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Author Topic: Price Increases Real or Illusion?  (Read 2871 times)

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Offline Virgil H

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Price Increases Real or Illusion?
« on: December 28, 2021, 06:21:41 pm »
Over the past year or so, I have both paid more attention to ancient coins in a variety of places and noticed that prices seem to have dramatically increased. Inflation in the US is at a 40 year high, so maybe that has something to do with it, but the increases seem higher than even the inflation rate, which, as the grocery shopper in my household, is killing us. Has anyone else noticed this? Or is it just my imagination and/or my being more tuned into coin sales than I was before? I hope this discussion is OK, I am not asking about specific coin prices. What I do know is that my budget is seriously being strained these days compared to, say, pre-Covid times. And I have been pretty amazed at what some coins have gone for in auctions and in fixed price listings. Is ancient coin collecting suddenly that much more popular? Or what. Inquiring minds want to know.

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Virgil

Offline Mat

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Re: Price Increases Real or Illusion?
« Reply #1 on: December 28, 2021, 06:33:33 pm »
Oh, prices have gone up on ancients considerably. I usually got 4-6 coins a month and this year I got a whole 24, which isn't much. Coins I could normally buy for $40-$60 are near $100 now. Many of us over on cointalk have had this discussion over and over this year. Many regular have cut back on buying too. U.S. coin collectors have noticed it too.

I still buy a coin now and then but I've moved onto my other 35-year long hobby, autographs. So far they actually have gone down for various reasons so good time to grab a few long-time wants.
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Offline Virgil H

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Re: Price Increases Real or Illusion?
« Reply #2 on: December 28, 2021, 06:57:15 pm »
Mat, thanks for your response, I guess I am not alone. With a few exceptions, I have moved into buying lots where I am getting more for my money, although I am sure there are cases where I am still paying too much. I do try to be selective and there are lots of downsides to lots. But, I also like attributing my coins, so that is a big bonus. Plus I am at a stage where I am still OK with getting common coins and a few duplicates and I am well aware than anything really valuable is not going to be found in a lot. To me, coins prices have gone up a staggering amount and that has coincided with me becoming very active in collecting. Kind of a bummer there. LOL.

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Virgil

Offline PMah

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Re: Price Increases Real or Illusion?
« Reply #3 on: December 29, 2021, 12:07:28 am »
Well, much sympathy with you.  My take on it, assuming you are also collectors in the United States:
 -- "inflation" has nothing to do with it.  The inflation rate of 6.2% in the U.S. (this morning) is based on industrial and retail transactions compared to which coin collecting has no market impact whatsoever. The entire numismatic market is a drip in a drop in the bucket of industrial bucket-making. I bought a dishwasher this year that was a "Choice Extremely Fine" denarius.  But, even so, the "hammer price" movement has far exceeded the US inflation rate.
-- coin auction prices have certainly moved with aspects of supply and demand, along with discretionary spending due to many other factors that reduced collateral expenditures for collectors, especially collectors whose life-expenditures have stabilized ("old timers").
-- Why? because, in part at least, many collectors have had to shift entirely to online purchasing.   Most "face to face" trading in 2020-2021 was not possible.  Some face to face collectors had been used to travelling and socialising at coin shows, as did the dealers, adding 10-20-even 50% to their cost of goods sold/acquired. (I certainly did.  I often spend a "nice coin" on transit, food and ... booze when I am at a show, and I only travel day trips on the U.S. East Coast).  Most retailers have resisted conforming their pricing to accommodate lower-cost items, because the actual inflation rate/interest rate, is practically still very low, so they can carry inventory in hopes of moving coins in various fora (no judgment in that; markets are markets, and some may disagree).
-- so, some collectors added their travel savings to their budget and bid-up online items
-- also, some sellers over-hyped the items they were selling, taking advantage of the lack of in-person comparison of items and new collectors who have no comparison basis (a return to the pre-internet days);
-- some buyers had to adapt to changes due to exchange rates, auction premiums, shipping, sales tax, and other expenses that were previously melded with face to face show sales.  Shipping, in particular, along with "Brexit" and other ill-timed big picture financial strategies, had an impact on numismatics; so, too, did auction premiums, which should have dropped in traditional economic terms, but did not.
-- finally, due to the pandemic, there seems to be a great deal of "YOLO" buying
Stay healthy and safe in the New Year, coin friends!
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Offline Joe Sermarini

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Re: Price Increases Real or Illusion?
« Reply #4 on: December 29, 2021, 03:44:59 am »
Prices have been rising the whole time I have been in business. This is not something new.
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Offline Ron C2

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Re: Price Increases Real or Illusion?
« Reply #5 on: December 29, 2021, 11:14:41 am »
I dunno.  I think it's pretty simple. If I see a coin at retail that I want, and I can afford it in my coin budget, I buy it. If it think it's more than I want to pay for that coin, I don't buy it. Often, waiting yields a better deal on the same type later on.  It's not like every coin has a standard price, and condition to a degree is a matter of the bias of the person pricing the coin. 

If I just *have to* pay market rate for a coin, I look for it at auction, as auctions represent supply and demand in their rawest form. About 25-30% of my coins come from the big auction houses, and I know I paid just one bid higher than anyone else wanted to pay for that item ;)

Prices have crept up a lot from what they were 20 years ago when I started out, but the increase depends on the genre, I find. The largest cost jump, from my experience, has been in gold coins - driven in part by a much larger gold valuation in general.
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Offline 77HK77

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Re: Price Increases Real or Illusion?
« Reply #6 on: December 29, 2021, 02:30:44 pm »
Prices have been rising the whole time I have been in business. This is not something new.

The increase over time with dealers has been a gradual expected movement but I have noticed some really, what I'll call black swan, swings at the auctions. If I'm looking at a more expensive purchased I'll track the coin type through several auctions and dealer sales to get a feel for where I might need to be. A process that's worked well for 20 years until 2021.

One example is a particular new style Athenian Tet. Watching the particular year I'm interested in It dropped previously between US$500-600 plus fees. Until the last two auctions when I thought of bidding.  both this year, both good coins but not spectacular, and it jumped to between 1,100 and 1600 USD - More than double. Is there a sudden surge in desire for New style tet's?

I've seen this same kind of jump in other area of my collection where a lesser quality coin is selling two or three times my expectation. However it doesn't seem uniform, like a group of collectors are driving a particular type. I suspect maybe misguided investments Don't know

Offline quadrans

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Re: Price Increases Real or Illusion?
« Reply #7 on: December 29, 2021, 03:24:23 pm »
In my opinion, the relatively higher price increase that has taken place recently
 has been motivated more by the fear of inflation. People are looking for some
good investment that will hold their value better in the long run. Antique coins,
gold, and silver were thought to be a good investment, so there was greater
demand, especially for rarer, more valuable as well as better quality antiques
and coins. This has shaped the current higher prices.

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Offline Kevin D

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Re: Price Increases Real or Illusion?
« Reply #8 on: December 29, 2021, 04:50:23 pm »
I agree with Quadrans ^^

It is the fear of what could happen, not the actual current anual inflation rate. Over my lifetime, the US dollar has lost %90 of its value when certain items are used as a gage (i.e. the house that cost $24,000 in 1963 is now well over $240,000). Sometimes it really is 'inflation', but at least as often it is the currency which has lost its value. A $35 ounce of gold is still worth an ounce of gold...there are more people in the world buying gold, but the supply has also increased along with the population. However, now the ounce of gold costs 1,800 US dollars.


Offline Virgil H

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Re: Price Increases Real or Illusion?
« Reply #9 on: December 29, 2021, 06:10:35 pm »
Thanks for the further discussion. I know it isn't simple. Regarding the officially calculated inflation rate in the US, I have always said it is incorrect (far understates true inflation) and I wasn't really blaming higher ancient coin prices on inflation, but it has to be a factor in some ways. I just know that in the past year or so, the coins in my low budget category basically no longer exist except rarely. So, I have raised my budget as much as I can. As an aside on the US inflation calculator, the house my parents bought for around $35K in 1965 is $800,000 now (they sold it in 1967). The brand new car I bought in 1975 for around $3k should cost $12K today with the inflation calculator.  You can't get a decent used car for that.

And, Ron, I totally agree, if I want it and can afford it, I buy it. How long I keep looking depends on both coin and price and that is different for everyone.

Regards,
Virgil

Offline SC

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Re: Price Increases Real or Illusion?
« Reply #10 on: December 30, 2021, 04:41:33 pm »
I would be surprised if any form of collectibles - from things like coins or stamps or hockey cards to "manufactured" collectibles like commemorative plates, or even traditional art - follow the normal inflationary curve.  It would be interesting to see it plotted out.

I suspect that there are in fact many inflationary curves - wages, consumer goods, food, real estate, etc. - but I wonder how closely the collectible market flows any of them.

Just as the challenge with tracking inflation in the ancient world is to find like stats - for example the price of a modus of wheat in different places at different times - it would be interesting to see the prices of specific and common coins tracked over time.  Say an Athenian owl tet, Constantinian campgate, Valentinian I solidus, all of the same grade.

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Offline Kevin D

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Re: Price Increases Real or Illusion?
« Reply #11 on: December 30, 2021, 05:33:54 pm »
 I agree, it is complicated and the analysis for one item is often quite different for another.  It appears certain though that fiat currency usually has much to do with 'inflation', i.e. in comparison to an event like the mid-19th century gold rush in San Francisco, where the currency value of precious metal was maintained, but prices soared anyway. That really was a supply and demand inflation.

The chart linked below might be of interest. It shows that the price of gold in US dollars remained quite stable for most of the 100 years (covered by the chart) that US currency was on the gold standard.

HISTORICAL GOLD PRICES - 1833 to Present
https://nma.org/wp-content/uploads/2016/09/historic_gold_prices_1833_pres.pdf

Offline n.igma

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Offline SC

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Re: Price Increases Real or Illusion?
« Reply #13 on: January 05, 2022, 08:26:57 am »
Great article. (No surprise knowing Robert.)

Shows the huge impact of "outside" factors - be them demand factors such as tax changes or supply factors such as changing international relations or metal detectors- on the ancient coin market.

The only thing I would disagree with is the "end of metal detecting" as an important factor.

In commentary I have read about the situation in Vietnam, there have apparently been three detecting "waves" so far.  In each case the same territory/fields are gone over but with increasingly better detectors.

I am no detectorist, but I have seen how much they miss during archaeological excavations I have volunteered with.  It was regular practice to use the detector in the grave as we were digging down.  Pings would mean there might be something close and we would switch from pick and shower to trowel and hand-spade.  What was interesting to me was how little penetrative power detectors would have in hard soil.  What turned out to be a complete 10th century iron sword didn't register at 1' depth in hard soil.

Many of us have seen stories like the channel island (?) hoard found by two guys using a very large advanced detector.  But I don't think these have been widely used yet.

My point is that I don't know what has occurred in places like East Europe, let alone central and western Europe.  Have advanced detectors been used?  Have we found all the coins?  Or are there potentially new waves to come with future generations of metal detectors?

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Offline okidoki

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Re: Price Increases Real or Illusion?
« Reply #14 on: January 05, 2022, 05:13:18 pm »
Detectors do not go very deep into the ground about 20-30 cm to pick up coins ect., it is not expected they will double in depth soon is my idea
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Offline Joe Sermarini

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Re: Price Increases Real or Illusion?
« Reply #15 on: January 05, 2022, 05:22:02 pm »
My point is that I don't know what has occurred in places like East Europe, let alone central and western Europe...

All of the wholesalers I know, all of them, are no longer in business. Their coins mostly came from Germany but most were probably found in Bulgaria. After the iron curtain fell and half of the east was unemployed, many people survived by metal detecting. I heard it was the primary occupation in some towns. Even then there were restrictions, but laws were largely ignored because people needed to eat. Today the flow has dried up probably because most of the easy finds have been dug up and because of increased enforcement of restrictions on detecting and exporting. This has certainly had an impact on prices.
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Offline Ron C2

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Re: Price Increases Real or Illusion?
« Reply #16 on: January 05, 2022, 05:40:21 pm »
FWIW, if you go on Netflix and watch old episodes of Time Team, you will see them using Geophysics machines that FAR exceed anything a hobby detectorist owns today.  In most cases, with advanced magnetometry, they don't pick up anything of real substance deeper than maybe a foot. 

When they excavate, in most cases, the original surface of the Roman era can be anywhere from 1 foot to 10 feet below grade in the UK.  In Alexandria, the helenistic surfaces are more like 20-25 feet below grade today.  Whenever these digs happen at Roman sites, "hoards" by the UK definition are invariably found that were not detected before shovels went into the ground.

I used to watch some youtube channels hosted by UK detectorists, and those fellows maintain permission on the same fields over a span of years.  As their gear gets better and the fields are re-plowed each season, they continue to find new artifacts, including coins, in the same fields.  In some cases those fields were once vibrant villages, outposts, intersections, temples, etc. where all the stone is robbed away - but humans lived there and lost coins for centuries before they fell into disuse.

The iron curtain's initial collapse may be gone, but new ancients enter the market every day, and that is likely to continue for a long time yet.
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Offline Kevin D

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Re: Price Increases Real or Illusion?
« Reply #17 on: January 05, 2022, 05:41:28 pm »
Interesting article on the ancient coin market.

I believe there are many factors involved in the recent rise in prices of ancient coins. One has to be currency devaluation and the fear of 'inflation'. Well to do people know what fiat currencies do over time...they continue to loose purchasing power. A single 6% jump (current annual inflation rate in the US) is not a big deal, but the fear of an inflation rate like this continuing over years is what drives the 'smart money' to buy hard assets.

I don't know when the linked article was published, but recently there has been what appears to be some large hoards entering the market. One was of Persian darics not too long ago. I don't know how many coins this was, but it was a substantial number.

Another was the large hoard of staters from Phaselis, adding many new varieties previously unknown. The first EF condition coins from this hoard to hit the market were selling for $5,000 US, as these coins had previously been quite rare. At the end of the run, nice EF examples had sold for under $1,000 US.

Recently, there has been a flood of Athenian tetradrachms on the market, depressing values of coins showing a 'full crest', which had previously been scarce.

There has recently been quite a number of early staters from Side and Aspendos.

A large hoard of early electrum 'bee' trites continues to be dispersed in the market.


Offline Virgil H

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Re: Price Increases Real or Illusion?
« Reply #18 on: January 05, 2022, 10:28:03 pm »
That is an interesting article that is also outdated to a large degree. It doesn't address more recent market changes at all because it is 8 years old. I disagree that metal detector types of finds are that much reduced. There are plenty of coins out there as yet unfound. As far as supply goes, my guess is that country laws have reduced coin availability more than anything to the extent that availability is actually causing the higher prices. I suspect it is not as much supply as it is demand that is making prices higher. The thing I wonder about is where exactly that demand is coming from. Just my thoughts here and speculation. As far as inflation goes, I can say that in the US, for the average person, that so-called official rate is killing us. The average person isn't buying coins. Purchasing power has become greatly reduced over the past few months for everything, including food and other essentials. And the rate is very understated, and I read that, as of the new year, they are changing how it is measured to make it appear less than it was before (which was also understated, LOL).

Virgil

Offline Joe Sermarini

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Re: Price Increases Real or Illusion?
« Reply #19 on: January 06, 2022, 07:19:12 am »
I suspect it is not as much supply as it is demand that is making prices higher.

I am certain this is not true for common late Roman bronze. Uncleaned coins used to be sold by the tens of thousands every month on eBay alone and included nicer coins and even large bronze. Uncleaned coins today are sold in small lots and are much poorer quality because that is all that is available.
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Offline quadrans

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Re: Price Increases Real or Illusion?
« Reply #20 on: January 06, 2022, 08:28:03 am »
Of course, I have to agree with those who would explain that there is less supply of good quality in the old money market than demand.
On the other hand, the higher demand is also due to the good value retention because antiques seem to many to keep their value better, and even their value seems to be rising.
Today, some people buy antiques not only as collectors, but simply as an investment.
This is also shown by the tendency that many people have beaten the price of modern money and coins made of rarer or more valuable metals, because here too, value retention is important, especially Gold, Silver and Platinum ...
So all the explanations that everyone mentioned earlier in this discussion all have an impact on the rise in prices, but there is also a serious role to play in keeping up with inflation ...

Joe
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Offline Ron C2

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Re: Price Increases Real or Illusion?
« Reply #21 on: January 06, 2022, 11:33:55 am »
I find it interesting that in many cases, most modern era gold coins sell at melt weight (plus or minus a small percentage), for all but the most rare and finest condition examples.  But for ancients, gold coins sell for usually many times the scrap value, for even average condition coins that are not rare (noting even "common" aurei, solidi, temissii, semissii, histamenon nomistae, etc. are generally uncommon coins compared to contemporary issues in other metals). 

So there is clearly an intrinsic collectable value being assigned to ancient precious metal coins beyond what we see for non-ancients, on average.  And I would also qualitatively say gold coin prices have gone up quite a lot over the last 20 years on a percentage basis - though I have not exactly studied the phenomenon statistically.

What I'm not sure of - is there an ancient coin value bubble forming?  Or is this intrinsic value boost from a coin being centuries old a phenomenon that is here to stay, making a large ancient coin collection investment a safe bet?  I don't collect to sell, so it's an academic question for me - but a valid one nonetheless.
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Offline Joe Sermarini

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Re: Price Increases Real or Illusion?
« Reply #22 on: January 06, 2022, 04:45:06 pm »
The only way any kind of bubble pop is possible in the current market, is if real estate and stocks both crash. Then the people with the money for gold will have less to play with. When you see an ancient coin investment fund advertised, then you will need to worry about a bubble. That happened in the 1980s.
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Offline Ron C2

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Re: Price Increases Real or Illusion?
« Reply #23 on: January 06, 2022, 05:18:23 pm »
Someone actually had an ancient coin fund running? I had not heard of that!
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Offline Steve Moulding

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Re: Price Increases Real or Illusion?
« Reply #24 on: January 06, 2022, 05:38:22 pm »
Are these the Athena funds, the doomed Numismatic Fine Arts / Merrill Lynch venture? I recall reading the story in "Fun while it lasted"...a recommended (and quick) read, by the way. Cheap copies on amazon/ebay.
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