Rare Gold Coins Return 39.4 Percent on Investment, But Timing Is Everything

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GPA for Coins (GPA) reports that the certified coin market has shown overall strong growth in 2007, but median prices are where they were in the first quarter of 2006. However, the total gold coin segment has shown strong median prices steadily increasing to give a return of almost 40 percent for those who purchased in the first half of 2005.

 

Bob Green of Park Avenue Numismatics agrees: "It is clear that the rare side of the market continues to have support while the more common date material, dates easily obtainable in quantity, are slipping back to levels seen 12-18 months ago."

 

Like any other collectibles market, the perfect time for buying and selling comes down to timing. The second half of 2006 generally saw prices fall, and this was a good time to buy. Almost every coin category saw a large jump in median price paid in 2007, and anyone selling after 2006 purchases would have made an excellent return.

 

But as Bob Green notes, "It may also have a lot to do with simple supply and demand dynamics." GPA data shows that a much larger than average volume of coins was traded between July 2006 and Dec 2006, and this influenced prices at auction. It would appear the market can only bare so much volume before prices (even for the stronger-showing gold coins) begin to fall.

 

Bob Green continues: "Low population, rare date gold coins are constantly sought after by a growing number of collectors looking to complete series, and with so few available the markets should continue to climb to higher levels in this segment."

 

The U.S. rare coin market - consisting of an estimated 250,000 U.S. coins collectors/investors and a further 2 million "average" collectors - has an estimated trade of $10 billion per annum, providing lucrative opportunities for those well-informed.

 

With over 800,000 transactions, representing U.S. $1.3 billion, GPA is the world's largest repository of information available on publicly-traded certified coins, spanning over a decade. GPA provides an unprecedented level of information to collectors/investors on the prices realized for certified rare coins.

 

GPA is not a traditional price "guide," but a price reporting service, listing only actual prices realized in publicly accessible auctions. As Susan Headly writes in About.com: "…the prices in coin price catalogs are determined by coin dealers … the dealers who contribute to these coin price catalogs have a built-in incentive to nudge the prices as high as they can. Therefore, the short answer to the question, 'Are the coin prices in most coin catalogs accurate?' is a qualified 'No.'"

 

What makes GPA for Coins really exciting and instantly different from anything else available in the market place is that the data is interactive. As George Pantela, founder of GPAnalysis explains: "Via a web browser, you can set parameters of the data set you wish to interrogate and then customize the output. This can be as simple as drilling down to see individual prices paid for a specific coin, to an overview of the market as a whole. Want to compare median prices paid this year to the previous? No problem; our online toolset allows you to do this in a cinch." Additionally, subscribers of the service can permanently annotate individual coin sales, compare relevant coins to silver and gold price trends, and manage and automatically value their coin collection.

 

Jim Halperin, co-chairman of the world's largest collectibles auctioneer Heritage Auction Galleries, believes services like GPA for Coins are essential to the collecting community. "GPA adds a level of confidence for buyers and sellers, helping them make informed decisions when trading in an increasingly complex and expanding rare coin market," Halperin says.