Is It Time to Buy Coins?

Is It Time to Buy Coins?

2007 Burnished American Silver Eagle
2007 Burnished American Silver Eagle

“Is it time to buy coins?” This is a question always on the minds of coin collectors.  And, when a person has that initial interest, if the coin that catches the eye is a silver coin, that question should come up.  Right now silver, gold, and platinum are relatively low in cost in the United States.  Why?  And when will this change?  If we could answer the second question we would have our answer to the initial question.


The value of precious metals is determined by a multitude of factors.  At best we can look at some of the factors, and maybe determine if it is time to buy coins.  At least we can answer the why question.  And that can help with the deep understanding of timing in buying coins with precious metal content.


Precious Metals Value

Precious metals are commodities, so there is movement in value based on supply and demand.  The jewelry market is obvious as a user of precious metals, but industrial use is also a driving factor.  And, since the precious metals trade internationally, supply and demand are measured worldwide.


Another thing to consider is that some people invest in precious metals.  But, often there is a limit to the amount of money available for investment.  This causes the value of precious metals to change in response to the desirability of other investment forms, such as stocks and bonds.  The same money cannot be used to purchase stocks and also used to purchase precious metals.  So, the value of precious metals can fluctuate as governmental decisions that affect markets are made, such as changes in interest rates.


Still another thing to consider is the strength of the currency you are using.  Precious metals can be bought in a number of currencies, so their value must seek a trading point in various currencies.  If a currency is strong comparative to most other currencies, the value of precious metals can go down. The opposite is true for a weakening currency compared to others.


Is It Time to Buy Coins:  Commemorative Issues

And Proof Coins

Many countries issue non-circulating commemorative coins.  Other coins such as proof forms of coins might also be included here.  Here, if the coins are from your country, consider the value of precious metals if the coin’s price fluctuates.  Some prices at the mint may not even use precious metal value, but a pre-set price.  But, if you are buying from a foreign mint, the coin is priced in the currency of the country that is selling the coin.  It is possible to buy a coin in a foreign currency using less of your country’s currency the currency being used is strong comparted to the currency of the other country.  Just as true is when your country’s currency is the weaker of the two the price to you may be higher.  So, there are multiple factors to consider.



Is It Time to Buy Coins:  Bullion

Bullion Coins Are Collectible

Bullion coins are being issued at a high rate, and mints are putting effort into their design.  These are becoming important in numismatics, or so it seems.  Here, the value of the precious metal is most of the cost of the coin.  And, as the value of the precious metal changes there is a likelihood that the value of bullion coins will change as well.  As a percent of the investment, bullion coins often change in value faster than other types of coins.  There is an opportunity to see a noticeable increase, or a noticeable decrease, in the coin’s value.


In time, a bullion coin can morph into a numismatic coin.  This happens if the supply of those available is low compared to the number demanded.  Lower mintage, and desirable subject matter, are important influences in possibly increasing demand.


Of course, there is no guarantee in the future value of precious metals, nor in numismatic values of any coin.



Collecting Circulation Coins

Collecting circulating coins is the least subject to fast movements in price.  Old copper coins are not collected for the value of their copper content.  And, a collector who collects coins of various types might even be more willing to buy old circulation issues with the budgeted amount to spend when precious metals soar in value.  This includes old coins that are no longer circulating, but once were.




The decision on answering the question, “Is it time to buy coins?” depends on your reason for buying coins, and the type of coins you are considering.   But, any decision can prove to be wrong in the long run.  There are two markets at work, the precious metals market and the numismatic market.  Just realize any decision is taking a chance that going a different route could be better when viewed with hindsight.


We have other articles at Black Spaniel Gallery.  We also have a coin and coin supply product line.


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