If you’re new to investing in coins then you have a learning curve ahead of you. It helps to understand the factors affecting the value of the coins you’ve already invested in or that you’re considering.
First of all, you need to understand that value and price are two different things. The price of those silver coins from Golden Eagle Coins is what you pay the dealer for them and the value is what a dealer pays you when you sell them on.
Aside from that, here are the main factors affecting your investments.
The mintage
The biggest influence is the sheer numbers of a particular coin and their grades. The total supply possible depends on how many were minted within that year. In most countries, once a year is over, the dies with that year’s date stamp on are destroyed or retired, so the supply is fixed. However, in the early years of the US Mint, coin dies were used until they wore out, so some coins were produced the year after the year of the date stamp, even though they were recorded as being made in the current year.
The survival population
Once coins are minted, they go into circulation, with some being removed over time as they become worn. They go back to the Treasury to be reclaimed.
Of course, some coins disappear and are never seen again, so the coins that are left, saved by coin collectors and other people, are known as the surviving population.
The demand
Trends come and go where hobbies are concerned and if more people are taking up coin collecting then there’ll be more demand overall. There’s also trends within the hobby itself, with collectors looking for particular coin series and re-designs, for example.
The melt value
Coins made from precious metals have an intrinsic value, which can be quite high. A good example is pre-1965 dimes, nickels and half-dollars. They were made 90% silver until 1964 and changed to a mixture of copper and nickel in 1965. So, to collectors, a worn 1964 coin is worth more as silver than it is as a coin. When the price of silver rises, so does the price of these coins.
Grade and condition
Coin collectors like their coins to be uncirculated as this means they’re in mint condition – the highest grade. However, this means that they must have been removed from circulation immediately and stored for years. In the early days of the US Mint, hardly anyone collected coins and so uncirculated specimens from these eras are very rare. In the 1930s and 1940s, however, coin collecting became a popular hobby so there are more mint condition coins from these decades.
The dealer’s stock
The value and price of a coin is also influenced by the number of a particular coin that a dealer has in their inventory. If they have lots of 1931-S uncirculated Lincoln cents, then it makes sense to sell them at a reduced price to shift them. They’ll also buy them at a significantly lower price than you might expect, as they already have lots. Of course, if a particular coin is scarce, then the price and the value will go up. You should, therefore, always get several quotes from dealers before buying or selling.
Hubby has quite the collection of pre 1965 coins, a lot of people do. The fun par is now and again, you do still see them in circulation and when you find one, it is a thrill ! Collecting coins is n investment. Luckily here in town, we have a very good coin shop and the fella that runs it is quite well known. He can talk for hours about coins~!
This is not something I’ve ever considered. Old fogey, that’s me.
I know absolutely nothing about investing in coins. This is really interesting!
This is a great article to read and pass along to others. Especially about the part when you stated tjat when the price of silver rises, so does the price of these coins.
This is a great thing to think about when investing coins.
I’ve never thought about coin investing. I have collected coins from the different countries I’ve visited.