The Coin Analyst: Modern World Coins Outperforming U.S. Issues This Year
by Louis Golino for CoinWeek
2012 has been a remarkable year for modern coin collectors in terms of the quality and range of products offered as well as the quick appreciation of sold-out, limited edition items.
The U.S. Mint has provided hardly any information about planned releases of many of its major collectible series like the America the Beautiful five-ounce coins, burnished American gold eagles, and the First Spouse gold coins.
Instead it is focusing mainly on old staples like the new presidential dollar coins, proof and mint sets, proof gold and silver American eagles, and the Infantry soldier and Star-Spangled Banner commemoratives. In addition, on April 23 the Mint announced that on June 7 it will release a special two-coin American silver eagle proof set to honor the 75th anniversary of the San Francisco mint. The set will have no household or mintage limits and will be made to demand.
While not all of those coins are winners in the secondary market, a remarkable number have been. Coins such as the Perth Mint ’s high relief dragons and opal koalas, the various coins commemorating the Titanic tragedy, or the incredible line-up of coins the Royal Canadian Mint has issued this year have seen very quick sell-outs and substantial price appreciation on the secondary market.
Another example of note is the oversized glow-in-the-dark dinosaur quarter that Canada issued recently. It received a lot of mainstream press attention, including mention on CNN’s evening news program, “Out Front,” which is hosted by former CNBC anchor Erin Burnett.
Not long after Ms. Burnett ran a segment on this year’s hot Canadian releases, the dinosaur coin sold out at the mint. It is now selling on e-Bay for $100 on average. The coin’s issue price was $30.
Of course, not all modern world coins are appreciating at a fast clip, or at all in some cases. Some turn out to be duds, for sure. But this year the performance of world issues is so far exceeding that of modern U.S. issues as far as short-term price appreciation. That may not be the only thing that matters for sure, but it does not hurt either.
Many modern U.S. coins, especially proof sets and commemoratives have a spotty track record, although, as Eric Jordan has explained in his book, Modern Commemorative Coins, modern key date coins have a solid track record. In many cases they are outperforming their counterparts in the classic coin series.
This is not terribly surprising, as modern coins are becoming more and more popular with collectors. The study of them can be mastered more easily than classic coins, it is easier to complete series of them, they can be obtained in the high grades collectors prefer, and so forth.
American collectors used to be more insular and often only dabbled in foreign issues. While U.S. coins continue to dominate the American coin market, world coins are clearly gaining in popularity and interest, especially modern world coins. But a mature market for them is only now beginning to emerge, and it is still a lot easier to trade in modern American issues.
And the impressive price performance of modern world issues this year such as the Canadian bumble bee on aster flower coin that went overnight from $140 to $220 and more, or the Canadian half dollar Titanic coin that sold out in a day and went from $35 to $130-200, are generating a lot of interest among collectors all over the world, including here in the U.S.
This comes on the heels of the 2012 Lunar dragon coin program, the world’s largest and most diverse coin program with a common theme, which continues to generate interest.
Some people feel that the Perth Mint in particular, which has issued a huge array of dragon coins in every conceivable size, finish, and color, may have overdone things with the dragons. Yet buyers continue to snap of Perth dragons and those of other mints. I would not be surprised if dragon fervor continues until this September’s roll-out of the next Lunar series coin for the snake.
To be sure, the usual pattern tends to hold with hot new world coins. First the coins sell out at the issuing mint and prices keep going up. Eventually they peak, and then interest typically wanes somewhat and prices cool off a little.
But after that the better issues sometimes resume going up again. Or they stagnate, or continue to decline, as many modern U.S. coins of the non-key date variety have done in recent years.
The trick, of course, is trying to predict which issues will continue to generate interest and demand, and which ones will turn out to be fads. That is the very essence of modern coin investing, and though some collectors pretend to be purists for whom value is not that important, it is also important to making good collecting choices.
Most people have limited budgets and they would like the coins they buy to appreciate in value over time. So they try to determine which issues have the right combination of low supply and high demand, which will keep prices higher over time.
Low mintages, it should be noted, need to be understood in context, especially since many modern world coins are issued in much smaller numbers than U.S. coins.
In part, that reflects the larger U.S. coin market, and the simple fact that a lot of world issues may be primarily of interest to collectors in the country where the coin was issued. If a small country issues a coin that lacks global appeal, it makes a lot of sense to issue a small number of them. And that does not necessarily mean the coin will appreciate in value.
In the not so distant past American collectors tended not to take foreign issues seriously, especially those that use color or alternative metals and other innovative techniques, and many still see them as “boutique” coins. But modern world coins are clearly getting more respect than they used to. The intricate engraving detail on issues from countries like Austria, for example, has caught the attention of medallic sculpture artists who serve on the Citizens Coinage Advisory Commission .
The market for these coins continues to expand, here and abroad, and numismatics is all the richer because of it.
Louis Golino is a coin collector and numismatic writer, whose articles on coins have appeared in Coin World, Numismatic News, and a number of different coin web sites. His column for CoinWeek, “The Coin Analyst,” covers U.S. and world coins and precious metals. He collects U.S. and European coins and is a member of the ANA, PCGS, NGC, and CAC. He has also worked for the U.S. Library of Congress and has been a syndicated columnist and news analyst on international affairs for a wide variety of newspapers and web sites.