I recently received an email from a collector who asked what I thought were an extremely intelligent group of questions. In a nutshell, he asked the following. As boomers age, are we nearing a bubble in coin prices? At some point will the number of collectors with the financial means to collect rare gold decrease and will prices suffer accordingly?
Go to any coin show and you will see a disturbing trend. The buyers of most “serious” coins (i.e., coins priced at $1,000 and above) are in their late 50s or 60s and the dealers selling them these coins tend to be at least the same age, if not older. There are not many young collectors at shows and the number of “A” level dealers in their 20s and 30s can be counted on one hand. This spells trouble for the coin market, right?
I contend that the answer is not as obvious or as clear-cut as it would seem to be. I am a keen student of the history of the numismatic marketplace and, as far as I can tell, ever since coin collecting became popular in the United States (in the late 1850’s/early 1860’s) it’s been a hobby that mainly attracts older people. Think about it: coins are expensive and people in their 20s and 30s have never had enough discretionary income to be making impulsive non-essential purchase. When you are 27 years old, you are thinking about buying a house and saving money for your child’s education, not deciding what series of 19th-century gold coin to specialize in.
But the world has changed in the last generation or two and wealth is no longer the exclusive province of the middle-aged and the mature. For the first time that I can remember I have a few good clients who are younger than I am and these collectors tend to be self-made entrepreneurs.
In the 1950s, many collectors grew old at around the same time and the hobby was in a precarious spot. Lots of great collections were coming on the market at the same time and it seemed unlikely that these coins would be absorbed. For a while, prices were depressed and the short-term outlook of the market was gloomy. But along came the roll craze of the early to mid-'60s and the market was suddenly reinvigorated by young collectors; some of who became famous dealers who are active to this day.
In the mid- to late-1970s the same trend was occurring. Collectors were graying and lots of coins were coming on the market. All of a sudden, precious metals prices began to boom and lots of new blood came into the market. Two decades later it was the State Quarter program that jumpstarted a moribund market. Again and again, we have seen cycles of demand in the coin market and when things appeared gloomy, something would happen that infused youth into the hobby.
The "X factor" in today’s market—and the future coin market(s)–is, of course, the Internet. Unlike in 1960 or 1980 or in 1990, it will be easier to replace this generation of graying numismatists with younger buyers due to the accessibility of information and the ease of purchasing rare coins on-line. And there is another factor that I believe will come into play as well: foreign buyers.
As is well-known, huge middle-class and upper-class populations are being created in China and India. These are countries with an interest in American culture and cultures that greatly prize gold. It is possible (not likely, but possible) that new markets for American gold coins could develop in these countries and this, of course, would greatly change the dynamic of the future coin market.
My guess is that some time in the next decade or so, we will see a significant change in the demographics of the coin market. Many of today’s “super-collectors” are going to be net sellers in a decade or so and it is certainly possible that prices at some point could drop in the short-term. But if this scenario occurs, I think it is highly possible that this dip will be short-lived and that a new generation of eager collectors will fill the void.
About Doug Winter
Doug has spent much of his life in the field of numismatics; beginning collecting coins at the age of seven, and by the time he was ten years old, buying and selling coins at conventions in the New York City area.
Recognized as one of the leading specialized numismatic firms, Doug is an award winning author of over a dozen numismatic books and the recognized expert on US Gold. His knowledge and exceptional eye for properly graded and original coins has made him one of the most respected figures in the numismatic community and a sought after dealer by collectors and investors looking for professional personalized service, a select inventory of impeccable quality and fair and honest pricing. Doug is also a major buyer of all US coins and is always looking to purchase collections both large and small. He can be reached at 214-675-9897.
Doug has been a contributor to the Guidebook of United States Coins (also known as the “Redbook”) since 1983, Walter Breen’s Encyclopedia of United States and Colonial Coins, Q. David Bowers’ Encyclopedia of United States Silver Dollars and Andrew Pollock’s United States Pattern and Related Issues
In addition he has authored 13 books on US Gold coins including:
- Gold Coins of the New Orleans Mint: 1839-1909
- Gold Coins of the Carson City Mint: 1870 – 1893
- Gold Coins of the Charlotte Mint: 1838-1861
- Gold Coins of the Dahlonega Mint 1838-1861
- The United States $3 Gold Pieces 1854-1889
- Carson City Gold Coinage 1870-1893: A Rarity and Condition Census Update
- An Insider’s Guide to Collecting Type One Double Eagles
- The Connoisseur’s Guide to United States Gold Coins
- A Collector’s Guide To Indian Head Quarter Eagles
- The Acadiana Collection of New Orleans Coinage
- Type Three Double Eagles, 1877-1907: A Numismatic History and Analysis
- Gold Coins of the Dahlonega Mint, 1838-1861: A Numismatic History and Analysis
- Type Two Double Eagles, 1866-1876: A Numismatic History and Analysis
Finally, Doug is a member of virtually every major numismatic organization, professional trade group and major coin association in the US.
If you are interested in buying or selling classic US coins or if you would like to have the world’s leading expert work with you assembling a set of coins? Contact Doug Winter at (214) 675-9897 or by email at email@example.com.