking lower grade pieces i.e. in EF and even VF condition at more affordable prices. This is also true of the people's demand to invest in silver as opposed to gold. Silver still remains relatively cheap compared to its more expensive counterpart and many are finding gold to be unaffordable at around £1,125-a-Troy Ounce.
Sovereigns and krugerrands are again in big demand with sovereigns scrapping at £265 and krugerrands selling for £1,250+. Demand is also strong for quality George III guineas as well as George III, George IV and William IV sovereigns.
Meanwhile, most bronze and copper coin prices remain very high with the penny market remaining strongest. We have noticed the halfpenny market as being unusually weak this year with many pieces failing to fetch anywhere near their book value. Milled silver too remains strong at auction with maundy sets being in strong demand. Many have argued that the Spink 'Coins of England' valuations for Maundy money has been undervalued for years.
As the year progresses, we shall update this guide with any further developments.