A World of Value

In recent months, the energy and excitement of the U.S. coin market has spilled over into the world coin market, culminating with the recent sale of the Louis Eliasberg, Sr. collection of world gold coins in a joint sale by American Numismatic Rarities and Spink’s. While the Eliasberg collection was an unusually nice grouping of rare, high grade coins, the results were stunning and reflect renewed interest in world coins. The four-day sale of more than 2,500 coins realized over $10 million dollars, or more than twice the pre-sale estimate. Bidders included advanced collectors, many familiar dealer faces from the world coin market, and (more importantly) a strong contingent of U.S. coin dealers.

Why the renewed interest in world coins?

The answer is two-fold: 1) the world coin market is experiencing a flight to quality and 2) U.S. dealers are searching for values outside U.S. coins.

The flight to quality is a normal carryover from the U.S. market, where the advice has always been to buy the best possible quality. Fortunately for collectors, the best world coins can often be purchased for a small premium over the price of average Uncirculated or Proof coins.

Values in the U.S. market are becoming harder and harder to find, thanks to the sky-rocketing prices of recent years. Dealers are attracted to the world coin market, where values have remained steady over the years and where superb quality coins can be had for a fraction of the price of their counterparts in the U.S. market.

A similar situation occurred in 1989, when the U.S. market peaked. Then, U.S. dealers began investing some of their profits in World coins, which were just beginning to be graded by third-party certification services such as PCGS. Initially, the population of high-grade coins was very low, due not to intrinsic rarity, but to a lack of certified coins in a variety of categories. The tremendous demand for the few, high-grade world coins that had been certified, translated to big price increases in the highest grades. Unfortunately, there was little collector base to sustain the price increases once the U.S. market began its decline, and prices for world coins settled back down to normal, closer-to-catalog values.

Today, the situation is quite different because of three major changes. First, there are fifteen years worth of certified world coins on the market and collectors have a better idea of what is rare (and what is not) in high grade. Thus, collectors pay more for the best coins knowing that their purchase price is relatively safe. Second, we have the Internet, which has created a whole new breed of collectors, has made coins easy to sell and obtain, and which has scattered the existing supply of coins over an extremely broad base. Third, economic factors are different. Today, the stock market remains relatively lackluster and many people have moved their money out of the stock market and into alternative investments, such as coins. In addition, skyrocketing real estate prices and low interest rates created opportunities for collectors to cash out some of their equity and move it into the coin market. While the wisdom of these actions can be debated, the reality is that the huge influx of money into the market means that more collectors are competing for fewer coins, resulting in a clear demonstration of how decreased supply and increased demand translate to higher prices.

Despite recent price increases, the world coin market remains full of excellent values, especially relative to the U.S. coin market. Thus, if you’re a collector who likes rarity, interesting themes, a wide slice of history, and varied designs, give world coins a chance. You’ll like what you see and you’ll love the values you’ll find.